A Certified Public Accountant (CPA) who prepares tax returns and a CPA who focuses on tax planning have distinct roles and responsibilities. While both are knowledgeable in tax matters, their primary areas of expertise and the services they provide differs.

CPA That Prepares Tax Returns

A CPA who prepares tax returns is primarily focused on accurately completing and filing tax forms. This is on behalf of individuals or businesses. Their responsibilities typically include: 

– Gathering relevant financial information. They collect all necessary financial documents, such as income statements, expense records, and investment statements, from clients to ensure accurate reporting. 

– Tax form completion. Based on the gathered information, they fill out the appropriate tax forms, ensuring compliance with relevant tax laws and regulations. 

– Maximizing deductions and credits. They aim to identify potential deductions and credits that clients may be eligible for, helping to minimize their tax liability and maximize their potential refund. 

– Calculation of tax liability. By applying relevant tax laws and regulations, they calculate the amount of tax owed or the refund due to the client. 

– Filing tax returns. They submit the completed tax returns to the appropriate tax authorities on behalf of their clients. 


In summary, CPAs who primarily prepare tax returns focus on ensuring accurate reporting and compliance with tax laws while identifying potential deductions and credits. 

A CPA that does Tax Planning

A CPA who specializes in tax planning takes a proactive approach to help individuals or businesses optimize their tax strategies and minimize their tax burden. Their role involves: 

-Tax strategy development. They work closely with clients to understand their financial goals and objectives, and then develop tailored tax strategies to help achieve those goals. These strategies may involve income deferral, expense management, investment planning, or entity structuring.

-Proactive tax advice. They provide ongoing advice to clients throughout the year, not just during tax season. This can include recommendations on tax-efficient investments, retirement planning, charitable contributions, and other strategies aimed at reducing tax liability.

-Tax law expertise. They stay up to date with current tax laws and regulations and use their expertise to identify opportunities and potential risks for clients. They assess the potential impact of tax law changes on clients’ financial situations and provide guidance accordingly.

-Tax projections. They analyze clients’ financial information and project their tax liability for the current and future periods. This allows clients to plan their finances and make informed decisions to minimize their tax burden.

-Entity selection and structure. They assist clients in selecting the most advantageous legal entity structure for their business. This includes considering factors such as tax implications, liability protection, and operational needs. 


What Does this mean?

In essence, CPAs specializing in tax planning go beyond simply completing tax forms and focus on developing proactive strategies to help clients minimize their tax liability and achieve their financial objectives. 


There is an in-between service known in the industry as “tax projections”. A tax projection is a service in which the CPA, or CPA firm, calculates the projected tax for a specific year, typically the current year. They layer in a couple of simple strategies that can be executed a couple of months prior to year end. By no means is this an in-depth service like pro active tax planning.


It’s worth noting that while there is a distinction between these two roles, many CPAs provide a combination of tax preparation and tax planning services to their clients, depending on their specific needs. Whittaker was built on proactive tax planning. Our roots prior to starting this firm in 1999 was providing this service at a national level to Fortune 500 companies while Dan Whittaker was at the international accounting firm KPMG. We have sought to provide this same service to family and closely held businesses. We are continually researching and training on the newest and most relevant strategies. Click the link below to get in contact with us. Or feel free to give us a call for more information.