When to Call an Expert and What You Need When You Do
Most of the time filing your taxes isn’t a complicated process, but there are times when you may want to call in the cavalry to ensure that you meet all of your federal, state, and local tax obligations. A certified public accountant (CPA) can help, say tax experts at the Pennsylvania Institute of Certified Public Accountants (PICPA).
Why Do I Need a CPA?
CPAs are the professionals to turn to for tax advice as well as for personal financial planning services, investment advice, estate planning, and more.
There are important differences between a CPA and someone who just offers basic bookkeeping or tax return services. You may see advertisements for people offering tax preparation services. These individuals typically are not CPAs. Their goal is to drop numbers into your tax return and get it filed; CPAs assess your overall financial situation and help you put together tax strategies that will benefit you in the short and long term.
The CPA designation is one of the most widely recognized and highly trusted professional designations in the world. CPAs must meet stringent qualifications and licensing requirements, adhere to a code of ethics, and pass an exam before they earn the CPA designation.
When Do I Need a CPA?
A CPA can help when you need financial advice or your tax situation is trickier than simply filling out the standard IRS Form 1040. If any of the following apply, you may want to consider working with a CPA:
- You own a business.
Being self-employed brings a new world of deductions, credits, and retirement account planning that you may have never encountered before. In addition to helping you find all the available deductions, a CPA can help you structure your business, put together a plan for the future, and help you address any problems as you encounter them.
- You face a major life change.
Marriage, divorce, job change, new baby, an inheritance, or retirement all can impact your financial situation.
- You have real estate or taxable investments.
If you own rental property, a CPA should be on your list of best friends. Owning a rental opens up a lot of special tax situations that you’ll want to take advantage of and make sure you aren’t making any mistakes. The same thing can go for buying and selling a home or other real estate. And don’t forget about tracking gains and losses on taxable investments.
How Do I Choose a CPA?
The first step is to interview potential CPAs to find the right fit. Ask people you know if they can refer you to a CPA, but you should also visit the PICPA’s consumer webpage.
As you interview potential CPAs, ask questions to ensure your interests are protected, as well as your assets.
- Does the individual hold an active CPA license?
- Does the CPA have the experience you need? What services are offered?
- Who will be working on your account?
- How will you communicate? What is their policy on timeliness for returning e-mails or phone calls?
- What is the CPA’s policy on deadlines? Do they file by the due dates or do they plan to file extensions?
- How is your confidential information protected?What is the fee structure? How is billing handled?
Heading into your first meeting with your new CPA, be sure you’re prepared. Here are some ways to ensure you’ll make the most of your time.
- Know what you want.
Whether you need help with taxes, personal financial planning, or saving for retirement, having a list of topics to discuss will help your CPA formulate their questions for you.
- Take your documents with you.
Arrive at the first meeting with past tax returns, bank statements, and statements for any investments. This helps a CPA form a complete picture of your financial situation.
If you are in the process of a major life change, or have one on the horizon, keep your CPA up to speed.
A CPA Is a Strategic Partner
If you’re used to doing your taxes on your own, you may wonder why you should ever reach out to a CPA for help. CPAs do so much more than tax work. CPAs are financial experts who can become your strategic partner. They will help you take an objective look at your financial situation and assist with decisions that will help you maximize your income, minimize your tax liability, and make sound, long-term investing decisions.
For great tax and financial planning advice and tips for every stage of your life, or to find a CPA in your area, be sure to visit the PICPA’s consumer webpage.