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Who to Hire and Where: Tax Accountants vs. Financial Planners

  • Writer: DM Monticello
    DM Monticello
  • Jun 20
  • 9 min read

Navigating your finances means making smart decisions about the professionals you work with. But do you know who to call when you need help with taxes, versus when you need a long-term investment strategy? This guide will help you understand the difference between a tax accountant and a financial planner, and more importantly, where to hire the right one for your needs.



Understanding the Difference Between a Tax Accountant and a Financial Planner


What Does a Tax Accountant Do?

A tax accountant is a licensed professional who specializes in preparing and filing tax returns, offering guidance on tax deductions, handling IRS correspondence, and ensuring compliance with local and federal regulations. If you’re facing a complex tax situation—such as self-employment income, multiple income streams, rental properties, or back taxes—you’ll want to hire a Certified Public Accountant (CPA) or an Enrolled Agent (EA).

Typical tasks include:

  • Filing individual and business tax returns

  • Reviewing tax documents and optimizing deductions

  • Assisting with audits or IRS notices

  • Setting up quarterly estimated payments for freelancers or business owners


What Does a Financial Planner Do?

A financial planner, on the other hand, helps you create and follow a strategy for your overall financial future. They look at your income, expenses, assets, and long-term goals like retirement, college savings, or home buying. While many financial planners provide tax-efficient advice, their main job isn’t preparing your return—it’s ensuring your financial life moves in the right direction.

Core services include:

  • Investment strategy and portfolio balancing

  • Retirement planning (e.g., IRA, 401(k), SEP)

  • Insurance and estate planning

  • Budgeting and cash flow analysis

When Do You Need Each?

Financial Situation

Hire a Tax Accountant

Hire a Financial Planner

Filing taxes, especially complex ones

✅

✖️

Long-term retirement strategy

✖️

✅

Self-employed or own a small business

✅

✅

Managing debt and setting financial goals

✖️

✅

Maximizing tax deductions or handling audits

✅

✖️

Planning for inheritance or large windfall

✅ (for tax planning)

✅ (for allocation strategy)



Choosing the Right Professional for Your Financial Situation


Personal Finance Use Cases

If you're a salaried employee with one W-2 and few deductions, a financial planner might offer more long-term value. But if you just sold stock or received a large bonus, a tax accountant can ensure you avoid unnecessary tax liabilities.


Business and Self-Employed Scenarios

Business owners benefit from both professionals. A CPA helps file taxes and keep your books clean, while a financial planner can assist in structuring retirement accounts (like Solo 401(k)s) and defining exit strategies.


Investment and Retirement Planning

This is the domain of financial planners. They help you allocate assets in tax-advantaged accounts, evaluate risk tolerance, and monitor investments. Some even collaborate with your CPA to optimize tax treatment of investment gains or losses.



Where to Hire a Tax Accountant


Online Marketplaces and Directories

If you’re searching independently, try reputable directories:

  • IRS Directory of Federal Tax Return Preparers

  • National Association of Enrolled Agents (NAEA)

  • AICPA Find a CPA

These platforms let you filter by credentials, experience, location, and language.


Local CPA Firms

Local CPA firms offer hands-on support and familiarity with regional tax laws. You’ll want to look for firms with:

  • At least one licensed CPA

  • Experience in your specific income or business category

  • Transparent pricing for individual vs. business tax services

If you run a business or side hustle, a local firm can often bundle tax prep, bookkeeping, and compliance into one engagement.


Virtual and Offshore Options

Hiring virtually allows you to access high-quality CPAs across the U.S. or even offshore (e.g., the Philippines or India) for more cost-effective tax work. Ensure that:

  • Your virtual CPA understands U.S. tax law

  • You’re using secure document-sharing systems (e.g., SmartVault, LastPass)

  • Communication is clear and response times are reasonable

Many U.S.-based CPAs now operate fully remote and offer digital tax return services without requiring in-person visits.



Where to Hire a Financial Planner


Fee-Only vs. Commission-Based Planners

Fee-only planners charge a flat rate or a percentage of assets under management (AUM), ensuring that advice is not tied to selling you investment products.

