A CPA can assist you in structuring your firm so that you save taxes from the start, even if you have not yet officially registered it. Furthermore, by submitting your tax return and providing high-level tax guidance, they can save you fines and possibly minimize your tax bill.
Many small business owners miss out on savings opportunities and pay more taxes than necessary because they do not have a CPA to help them.
The sooner you hire a Sarasota CPA firm, the better off you will probably be. Before you hire one, you should grasp what they do and don't do, as well as their advantages and disadvantages.
What Does a Certified Public Accountant Do?
CPAs are mostly renowned for preparing and filing tax returns for individuals and businesses. Although they do a lot of stuff, it isn't all they do. Here are some of their main services.
Tax Planning
If you own your own business, you should worry about your taxes more than once a year. Talking to a CPA throughout the year may help you reduce your tax burden by scheduling your expenses and deductions properly.
Firm Structuring
Before you formally start your firm, CPAs can advise you on the best approach to structure it. For example, they can assist you in deciding to form a S corporation, which can save you thousands of dollars in self-employment taxes.
IRS Representation
Only a select group of people are legally permitted to represent you when the IRS audits you or threatens legal action. CPAs make up a share of that segment. The IRS can target anyone, so even if you don't operate a small business, you may need to consult with a CPA at some point.
Accounting and payroll: CPAs rarely work alone. They can work in firms alongside bookkeepers, tax preparers, and other accountants. When you hire a CPA, you often have easy access to a wide range of other services and tools.
And don’t forget about tax returns. CPAs can prepare individual tax returns, company tax returns, trust tax returns, and amended tax returns. CPAs can do easy tax returns for you, but you should only engage a CPA if you own a business or have a difficult tax position.
The Advantages of Hiring a CPA
CPAs Can Save You Time
An average individual tax return takes 10+ hours to complete, while a business tax return takes 20+ hours. These are merely averages; the more involved your return, the longer it will take to finish. Few business owners love spending hours gathering tax information, doing math, and filling out paperwork. If you engage a CPA, you will no longer have to do this, giving you more time to focus on the aspects of your business that you enjoy.
A CPA Could Perhaps Save You Money
There are various ways in which employing a CPA can help you save money. One way is to just file your tax return. If you file your taxes on your own or with software, you are responsible for calculating and claiming your own deductions and credits, which means you're out of luck if you don't know which ones you qualify for. A CPA will most likely ensure that you do not miss out on any savings chances.
Another option is to assist you in avoiding mistakes and, consequently, tax fines. If you are unaware of essential dates and rules, you may face late filing fines, underpayment penalties, or other penalties.
A CPA Can Often Provide You With Convenient Access to Accounting Services
CPAs don't simply do taxes; they also run accounting firms and hire bookkeepers. If you own a small business, you will most likely need accounting and tax services. Having the same small group of professionals manage both allows them to collaborate and develop the best tax approach for you.
The Disadvantages of Hiring a CPA
Even if hiring a CPA is the greatest option for you, it still has some drawbacks.
CPAs Cost More Than Other Specialists
A CPA is likely to cost more than a bookkeeper or tax preparer. That's because CPAs often have more schooling and must pass tough exams before becoming qualified. They must also complete mandated continuing education requirements to maintain their certification, ensuring that their expertise is up to date.
CPAs may take longer to complete your tax return as they work with numerous clients simultaneously. The number could range from dozens to hundreds, depending on the CPA or firm. For you, this may mean that your tax return will not be completed until your deadlines approach.
If you notify your CPA well in advance of any deadlines that pertain to you, they are more likely to file your tax return sooner. If you don't contact us ahead of time and your official deadline is approaching, a CPA can file both a tax extension and your return for you. Additionally, replying to information requests within 24 hours can move you to the front of the list.
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