How to Provide Tax Advisory Services to Your Tax Clients Year-Round

If you’re looking for ways to expand your services and increase revenue, tax advisory is a profitable, common sense option–one that you may already be performing in some ways for your tax preparation clients. While the road to running a full-service advisory practice is a long one, there are steps you can take immediately to get started. Here are some of the basics to consider as you start out.

Identify which clients could use tax advisory services

Clients who know they will benefit from tax savings are more likely to appreciate the value of your advisory services. Small businesses owners, sole proprietors, high-income taxpayers, and taxpayers who itemize deductions are all potential clients could all benefit from expert advice to minimize their tax liability.

Separate tax advisory from tax prep

There’s a good chance your tax business is already performing some advisory services as you prepare taxes. But all too often, clients aren’t even aware that they are receiving these services–or they don’t realize how much they’re saving as a result. Consider what you do for your current clients and which services could fall under the “advisory” umbrella. Here are some examples of advisory services you may already be providing without charging an extra fee:

  • tailoring a client’s return to minimize tax liability
  • helping a client strategize for next year
  • advising your client to make business decisions that would help them qualify for certain deductions, credits, and exemptions

In many cases, your clients may not even know that you’ve gone the extra mile or saved them money. But when you document the savings on paper and compare it to the lower cost of your new advisory package fees, clients are more likely to understand the value of tax advisory services. 

Start with advisory services relevant to your existing client base

There are many niche areas of tax advisory. If you try to start offering advisory services to all of them, you’ll likely find yourself overwhelmed. Instead, start your venture into advisory by focusing on just one or two niches that are most relevant to your existing client base. Some common areas of focus include tax advisory for retirement, estates and trusts, real estate investors, and high income families with multiple complex tax factors like itemized deductions.

Tax advisory for small businesses

Small business owners are some of the clients most likely to pay for tax advisory. They know the tax situation is complex, and see advisory fees as a necessary business expense that could save them money in the long run. In addition to simple tax compliance and tax estimates, you can help your business clients with the following:

  • Depreciation strategies for different assets
  • Employee benefits and retirement
  • Income shifting/ splitting (a tax strategy that moves income from higher tax bracket taxpayers to lower tax bracket taxpayers)
  • Business financing options
  • Relevant business credits such as the R&D credit
  • Choosing the most beneficial business structure

Of course, this list is far from exhaustive, and you can expect to invest significant time as you learn the finer points of advisory strategies.

Start small and learn from successful advisory firms

Taking your business from a tax preparation to tax advisory doesn’t happen overnight. You’re venturing into an entire new skill set, and you’ll need time to learn more advanced tax strategies, how to communicate value to clients, and price and bundle your services. Be okay with the idea of starting out with just one or two advisory clients using and using relatively simple advisory strategies. Eventually, these strategies may become a part of your “lower tier” of advisory packages. As you gain experience and expertise, you can begin to offer more advanced packages as well.

And remember that you don’t need to start this venture without help. The AICPA advises firms who are interstate in expanding into advisory to invest in focused advisory programs to help them get started. The AICPA’s self study Client Accounting Advisory Services Certificate and Client Advisory Roadmap Workshop are excellent places to start.

If you need more immediate ways to build your business and diversify your income in the meantime, you might consider becoming a service bureau reseller. In addition, read our article: 5 Things to Add to Your Marketing Plan.

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