Commission-based planners, by contrast, may earn money from selling insurance or mutual funds, which can lead to conflicts of interest.

To find a planner who’s truly on your side, look for designations such as:

  • CFP® (Certified Financial Planner)

  • CFA® (Chartered Financial Analyst)

  • RIA (Registered Investment Advisor)

You can search directories like:


National Planning Networks

National firms such as Fidelity, Charles Schwab, and Vanguard offer in-house financial planning services, often with lower fees or bundled options if you hold investment accounts with them.

These firms typically:

  • Offer certified planners

  • Provide online dashboards for visibility

  • Automate tax-loss harvesting and rebalancing


Robo-Advisors vs. Human Planners

For those just starting out, a robo-advisor like Betterment or Wealthfront might be enough. These platforms:

  • Build portfolios based on your goals

  • Offer basic tax optimization

  • Cost 0.25–0.50% AUM, lower than a human planner

However, if your life is financially complex (multiple incomes, business interests, real estate, estate plans), working with a real person is worth the investment.


Questions to Ask Before Hiring

The right questions will help you choose a qualified and trustworthy professional.

Credentials to Look For

Professional

Must-Have Credentials

Tax Accountant

CPA (Certified Public Accountant) or EA (Enrolled Agent)

Financial Planner

CFP® (Certified Financial Planner), CFA®, or RIA designation

Sample Questions:

  • “Are you licensed in my state or nationally certified?”

  • “Can you provide references from clients in similar situations?”

  • “How do you stay updated on tax/financial planning regulations?”

Fee Structures and Billing

Understand how you're being charged:

Tax Accountants:

  • Hourly: $100–$400/hour

  • Fixed: Flat rates for returns (e.g., $250 for 1040EZ, $800+ for business returns)

Financial Planners:

  • Flat fee: $1,000–$5,000 for a one-time plan

  • AUM (Assets Under Management): 0.5%–1.25% annually

  • Subscription or hourly: $150–$400/hour

Ask:

  • “What’s included in your service fee?”

  • “Are there extra charges for revisions, meetings, or document prep?”

Technology and Communication Tools

Professionals should use secure and efficient systems. Ask:

  • “Do you use encrypted portals for document uploads?”

  • “What’s your average response time for client inquiries?”

  • “Can we meet virtually or in person?”



How to Avoid Common Mistakes

Don’t Confuse Roles

Some people hire a financial planner expecting them to file taxes, or rely on a CPA for long-term investment advice. While both can offer basic guidance, each professional excels in a specific area. Misalignment leads to poor outcomes.

Watch Out for Hidden Fees

Always request a written agreement. Vague language around "performance bonuses," "platform access fees," or "additional tax form charges" can add up. Transparency should be non-negotiable.

Ask for Referrals and Check Reviews

Just like you wouldn't hire a contractor without references, don’t hire a CPA or financial planner blindly. Ask for:

  • Case studies or anonymized examples

  • Online reviews or client testimonials

  • Their approach to client retention and renewal

Check:

  • Google reviews

  • BBB ratings

  • LinkedIn profiles for professionalism and endorsements



When You Might Need Both

In many real-life situations, both professionals working together give you the best results.

Coordinated Tax and Investment Strategy

If you're managing:

  • Stock options (ISOs, RSUs)

  • Real estate investments

  • Business sales or mergers

…you need a CPA to structure the transactions and a financial planner to reinvest and plan long-term.

Example: Selling your business? Your CPA helps minimize capital gains tax, while your planner maps out retirement income from the proceeds.

Estate and Legacy Planning

Passing on wealth involves both legal and financial work. A CPA ensures compliance with gift and estate tax rules. A planner helps you define how to pass wealth to heirs or charities meaningfully.

Tip: Seek professionals who collaborate, or hire through a multi-disciplinary firm.



Real-Life Examples — Who to Hire and Why It Matters

Understanding theory is one thing. But seeing how everyday people and businesses choose between a tax accountant and a financial planner can make all the difference. Here are real-world examples across a range of situations.



