Is this the Time to Hire a CPA? (Certified Public Accountant)

Thinking about handling your own taxes or using tax software? It might seem like a good idea, but there are better options. Hiring a certified public accountant (CPA) to handle your accounting and tax planning could be a plus. Sure, it’s an investment but the benefits can totally outweigh the costs. A CPA brings expertise and guidance to the table that can really help your small business thrive financially.

If you’re on the fence about whether to hire a CPA, here at USA Timely, you will find all your answers.

When to hire a CPA?

Thinking about when to bring in a CPA? Well, if you’ve got the budget for it, hiring one is probably your smartest move in every aspect. Trying to wrap your head around ever-changing tax laws, figuring out all the deductions you’re entitled to and keeping up with filings can really take you away from the main focus: running your business.

But, let’s talk specifics. You definitely want to consider hiring a CPA if:

• You don’t have a dedicated in-house accounting and finance team.
• You’re lagging behind on your taxes.
• You’ve got that gut feeling you might be audited. (Having a tax pro on your side can sometimes help dodge that bullet.)
• You’re gunning for outside funding or thinking about merging, and you need rock-solid financial statements just like an Audited Financial Statement.
• You’ve got suspicions about an employee or partner messing around with the books.

What to Consider While Deciding Who Should Do your Taxes?

Before you decide who’s going to handle your taxes, there are a few things you gotta think about:

• Check out where your business stands financially. Can you whip up accurate and complete financial statements and records? Sure, you might be able to, but think about the time it eats up and whether you could use that time for something else.
• How well do you know your personal income and your business’s income? Taxes can get real tricky for small business owners, so getting that income breakdown right is super important.
• Got a handle on your business’s accounting cycle? Do you know what it takes to keep your financials in check throughout the year?
• What’s your business’s legal setup? Depending on whether you’re a sole proprietorship, C-corp, S-corp, or something else, your tax situation can vary big time.
• How complicated are your revenue streams? If you’ve got a lot going on with your income sources, especially if they’re spread out across different places or industries, you might wanna lean towards hiring a CPA.
• Tax laws and regulations? Yeah, they’re a headache. They’re always changing and it’s tough to keep up. A CPA can help you navigate all that mess and make sure you’re not missing out on any deductions or breaking any rules.
• Is your business’s financial setup a bit of a maze? Maybe you’re dealing with tricky stuff like inventory or accounts receivable. A CPA can help sort through all that and make sure your taxes are on point.

As USA Timely explains: whether or not you decide to bring in a CPA, remember that taxes aren’t just a once-a-year thing. It’s a year-round deal, so staying on top of it is key to keeping your business running smoothly.

Hiring a CPA Pros & Cons

Pros of having a CPA on board

• CPAs are like the wizards of accounting. They’re pros at what they do, so you can bet they’ll make fewer mistakes than your average Joe. That means your business won’t get tangled up in any accounting nightmares down the line.
• They’re like money-saving superheroes. CPAs know all the ins and outs of the tax world, so they can help you sniff out every deduction and credit you’re entitled to. Plus, they’ll give you the lowdown on tax planning strategies that could save you big bucks.
• Time is money, right? Well, CPAs can save you a ton of both. Think about it: tackling your taxes solo can eat up hours and hours of your precious time. With a CPA handling it, you can kick back and focus on what you do best and this running your business.
• Ever had to deal with the IRS? It’s not fun. But having a CPA in your corner can turn the tide in your favor if you ever get audited or owe back taxes. They know all the tricks of the trade to minimize penalties, lower your tax bill and buy you more time to sort things out.

