Can Financial Advisors Legally Offer Tax Services?
For many financial advisors, expanding services to include tax planning feels like a natural next step. Clients are already looking to you for guidance on retirement accounts, investment strategies, and overall financial wellness — so why not taxes too?
But the line between financial planning and tax services can get blurry fast. The key question: Can financial advisors legally offer tax services?
Let’s break it down.
What Kind of Tax Services Are We Talking About?
First, it’s important to define what “offering tax services” actually means. This could range from basic tax guidance — like projecting tax liabilities or discussing the tax implications of a Roth conversion — to full-on tax preparation or filing returns.
The more in-depth the service, the more regulatory scrutiny comes into play.
Yes, But It Depends on Credentials
The short answer? Yes, financial advisors can offer tax services — but only if they’re properly licensed and operating within the scope of those credentials.
Here’s how it breaks down:
CFPs®: Certified Financial Planners can provide tax planning advice, but they can’t prepare or file taxes unless they hold additional credentials.
CPAs: Certified Public Accountants are qualified to provide both tax planning and tax preparation services. If you’re a CPA operating as a financial advisor, you’re in the clear — assuming you’re following your state board’s rules.
EAs: Enrolled Agents can legally prepare taxes and represent clients before the IRS. Many advisors with tax practices pursue EA status to offer more comprehensive services.
Uncredentialed advisors: If you’re not a CPA or EA, offering tax prep or filing services without the right license could put you in violation of IRS rules or state laws.
So, What’s Considered “Crossing the Line”?
Talking about tax-efficient strategies? Fine.
Filing a return or offering legal interpretations of the tax code without a license? Not fine.
Even if you’re confident in your tax knowledge, if you’re not authorized to offer tax prep or legal tax advice, you risk overstepping your regulatory bounds.
If you’re ever unsure, your compliance team should be your first call.
Common Pitfalls to Avoid
Here are a few mistakes that can unintentionally cross into unauthorized territory:
Offering to file a client’s return “as a favor”
Including tax prep in your service offering without the proper licensing
Marketing yourself as a “tax expert” without credentials to support it
Giving advice that could be interpreted as legal tax advice
Remember: good intentions won’t protect you from regulatory consequences.
What If You Want to Offer Tax Services?
If tax planning or preparation is something you want to formally offer as part of your practice, there are two main options:
Get credentialed. Pursuing an EA or CPA license allows you to provide tax services legally and confidently.
Partner with a licensed tax professional. Many advisors form relationships with CPAs or EAs to create a seamless client experience without taking on the liability themselves.
Either way, the key is clarity — both for regulators and your clients.
So, Can Financial Advisors Offer Tax Services?
Yes, financial advisors can offer tax services — as long as they’re qualified and careful about how those services are positioned and delivered.
Whether you’re just giving high-level tax guidance or looking to bring prep in-house, be sure to stay aligned with your credentials, your firm’s compliance standards, and all applicable regulations.
Need a clearer view of how to compliantly expand your service offerings? Our team helps advisory firms define the right boundaries — and stay within them. Get in touch.