Scenario 1: A Small Business Owner with Growth on the Horizon

Name: Carla, owns a boutique digital marketing agency in Texas Problem: Carla used TurboTax for years, but as her team grew, she wasn’t sure if she was deducting expenses correctly or paying herself efficiently.

Who She Hired: A tax accountant (CPA)

Why:

  • Set up proper S-Corp structure to lower self-employment tax

  • Implemented payroll for her and her partner

  • Handled quarterly estimated taxes and business returns

  • Recommended accounting software integrations

Result: Carla saved $14,000 in taxes the first year and felt confident filing on time. Her CPA also recommended working with a financial planner next to plan for long-term retirement through a Solo 401(k).



Scenario 2: A Mid-Career Employee Looking to Retire Early

Name: David, 42, software engineer at a tech firm in Boston Problem: High income, no financial strategy, unsure how much to invest or when he could retire early (FIRE goals).

Who He Hired: A fee-only financial planner (CFP)

Why:

  • Designed a roadmap for early retirement (FIRE)

  • Analyzed risk tolerance and adjusted his 401(k)/IRA allocations

  • Set up a diversified portfolio with ETFs and tax-efficient index funds

  • Coordinated with a CPA during bonus season to reduce tax hit

Result: David is on track to retire at 52, and he checks in with his planner quarterly. He now sees tax season as part of a larger financial plan—not a separate headache.



Scenario 3: Dual-Income Family Navigating Real Estate and College Savings

Name: Mike and Sarah, married couple with two kids Problem: Own a rental property, freelance income, and want to plan for college + retirement

Who They Hired: Both a CPA and a Financial Planner

Why:

  • The CPA helped with complex taxes: 1099 income, depreciation schedules, and child tax credits

  • The Financial Planner mapped out college savings (529 plans), Roth IRA contributions, and future downsizing plans

Result: The couple has a clear savings strategy for their kids’ education, optimizes taxes yearly, and plans to downsize in 10 years with help from both professionals.



Scenario 4: Retired Widow Planning Her Estate

Name: Patricia, 68, retired and recently widowed Problem: Unsure how to handle investments, social security optimization, and inheritance for her grandkids

Who She Hired: A financial planner, with support from a CPA during tax season

Why:

  • The financial planner rebalanced her accounts for income stability

  • The planner also coordinated with an estate attorney to draft a will

  • The CPA helped optimize her RMDs (Required Minimum Distributions) and taxes on Social Security

Result: Patricia now has peace of mind about her finances, knows exactly how much she can spend each month, and has a legacy plan in place.



Scenario 5: Startup Founder Prepping for a Funding Round

Name: Kenji, startup founder in California Problem: Needed investor-ready financials, tax strategy for fundraising, and compensation structure for his founding team

Who He Hired: A CPA firm and a financial advisor through a startup advisory network

Why:

  • CPA built GAAP-compliant books, helped structure the SAFE notes

  • Financial planner optimized founder equity, bonus vesting, and future IPO tax strategy

Result: Raised $1.5M seed round successfully. Built in quarterly finance and tax planning as part of his startup’s operating cadence.



Takeaway: The Best Hire Depends on Your Goals

From these case studies, it’s clear:

Need Type

Who to Hire

Tax returns, deductions

Tax Accountant (CPA or EA)

Budgeting, retirement

Financial Planner (CFP)

Business taxes

CPA or full-service accounting firm

Investment or estate plans

Financial Planner or wealth advisor

Planning a liquidity event

Both (coordinated strategy)

If you're ever unsure, ask each professional how they’ve handled situations like yours. Many tax accountants now work in tandem with planners—or offer light planning services themselves. But clarity in role and expertise always leads to better outcomes.



Conclusion

Whether you're optimizing this year’s tax return or laying the foundation for lifelong financial success, choosing the right expert is essential. Now that you understand the roles, use cases, and where to hire both a tax accountant and a financial planner, you're empowered to make smart, informed decisions.

Use trusted directories, ask the right questions, and don’t shy away from hiring both professionals if your situation requires it. Financial clarity, security, and strategy are well worth the investment.



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