“CPA” stands for Certified Public Accountants, and CPAs are high-level accountants with a great deal of training and expertise. They are certified by the state and required to stay up to date with the latest tax laws in order to keep their license.
A CPA must pass the Uniform CPA Exam, which lasts several days and covers an in-depth review of tax law. They must also take professional continuing education courses. None of the previously mentioned tasks are required for a regular accountant.
Therefore, working with a certified public accountant means that you are working with a tax expert. If you run a small business and are wondering, “Do I need a CPA?” consulting them is nothing but beneficial. They can be your bookkeeper, prepare your tax documents, handle the filing of your tax return each year, and more!
What Does a Certified Public Accountant Do?
There is a wide range of jobs that a CPA can do, such as:
- Bookkeeping
- Tax Preparation
- Tax Return Filing
- Forensic Accounting
- Payroll
A CPA can represent you before the IRS during a tax audit. You may think that an enrolled agent can also take on this responsibility. Granted, they can, but CPAs can do both tax planning and representation, making it worth your wild to have one person do both jobs. After all, a CPA is in a good position to see the big picture of your tax situation and make your case on your behalf.
A CPA can also provide crucial financial help, such as explaining the tax code, which is a document that explains all of the rules to follow when sending a percentage of income to the government.
The tax code is thousands of pages long. For people who run their own business, they may not have the time or understanding for this complicated document. That’s why you should consider speaking with a tax professional.
How Much Does Hiring a CPA Cost?
According to Indeed, the average annual salary of a CPA in Virginia is $74,409, which means they charge an hourly rate of $37.20 based on 40 hours of work per week. But keep in mind that these figures vary according to the tax firm you work with and the services you need. Make sure you ask the CPA about other costs, including:
- Administrative fees
- Paperwork fees
- Other applicable fees and services
Each small business is set up differently, which means that they approach tax filing differently to accommodate their needs. A tax professional can help you to save money by organizing your business taxes and filing your tax returns because not everyone can easily use tax software, which can be risky for your business.
Moreover, CPAs can help you make sound financial decisions for the good of your company. Think of working with CPAs as a long-term investment that protects the future of your business.
When Should You Hire a CPA?
As we mentioned, your business needs are unique, so you won’t necessarily require a CPA for all of the jobs listed above. You may require assistance with only some of the jobs or need a consultation. There are two major instances where you should hire a CPA:
At the Start of Your Business Venture
You most likely have a small budget when launching your business. Consequently, paying almost $40 for however many hours with a CPA may not be on your list of priorities, but it’s an investment. They will ensure you start your business off right.
Here’s how they can help:
- Choose your business structure: The business structure can be an LLC, a sole proprietorship, a co-op, a partnership, or even a corporation. The structure will determine how to report and file your taxes, as well as require a lot of paperwork, including licences and insurance.
- Choose between cash or accrual accounting: Depending on the business structure and type, the IRS may require you to use the accrual method. Cash accounting is simpler, but accrual accounting provides a much better idea of the business’s income and expense during set time periods. You record the amounts when they’re billed rather than when you receive the money as in cash accounting.
At the Start of the Tax Season
CPAs aim to reduce your tax liability for the following year with financial strategies. As we mentioned above, they also perform a variety of other tasks, from preparing tax documents to filing tax returns to representing you if the IRS audits you.
Because business taxes are different from personal ones, CPAs are incredible professionals who know what they’re doing. They can help you to:
- Comply with tax changes: When changes are made to the tax code, a CPA can provide clarification and show how the changes affect your business.
- Claim the right deductions: CPAs can prevent you from making mistakes, such as claiming the wrong deductions that can instigate an audit. Additionally, a CPA can inform you of tax breaks you may not have known about. When individuals operate their small business out of their home, that can cause some confusion when it comes to tax filing, especially if you also have an office at your business location.
Hire a CPA for Your Small Business Today
If you’re a small business owner or a high-income individual, save yourself the late nights and headaches by hiring a CPA. Vienna, VA is home to TPI Group, your tax planning professionals! We can help you to organize your records and financial statements, assess your financial situation, and have your documents ready for tax season.
Hire a CPA today by contacting us for more information!