A CPA can be an incredible asset to businesses and individuals alike, and there are many reasons why hiring one is a must. Some situations are more pressing than others, but the truth is that you never know what the future may hold. Hiring a CPA is a good way to protect your assets and investments for your legacy, and to navigate through annoyances like audits. If you don’t already have a CPA on speed dial, here are a few circumstances and facts that may change your mind.
1. Tax Laws
This is one of those reasons that apply to businesses as much as it does to individuals. Tax laws change all the time – literally. Each year the rules get altered, new tax credits appear and other ones disappear. Unless you are constantly researching these sorts of things, you may never realize that that thing you thought was deductible no longer is, or that you now qualify for a new credit. It’s a CPA’s job to know this stuff and they get newsletters and constant updates from their governing colleges to make sure they know all about it.
2. You’re a money maker
If you make upwards of $200 000 a year, you need an accountant. Why? Because the more you make, the more likely you are to be audited. If you have a CPA firm filing all your paperwork and maintaining your records, you can rest assured knowing that if an audit does come about, you’ll have everything you need to substantiate your financial history in one tidy package – not to mention it will be your CPA’s job to handle the audit. You can just sit back and relax.
3. Complex income
If you have income from multiple sources, including foreign income and own foreign holdings, an accountant is your best friend. Tax obligations and regulations can become dense when you start to wade into these waters. Having someone who can figure it all out without breaking a sweat is a great benefit. This is also true if you are a landlord and hold investment properties. Between international tax laws (www.wisegeek.com/what-is-tax-law.htm) and domestic ones, it’s easy to get lost in what is and is not your responsibility or obligation.
4. You’re self-employed
If you are self-employed then you have definitely attempted to file, or have filed at least one tax return on your own. How complicated was that? You can easily become deluded once you start sifting through the various tax forms and requirements for those who are considered self-employed. At first it seems so simple, and then one form starts references another form, and then they want slips you’ve never even heard of before – stressful! Income, expenses, assets, losses – the works – all gets tied into your personal taxes if you are a sole-proprietor. As an incorporated business you have the benefit of being able to separate church and state – or in this case personal and business financials – but many self-employed people operate as a sole-proprietorship and this can make things more complicated come tax time.
5. You already owe back taxes
No one wants to be in this spot, but it happens more frequently than you might think. Sometimes people get slapped with larger than expected tax bills, and not everyone can afford to fork over the dues on demand. An accountant can help you. Your accountant will help you understand the situation you’re in and the options available to you. You can set up instalment payments, or make arrangements with the IRS directly, but your CPA will be able to guide you through it all.
Don’t leave hiring a CPA to the minute when your world is falling apart. Getting a certified accountant on your team, even if it’s contractual or on a part-time basis, is an excellent preventative measure. They can advise in reorganizations, explain the pros and cons of choosing certain investments over others, and discuss your plan for the future of your business management, while also helping you to achieve it.
If for no other reason, you should hire a CPA immediately out of good judgment and business sense. There are some things that should always be left to the professionals, and accounting is one of those things.