Tips & Advice
Is it recommended to hire a CPA for business taxes?
Many experts recommend that you hire a CPA for business taxes instead of hiring an accountant without the CPA designation. A CPA is qualified to represent you if your business is audited by the IRS; an accountant who does not have the CPA designation is not eligible to handle this task. Also, CPAs must maintain state licensing; keeping this license current requires them to stay abreast of tax laws. This gives them a command of the tax code that can help your business minimize its tax burden.
An audit is a process in which the accounts of a company or an individual are officially inspected to ensure that financial representations made are accurate and within the letter of the law. With organizations, an audit may be done internally by an employee of the company, or it might be handled externally by an outside auditor. Audits can also be conducted by the IRS, which is typically done to make sure that the reported amount of tax is accurate.
CPA stands for certified public accountant, and this professional may be hired by an individual or by a company. A CPA may oversee budget and financial management, or maintain a company's financial records. They might act as consultants, tackling things such as compensation and benefits. Also, CPAs may assist a company with fraud prevention and strategic planning.
Is it necessary to hire a CPA for personal taxes?
It's not always necessary to hire a CPA for personal taxes, but doing so brings certain benefits. A CPA possesses useful experience and training in tax preparation, and might be able to share tips that can help you reduce your tax burden. If you have a complicated tax situation, a CPA will be able to help you navigate your return in a way that drastically reduces the risk of an error that could potentially trigger an audit. Hiring a CPA to prepare your return might also save you time.
What type of education does a CPA receive?
When it comes to educational requirements, CPAs must hold at least a bachelor's degree, and they must have no fewer than 150 semester hours of formal schooling. Also, CPA candidates must obtain a passing score in the Uniform CPA exam. This exam is prepared by the American Institute of Certified Public Accountants.
How is a CPA different from an accountant or bookkeeper?
CPAs, accountants, and bookkeepers all provide financial services, but each brings a different level of authority and training.
- Bookkeepers serve a largely clerical role, and are focused primarily on things like generating daily accounting records, generating invoices, and managing payroll.
- Accountants have more training and responsibility than bookkeepers, and come armed with a four-year college degree. Accountants often serve in a managerial role, and they may oversee the work handled by bookkeepers.
- CPAs are the most technically qualified of this group. CPAs are required to have specific training and education, and they must pass an exam and obtain state licensing to legally use the CPA designation. CPAs may provide auditing, tax preparation and other financial services for companies or individuals, and they may oversee work done by bookkeepers and accountants.
How much does it cost to hire a CPA?
Hiring a CPA can cost $30-$50 per hour or more. The cost will vary based on your geographic location, and on the financial services being provided. If you're hiring a CPA to prepare tax returns for a small business, expect to pay $750-$1,500, depending on the complexity of the tax situation. Hiring a CPA to handle individual tax returns can cost $200 or more.
A CPA is a certified public accountant,who offers financial services in areas such as corporate finance, corporate governance, estate planning, and forensic accounting.