What’s the Difference Between a CPA and a Tax Planner?
CPAs do the important number crunching for tax preparation and filing, but tax planners look at the big picture and come up with tax-saving strategies.
I was doing a workshop on tax planning in our community in Columbus, Ohio, when a self-assured CPA walked into the room. His confidence was overwhelming as he declared that not only did he already know everything I planned to discuss that evening, but he should be the one delivering the presentation.
I have a bit of a sense of humor, so I had to have some fun with him. During the workshop, I posed challenging questions about tax planning strategies we use with our clients, strategies that often remain unknown or misunderstood by many. I quizzed him on the ins and outs of Roth conversions, the tax implications of claiming Social Security at 62 vs 70 and the concept of a backdoor Roth IRA. As I expected, he did not have the answers.
Tax preparer vs tax planner
This man was a tax preparer, not a tax planner. There’s a difference between the two. Tax preparation is primarily about data entry and number crunching from January to April. On the other hand, tax planning is a year-round activity that involves proactive strategies to save as much money on taxes as possible. We specialize in the tax planning part.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
We were able to humble that tax preparer, and fortunately, he is now a client. We have been able to save him hundreds of thousands of dollars in taxes from the planning strategies that we helped him implement.
Now, I’m not here to talk bad about CPAs. CPAs are great. I recommend everyone work with a CPA to ensure that their tax filing gets done correctly. However, tax planning is not usually a service CPAs provide in depth. It’s a complex process requiring a significant time investment and an intimate understanding of a client’s situation and goals, which most CPAs don’t have the bandwidth to handle.
Tax planners take a deep dive into your taxes
For many of the clients we work with, it can take upwards of 20-plus hours to build a comprehensive tax plan. This involves a deep dive into their tax return from last year to see what we missed and what opportunities they have. Oftentimes, these strategies consist of Roth conversions, tax loss harvesting, tax-efficient income planning for income, Social Security claiming strategies with the impact of taxes and planning to make sure beneficiaries receive as much money as possible with the least tax burden.
All of these are items that most CPAs do not do and that involve a more sophisticated tax plan. They would also need to understand your situation and your goals fully. Most CPAs do not have detailed conversations with you to understand everything outside of the numbers.
To sum up, many retirees miss out on tax planning opportunities simply because they are unaware such possibilities exist. Because of this, I’ve made it my mission to guide as many retirees as possible toward integrating tax planning into their retirement planning strategies, which can significantly reduce one of the biggest expenses in retirement. I even wrote a book, titled I Hate Taxes that shares insights into minimizing tax liabilities through effective planning.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Related Content
- Is Your Financial Adviser Doing a Good Job for You?
- Five Estate Planning Things You Need to Do Now
- Estate Planning: Who Needs a Trust and Who Doesn’t?
- Do You Have at Least $1 Million in Tax-Deferred Investments?
- Do You Have the Five Pillars of Retirement Planning in Place?
-
Ask the Editor: How to Get Ready for Tax Filing SeasonAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on the IRS tax filing season and your 2025 tax return
-
4 Simple 2026 Money Targets to Aim For (And How to Hit Them)While January is the perfect time to strengthen your financial well-being, you're more likely to succeed if you set realistic goals and work with a partner.
-
Everyone Needs an Estate Plan (Seriously, Even You)If you've acquired assets over time, even just a home and some savings, you have an estate. That means you need a plan for that estate for your beneficiaries.
-
4 Simple Money Targets to Aim for in 2026 (And How to Hit Them), From a Financial Planner
While January is the perfect time to strengthen your financial well-being, you're more likely to succeed if you set realistic goals and work with a partner.
-
I'm a Wealth Adviser: Everyone Needs an Estate Plan (Seriously, Even You)
If you've acquired assets over time, even just a home and some savings, you have an estate. That means you need a plan for that estate for your beneficiaries.
-
How to Be a Smart Insurance Shopper: The Price Might Be Right, But the Coverage Might Not BeChoosing the cheapest policy could cost you when you have a loss. You'll get the best results if you focus on the right coverage with the help of a good agent.
-
7 Reasons Why Your Portfolio Needs Short-Term Bond ETFsMoney market funds are a safe option for your cash, but ultra-short and short-term bond ETFs also deserve consideration. Here are seven reasons why.
-
I'm a Wealth Planner: Forget 2026 Market Forecasts and Focus on These 3 Goals for Financial SuccessWe know the economy is unpredictable and markets will do what they do, no matter who predicts what. Here's how to focus on what you can control.
-
I'm a Financial Adviser: Why In-Person Financial Guidance Remains the Gold StandardFace-to-face conversations between advisers and clients provide the human touch that encourages accountability and a real connection.
-
This Is How You Can Turn Your Home Equity Into a Retirement BufferIf you're one of the many homeowners who has the bulk of your net worth tied up in your home equity, you might consider using that equity as a planning tool.
-
Feeling Too Guilty to Spend in Retirement? You Really Need to Get Over ThatAre you living below your means in retirement because you fear not having enough to leave to your kids? Here's how to get over that.
