CPAs are here to help
Taxes can seem overwhelming when you've got a complex financial situation and need to understand the ins and outs of the tax code. Fortunately, you don't need to navigate this problem alone: Qualified tax professionals are available to help when you need it.
Certified public accountants, better known as CPAs, can assist you with preparing your personal tax documentation, work with you for making informed financial decisions, help you complete your businesses accounting and taxes, and much more.
If you're wondering, "Should I hire a CPA?", we’ll further explain what a CPA does, how they can be useful, and answer common questions about these licensed professionals.
What does a CPA do?
CPAs assist with several areas of accounting, including taxes, financial accounting and reporting, tax and accounting audits, and financial planning. Here are some of the most common ways a CPA can help with your taxes and financial needs:
They assist with preparing and filing tax documents as well as offering advice. When you have a simple tax situation, you can equip yourself with a tax preparation checklist and likely handle your taxes yourself. When you face a more complex tax picture, you may find hiring a professional is worthwhile. CPAs can help you online or in person to prepare and file your necessary tax documents as well as offer advice on how to optimize your tax return. Hiring a tax professional often works to your advantage when your circumstances are complex or involve a significant amount of work.
They inform you of your tax liability and deduction options. CPAs know how to report your income sources, apply the appropriate deductions and credits, and calculate your tax liability.
They can liaise with IRS personnel, including navigating audits on your behalf. CPAs understand the questions the IRS might ask of you and know how to provide the information requested. In the event of an audit, it can be helpful to hire a tax professional to handle your correspondence. If you hire a CPA from the outset, they'll know which red flags might trigger an IRS audit and how best to avoid them.
They break down your personal vs. business taxes. CPAs can assist you with structuring your business as an LLC or S-corp and electing to be treated as a C-Corp, or forming a partnership. They can also help with keeping your personal and business finances separated and understanding your tax liability of each.
When is having a CPA useful?
Sometimes, you may want to hire a CPA for a short period to help you navigate a specific financial situation, such as:
Examining your retirement account options. When deciding how to save for retirement in a tax-smart manner, hiring a CPA might be advantageous. This remains especially true when you consider the wide range of investment options your retirement savings can use to grow your nest egg. If you are self-employed, you likely have even more available options than an employee and will want to make sure you use your retirement options to their fullest. A CPA can help you better understand these options.
Navigating your first year as a business owner. In your first year of business, you'll likely be focused on running the company and working to grow it into a profitable venture. CPAs can help you prioritize your business goals by handling some of the administrative tasks, including budgeting, bookkeeping, financial accounting and reporting, tax planning, and tax preparation and filing. A CPA can also provide sound financial advice for your growing business.
Adjusting to a tax change from a life event. When you experience a life event, such as getting married or having a child, your tax situation often sees a significant change. You might consider hiring a CPA to adjust your tax planning to account for this life event.
A CPA can also help you navigate a transaction such as selling your property, or advise you on how you should handle a stock option offered by your employer.
How does a CPA help during an audit?
While not every communication from the IRS related to your return instantly means you've been selected for an audit, you do want to handle any questions asked appropriately and provide an adequate response.
Because CPAs speak the same language as the IRS, they can properly handle your communication with this federal agency. They can help you supply the relevant information requested and resolve your issues as quickly and painlessly as possible. Even if the request seems minor, hiring a CPA to represent you is often a wise move.
Do I need to see a CPA more than once?
Most people only think of hiring a CPA when they prepare their tax return. While CPAs can provide valuable tax advice on how to prepare your return, they can also provide year-round tax advice. This can save you significant amounts of money come tax time.
You can meet with a CPA during tax time if you have a complex tax situation, but you can also consult one before starting a business or when you have a complex financial decision to make.
What is an online CPA, and should I hire one?
Fortunately, meeting with a CPA does not require a face-to-face meeting. As working online has become increasingly common, you now have the ability to consult with a CPA online.
TurboTax offers year-round access to tax professionals capable of helping you answer simple and difficult tax questions alike. Being proactive and consulting with a CPA online can provide you with valuable advice — saving you time, stress, and money.
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