Cons of bringing in a CPA

• Alright, let’s talk money. CPAs don’t come cheap. With all their fancy education and certifications, they’re gonna cost you more than your average tax preparer or bookkeeper. For small businesses, that extra expense might be a tough pill to swallow.
• Remember tax season? CPAs sure do. It’s their busiest time of the year, which means they might be juggling a bunch of clients – including some who need help ASAP. So, if you’ve got burning questions or need your tax return done pronto, you might have to wait in line.
• Finding a good CPA can be like finding a needle in a haystack. There aren’t tons of them out there, especially if you’re searching at the last minute. So, if you’re thinking about bringing one on board, you better start your search early.
• Here’s the thing: CPAs are like the quarterbacks of the accounting world. They handle the big plays but you still need someone to handle the day-to-day stuff. That means you’ll probably still need to hire a bookkeeper to keep your financials in tip-top shape.

Tips to Do your Company Taxes

When it comes to handling your business taxes, you’ve got a few options:

Do your business taxes yourself

If you’re up for the challenge and have a knack for numbers, you can tackle your business taxes solo. This option works well for business owners with a simple setup and a good grasp of tax basics. Mark Aselstine from Uncorked Ventures found that his straightforward business structure made it easier for him to handle his taxes on his own. He recommends trying out bookkeeping for a bit before making the switch from a CPA.

Pros of doing your own taxes with tax software

• It’s inexpensive
• Gives you control over your taxes
• Suitable for simple business models

Cons of doing your own taxes with tax software

• Less audit support than professionals can offer
• May require additional research
• Can’t override system defaults

Use a third-party tax service

If you’d rather not handle taxes yourself but don’t want to splurge on a CPA, a third-party tax service could be the way to go. Highly reputed companies can take care of your business taxes at a more affordable price point. Just keep in mind, you might not get the same level of financial analysis as you would with a CPA.

Pros of using a third-party tax service

• Reasonably priced
• Convenient
• Good for simple business models

Cons of using a third-party tax service

• Limited knowledge base
• Limited audit support
• May not offer customized calculations

Hire a CPA

Bringing in a CPA can be a game-changer for your business taxes. While it’s a pricier option, the expertise and peace of mind they provide are worth it for many business owners.

Pros of hiring a CPA

• Full audit support
• Expert knowledge of tax laws
• Help with business modeling

Cons of hiring a CPA

• Expensive
• By appointment only
• May be overkill for simpler businesses

“Consider hiring a tax consultant if you require strategic tax planning and help on difficult tax concerns.”

CPA Frequently Asked Questions

How much does a CPA charge per hour?

CPA rates vary widely. A junior staff member at a CPA firm might charge around $60 per hour, while the owner of the firm could charge up to $250 per hour. In areas with high demand, top-notch CPAs might even charge as much as $500 per hour.

How do I hire a CPA?

Hiring a CPA is pretty straightforward. Start by reaching out to one for a consultation. But before you seal the deal, do your homework. Make sure they’ve worked with businesses like yours before. Figure out if you just need tax help or if you want someone to handle bigger financial tasks. And don’t forget to check reviews to see if they play well with others.

“Your company depends on its employees, they have the power to make or break it. It’s important to know how to recruit employees? in order to hire top people with effectiveness.”

Which qualifications should you look for when choosing a CPA?

Experience in your industry is key when picking a CPA. But that’s not all, make sure they’ve got the right-sized team to handle your needs. They should be quick to respond, offer the services you’re after, and be happy to provide references from other clients.

What’s the difference between a CPA and an accountant?

It’s a legal thing. A CPA is just an accountant who’s got the license to back it up. Only CPAs can do certain stuff like offer attestation services or act as a fiduciary to you.

When should I hire an accountant?

Consider bringing in an accountant if your taxes are starting to look like a Rubik’s Cube. They can also save you time if you’re drowning in paperwork. Generally, it’s a smart move unless your business is super simple with minimal expenses.

How much does it cost to hire an accountant?

The cost varies. Non-CPA accountants might charge less, maybe around $30 or $40 an hour but some might charge more depending on their expertise.

How long does it take an accountant to do a tax return?

Well, it depends. Simple returns can be done pretty quick, but if you’ve got a ton of forms to wrangle, it might take a bit longer. The good news? Even the busiest accountants can take the tax filing burden off your plate.