The term “accountant” conjures up the image of a bespectacled individual crouched behind a computer with a spreadsheet open and, to the side, a calculator with a roll of narrow paper unfurling from it. The reality, however, is quite different: Accountants and CPAs can do much more than simply crunch numbers and perform audits. Also there are certain situations in which hiring an accountant or CPA is the very best course of action you can take. Here’s how to determine if you should hire an accountant.
Accountants and CPAs
Some people mistakenly think that the terms “accountant” and “CPA” mean the same thing, but there are some differences. Both CPAs and accountants can assist with finance-related tasks. Encompassing
- bookkeeping
- sales tax reports
- estate tax returns
- business consulting
- tax law advice
- financial statements
However, Certified Public Accountants (CPAs) have more credibility than accountants. One reason is because CPS’s have passed specialized exams and met state licensing requirements. Therefore CPAs can represent individuals and companies before the Internal Revenue Service in tax related matters. They can file taxes for their clients and signing tax returns on their client’s behalf.
Own a Business
If you plan to start a business, then now is the time to hire an accountant. A skilled accountant can help you get the financial aspects of your business set up correctly before you ever open your doors. A CPA can also help you develop a robust business plan and start filing all the correct tax forms. They can help you set up payroll to run efficiently accurately, and legally. If you already own a business, then a CPA is just as important. Some people mistakenly feel that hiring an accountant or CPA just costs too much, but they will save you money in the long run by helping you to make wise tax decisions, providing you with invaluable financial advice, and helping you to run your business in a financially efficient manner.
Protect Your Children’s Future
If you have (or plan to have) children, then an accountant can help you prepare your finances to pay for college tuition. If you plan to help pay for their college education, an accountant can assist you in setting up a trust or a savings account and help you make the most of what you are putting aside. To receive financial help such as grants or student loans, your children will have to fill out the Free Application for Federal Student Aid (FAFSA). An accountant can ensure that there are no unwanted income or assets in your children’s names that would prevent them from receiving financial aid.
Complex Taxes
Taxes can get very complicated once you have moved beyond the 1040EZ. And with complicated taxes it is very easy to make costly mistakes. Hiring a CPA to assist you with your taxes provides several key benefits, such as
- Making sure that you are following tax laws correctly
- Minimizing what you have to pay
- Tracking down legitimate tax write offs
- Keeping up with all the latest changes to the tax code
- Planning for future years
- Reduction in the chances of being audited
- Assistance if audited
- Saving time and frustration
An accountant can be a tremendous help, especially if you own your own business or have multiple income streams.
Retirement
Your retirement is very important, and the advice of a CPA can be invaluable. It is very important to protect what you have invested in your retirement. Their in-depth knowledge of tax law can help you create as much wealth as possible for your later years. Especially if you have chosen to self-direct your investments (e.g., investing in cryptocurrency or real estate as opposed to CDs or bonds). Accountants can help you make wise decisions not just for this year’s taxes, but for your plan for the future, as well.
Inheritance
If you receive a large inheritance, you need to secure the assistance of an accountant. To help you avoid unnecessary taxes on the inheritance and to avoid having to pay an increased tax rate later on. A good CPA will help you navigate the complex tax laws involved and help you make sure that you are only paying what is necessary.
Do You Need an Accountant?
If you own a business, plan to help your children with their college expenses, have complicated taxes, are preparing for retirement, or receive a sizable inheritance, you really need to the skills and experience of an accountant or CPA. If your needs involve taxes, then a CPA would probably be a better choice than an accountant. Reasons are because of the additional support they can provide when it comes to taxes and dealing with the IRS. While some people may balk at paying for these types of services, you will undoubtedly save money (and frustration) in the long run. Hiring the services of an accountant or CPA may be the wisest financial decision you ever make.
F/B/O Services
AT F/B/O Services, we offer industrial strength accounting for families, as well as full service tax advice and compliance. Our highly qualified team also offers special services such as litigation support or forensic accounting. We work with individuals, trusts, LLCs, partnerships, and payroll. If you believe that you need the services of a skilled, experienced CPA and accounting team, contact us today to find out how FBO Services can help you.