Published on: 11/17/2023
Do Financial Advisors Help With Taxes?
If you and your loved ones are beginning to think about preparing for the future and growing your legacy, you’re probably looking to seek the guidance of financial professionals including advisors and accountants. You’d also likely prefer to optimize your team of financial professionals instead of having to keep up with several different ones, each specializing in their own area of expertise.
So, do financial advisors help with taxes? Or will you need to hire financial advisors as well as tax advisors and accountants?
In this article, the fiduciary financial advisors from Avidian Wealth Solutions will explore the role of financial advisors in tax planning, the differences between tax advisors, accountants, and financial advisors, and note the ways in which you could potentially benefit from a financial advisor’s tax planning expertise.
Do financial advisors help with taxes in Texas?
Do financial managers deal with taxes? In general, financial advisors are professionals who offer advice and guidance on a number of financial matters, such as investments, retirement planning, estate planning, and tax strategies.
While not all financial advisors are tax experts, they often have a strong understanding of the tax implications of financial decisions and can therefore provide valuable advice on the tax implications of your investment portfolio, retirement accounts, estate plans, succession plans, etc., as well as some advice on reducing your tax liability come the end of the year or working to minimize inheritance tax in Texas for your loved ones.
Really, you should be working with a team of financial advisors. Ideally, one that has one or more tax planning advisors available to make sure that your financial well-being is considered from every possible angle, and is given the benefit of many different kinds of expert opinions.
The differences between a tax advisor vs financial advisor vs an accountant
Because tax and wealth management often go hand-in-hand, how can you be sure of which professional you need? What is the difference between a financial advisor and a tax advisor or an accountant?
A few key differences between financial advisors, tax advisors, and accountants are as follows:
- Are tax-focused: They specialize in taxes. This may seem obvious, but their in-depth knowledge of tax laws, regulations, and tax planning strategies is what sets them apart from a traditional financial advisor. Their primary role is to help clients navigate the complexities of tax compliance, prepare tax returns, and minimize tax liabilities.
- Aid with tax preparation: Tax advisors are experts in preparing and filing tax returns accurately and in a timely manner. They can help individuals and businesses take advantage of all available deductions, credits, and exemptions.
- Offer tax planning and problem resolution: In addition to tax planning and preparation, tax advisors can assist clients in resolving tax-related issues, such as IRS audits, tax debt, and disputes with tax authorities.
- Offer comprehensive financial planning: Financial advisors take a more broad approach to financial management. Instead of focusing on only your taxes, financial advisors will take a big-picture look at your financial well-being — which almost always includes your taxes.
- Manage your investments with tax implications in mind: Financial advisors can help clients build and manage investment portfolios tailored to their financial goals and risk tolerance. While your taxes are always something that is on your financial advisor’s mind, they focus on optimizing investment returns while managing risk or advising on strategies that minimize your taxes like using a trust to mitigate the gift tax in Texas.
- Offer retirement planning and estate planning services: That holistic approach to financial well-being should include retirement and estate planning, and while both of these things have serious tax implications, a tax advisor wouldn’t be able to help you plan your estate or retirement, while a financial advisor would.
- Provide tax, accounting, and bookkeeping services: Accountants may provide a wide range of services, including tax preparation and planning. However, they also specialize in financial record keeping and reporting.
- Help with audits and financial statements: When it comes to taxes, accountants can help individuals or businesses prepare for audits by maintaining accurate records and providing necessary documentation. They can also assist with financial statements, which may be required for loan applications or other purposes.
- Assist with overall financial management: While not all accountants offer this service, some may offer basic financial advice and help clients manage their finances outside of tax-related matters.
So, while tax advisors and accountants specialize in tax-related matters and are focused on tax compliance and planning, financial advisors offer a more comprehensive approach to financial planning and management. Financial advisors can provide valuable insights into tax planning, but they are not tax experts in the same way that tax advisors or accountants are.
Do I need an accountant or financial advisor?
The truth is that you would likely benefit from both a financial advisor’s tax planning advice and a tax planner to execute the specifics. It may suffice to call an accountant or a tax advisor if your financial situation isn’t especially complex or you are just facing some tax issues, but you might need a financial advisor if any of the following are true:
- You have a lot of investable net worth or a large portfolio of assets.
- You could benefit from comprehensive financial planning, including investment management, retirement planning, estate planning, and tax planning.
- You want to create a long-term financial plan to achieve your specific financial goals.
- You need guidance on managing your investments to build wealth over time.
- You want a holistic approach to managing your finances and optimizing your financial well-being.
At Avidian, your financial advisors work with a team of accountants, tax planners, retirement planners, risk managers, and more, to give your financial life the kind of care and attention that is only possible in a family office environment.
How you can benefit from a financial advisor’s tax planning
Financial advisors can offer valuable tax planning strategies and guidance that can have a significant impact on your overall financial health. Here’s how you can benefit from a financial advisor’s tax planning expertise:
- Optimized investment strategies. A financial advisor can help you structure your investment portfolio that works to minimize your tax impact by recommending tax-efficient investment options that work to minimize federal capital gains tax in Texas.
- Diversification and balance. A financial advisor can help you diversify your portfolio and your tax strategies.
- Planning for your estate and your retirement. Financial planners don’t just manage investments, they make those investments work toward your future. If you don’t have a retirement or estate plan in place, you likely need to speak with a financial advisor.
- Holistic financial planning. Financial advisors take a comprehensive approach to financial planning by considering all aspects of your financial life. They can work with you to make sure that your entire financial plan is made with your tax implications in mind, not just make sure you’re in compliance at the end of the year.
- Ongoing monitoring and adjustment. A financial advisor can continuously monitor your financial situation and adjust your tax strategies as needed to help you stay on track with your financial goals. This is especially valuable because tax laws and financial circumstances are almost certain to change over time.
While financial advisors are not all tax experts, they play a crucial role in getting your financial life tax-ready. Plus, the financial advisors at Avidian Wealth Solutions work side-by-side with our tax planning professionals, to ensure that every decision made about your financial life is made to put you one step closer to achieving your goals.
Continue reading: Are Texas 529 Plan contributions tax deductible?
Do financial advisors help with taxes? At Avidian Wealth Solutions, they do.
Financial advisors can indeed help with taxes, providing valuable insights and strategies to optimize your financial plan while minimizing your tax liability. While there are important distinctions to be made between tax planners and financial advisors, the important thing to do is work with a team at a wealth management firm that can offer both.
At Avidian Wealth Solutions our financial advisors, tax planners, estate planners, risk managers, and other specialized financial professionals all collaborate on your financial planning needs, to help create a plan truly made with your goals, and nobody else’s, in mind. We also have the ability to work with your existing team of accountants to work towards cohesion across your wealth plan.
Whether you need tax planning in Austin, Houston, Sugar Land, or The Woodlands, or just have questions about what our financial advisors can do to help you work towards optimizing your wealth, schedule a conversation with us today to get started.
**Please note that while Avidian can not file your tax returns, we are able to advise on tax strategies throughout multiple areas of your financial plan.
More Helpful Articles by Avidian Wealth Solutions:
- What is the Repatriation Tax in the US?
- Will AI Replace Financial Advisors?
- What is an Exit Plan (and Why Does it Matter?)
- What to Know About the Great Wealth Transfer
- How Is Passive Income Taxed?
Please read important disclosures here
Get Avidian's free market report in your inbox
Schedule a conversation
Curious about where you stand today? Schedule a meeting with our team and put your portfolio to the test.*