There’s a Difference in Tax Preparation and Tax Planning

Tax Preparation And Tax Planning Are Two Different Services

Are you wondering why your CPA isn’t performing tax planning for you? Or why they are not making suggestions on how you could save money?

My answer: You’re not asking them for tax planning

Tax Planning is a service separate from tax preparation. Tax preparation is where your CPA receives your accounting file and makes tax adjustments. These usually include items such as depreciation, mortgage interest, standard mileage rates, and other important adjustments. They then use this information to prepare your tax return.

They are simply preparing your taxes based on the information they have. That’s either information you gave them, or information they compiled.

Tax Planning is very different.

Tax Planning Begins With A Conversation With Our Client.

We determine your business goals, financial goals, and retirement goals. Those are important in tax planning because it can tell me where we will start. The tax saving strategies we use will be based on your goals.

The tax strategies implemented would be different based on each of these:

  • You have a family with small children

  • You want to grow your firm

  • You want to retire in the next 10 years

  • You want to sell your firm in the next 3 to 5 years

Once we have the conversation and understand your goals, we dive into the data. We data mine through your accounting and past tax returns, and use this to prepare an internal diagnostic report.

We use all of this information to make suggestions. When we have completed the tax planning, we provide you with a Tax Strategies Analysis report. This report will give you details of the tax strategies you could implement, as well as how much you would see in tax savings. You can then pick and choose which tax strategies you want to implement.

Depending on the tax strategy you decide to implement, you can either implement it on your own, or we can help you implement it.

For example, if we recommend changing your entity setup, you may need us to implement it. Whereas if the strategy is increasing your IRA contribution, you can do that on your own.

Planning For The Future

There is no “one-size fits all” in tax planning. This is why it’s important to understand your firm’s vision and where you want to take it. We help you align your finances (that includes taxes) with your firm goals.

I hope this helps you see the difference in services. Tax preparation is compliance work and tax planning is money saving work. Do not expect your CPA to automatically do tax planning services for you. This is a service that is very valuable and you should expect to pay for it.

Aligned CPA helps solo and small law firms, as well as other service professionals. We’d love to talk with you and see if we would be a good fit for your firm.  Contact us for a consultation today.


I help solo and small law firms, and other service professionals, by providing accounting, tax preparation and proactive tax planning services.

I promise you, working with a CPA can be much more exciting than crunching numbers and reviewing last year’s taxes. I look at the day-to-day of your business and help you find ways to perform better, grow bigger and generate revenue with greater ease.