Tax Attorney Vs. Planner Vs. Cpa

Q: The last 2 years I've done my own taxes. This year I will need to figure out a number of issues including some large captial gaines and some unrealized gains that will get hit by the AMT as a result of exercising some stock options. Additionally I need simple advice on estate planning so as to minimize any taxes that would occur if either my wife or I died (no kids, dependants, or complications). I don't know what "type" of tax professional would be best here, in fact I don't really understand the functional difference (as opposed to school degrees) between a tax attorney, a tax planner, and a CPA. If anyone could give advice it would be appreciated.

A: I'd recommend a CPA (or enrolled agent) to plan for the AMT. You'll especially want to weigh the benefit/harm of paying CA taxes this year vs. next year, since itemized taxes are one of the adjustments for AMT. A financial planner may be helpful in developing good numbers

for estate planning; I'd recommend a fee-based planner rather than a commission-based one. Some CPAs also do financial planning like this. Part of estate planning involves working with an attorney familiar with estate taxes. This is important in a community property state like CA. Stay away from DIY estate plans; often you pay as much as you would a good attorney and don't have the guidance and hand-holding that the attorney provides. A good idea is to find a "young" attorney affiliated with a more experienced one. That way when you reach the age where you really need help, you've had a chance to develop a long relationship with an attorney who knows your likes and dislikes.