Choosing the Right Freelance Tax and Financial Advisors for Your Business

By Bethany Johnson, Contributor, on March 19, 2018

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When I hired my accountant, I thought he’d do everything for me. I assumed he’d track my expenses, categorize my transactions, reconcile all my accounts, file my quarterly freelance tax, prepare my personal tax returns and tell me where to invest. I also wanted him to give me the occasional motivating “save more money” speech.

Boy, was I in for a surprise.

Turns out there are many different financial advisors, all with separate strengths and offerings. As a freelancer, it’s important to build the right team of financial experts, and know who to approach for each question that pops up. Here’s an overview of five different financial experts available, and how to know which one to engage.

Certified Enrolled Agent

For personal tax preparation, you may have hired a certified enrolled agent (EA) in the past. The certified EA is a legitimate tax prep pro who’s proven their knowledge by passing an IRS-administered exam. But when it comes to filing business taxes or administering bookkeeping, you’re better off working with a more accredited professional.

Certified Public Accountant

A certified public accountant (CPA) is an accountant who has passed the Uniform CPA Examination. To qualify for the exam, your accountant must complete 150 semester hours of formal education and meet other jurisdiction-specific requirements. In other words, a CPA is a super-accountant. For freelance tax preparation and advice, there’s no one better to consult.

Certified Financial Planner

As you know, the line between business finances and personal finances can blur when you set up shop as a freelancer. The certified financial planner (CFP) knows this, and can help you reach your savings goals by establishing smart, habitual and strategic efficiencies. To become a CFP, this advisor must undergo extensive education, testing and at least three years of real-world professional experience. This is the perfect person to engage for questions related to insurance policies, estate planning, wealth-building and even budgeting.

Chartered Financial Analyst

Called the most “respected and recognized investment management designation in the world,” a chartered financial analyst (CFA) is a professional money manager who’s probably more interested in hedge funds than a solopreneur’s taxes, debt plan or nest egg. If you’re a freelancer in the financial services industry, instead of engaging a CFA, consider becoming one.

Financial Coach

New on the scene in the last few decades is the financial coach. This is a mindset mentor who can help you get rid of thought patterns and habits that could be sabotaging your financial efforts. They can also help you critically question your own financial assumptions, like determining how to correctly price your services.

How to Choose the Best Advisor for You

Choosing the right advisor depends on your goals. Do you want to learn which funds are the best investment vehicles for you right now? Consider hiring a CFP. Need help determining which expenses are tax-deductible as a freelancer? Talk to a CPA. Ask how your advisor gets paid, how well they understand the freelance business model and whether they’re a fiduciary — meaning they’re obligated to act in your “best financial interests.” Unfortunately, there’s no financial professional that does all the thinking for you, so consider it a partnership. When you’re ready, choose a financial goal and engage the right expert to help you achieve it.

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