You’ve decided that you need to hire an accounting or tax professional. So, you automatically think that you need a CPA. But do you really need a CPA? The answer to that question depends upon what type of services that you need.
Questions that you should ask all potential candidates include:
- Describe your ideal client?
- What is your formal education?
- What experience do you have?
- Do you provide bookkeeping or accounting services?
- Do you provide tax preparation services?
- Do you provide any tax planning services?
Certified Public Accountant “CPA”)
A traditional CPA focuses on tax compliance, meeting applicable tax deadlines and other reporting. They typically focus on historical activity.
As a practical matter, the only time that you absolutely MUST hire a CPA is if you need a specialized type of financial statement frequently referred to as either a compilation, a review, or an audit. But, if all you’re looking for is tax preparation, tax planning, bookkeeping, or accounting services, you have other options to consider.
A CPA is typically an accounting or bookkeeping expert but may or may not be especially experienced with tax preparation or tax planning services. If you’re looking for these services, ask extra questions about their experience.
A tax planner will start where other business advisors leave off. Tax planners scour the tax code to bring you ever credit, deduction, and loophole and work proactively year-round, so you pay the least amount of tax legally allowed.
Most CPA’s use a handful of tax deductions. We do tax planning using strategies for business owners and investors to cut thousands of dollars off their tax bill.
Enrolled Agents (“EA”)
An enrolled agent focuses on tax compliance and represents companies before the IRS to answer questions and provide requested information. They typically focus on historical activity.
An EA is a tax specialist but not necessarily an expert in accounting or bookkeeping matters. If you need bookkeeping or accounting services, ask extra questions about their experience in those areas.
An attorney defends you during tax court, assists with legal filings and proceedings, creates legal documentation needed to implement strategies. Most attorneys have some sort of specialization include tax planning or tax representation services.
Some attorneys may also provide tax preparation, tax planning, bookkeeping, or accounting services as well. If you’re looking to engage an attorney for these services, make sure you ask a lot of questions about their experience in these areas.
Bookkeepers or Accountants
The terms “bookkeepers” or “accountants” are used somewhat interchangeably but there are small differences.
What Is An Accountant?
An accountant is a person who records business transactions on behalf of an organization and may issue financial statements. An accountant typically holds a bachelor’s degree in accounting.
Many accountants may also provide tax preparation services. If you’re considering hiring an accountant, ask what kind of degree that earned and ask a lot of questions about their tax preparation experience.
What Is A Bookkeeper?
Bookkeepers also records business transactions on behalf of an organization and may issue financial statements. A bookkeeper may not have any formal education or experience in either accounting or tax law so make sure that you ask a lot of questions.
Walton CPA PC is a full service one-stop shop. We are uniquely equipped to handle all your tax preparation, tax planning, bookkeeping and accounting, and payroll services.