Most people think about hiring a CPA when it’s time to do their taxes, but there are many other reasons to get one. Whether it’s for handling personal or business finances, a good CPA can be an invaluable resource. Most entrepreneurs don’t start their journey with a great deal of knowledge about how to manage business finances, and almost all of them would welcome the expertise of a CPA when it’s time to file their taxes. This person can put you and your business on the path to financial success and help you find areas that need improvement.
The Difference Between a CPA and a Tax Preparer
While the IRS has an online database of people with a Preparer Tax Identification Number (PTIN), everyone can call themselves “tax preparers.” Anyone who wants to prepare a federal tax return for compensation must have a PTIN, but there are no education or experience requirements to get listed in the IRS database.
While not all tax preparers are CPAs, not all CPAs are tax preparers. But if you can find a CPA with experience in tax preparation, you can be sure it will be done accurately by someone with the right knowledge (which can save you both time and money). It can help you avoid any possible IRS penalties or audits later on, but the experience of a CPA goes beyond tax preparation.
Because of the educational demands and testing requirements that CPAs must be able to fulfill, they can help you with many different issues. This can include future tax planning, coming up with college or retirement savings plans, as well as taking care of various financial problems. A lot of CPAs have the Personal Financial Specialist credential, which means they have additional expertise in personal finance. So if you’re looking for someone who can help you throughout the year and not just during tax time, a CPA/PFS may be the person you need.
How to Find the Right CPA for Your Specific Needs
Not only do you have to think about what you need a CPA for, but you also need to think about the areas where this person can be helpful. A CPA will have experience in a number of areas, which can include the following:
- Retirement and education savings planning.
- Personal financial planning for your life goals.
- Proactive planning for all your financial concerns.
- Starting and running a business.
- International and multi-state tax planning.
- Financial planning for a side hustle.
- Interviewing prospective CPAs.
CPAs usually cultivate relationships with their clients over a long period of time, so you want to be sure you can find someone with whom you’ll enjoy working. Don’t be afraid to ask questions that can help you get a better understanding of whether they’re the right fit.
Questions You Should Ask a Prospective CPA
The first question you should ask is what type clients make up most of their practice, because you want to hire someone who works with people with needs that are similar to yours. You also want to ask them what type of services they offer to those clients, because you want to make sure they can do the kind of work you need them to do.
You want to know how they can help you save money and lower your tax bill. No CPA can give you a detailed answer without having specific information about your finances, but he or she should be able to talk about possible options that can help you improve your financial situation.
One of the biggest advantages of working with a CPA is that you can approach this person for a number of financial issues. So if you need advice in the future, you can ask them about their policies and availability. Most of them will be available throughout the year and will expect their work to extend beyond tax time.
CPAs will be happy to put you in touch with clients who can tell you about what it’s like to work with them, so be sure to ask them for any references. Those clients may have needs that are similar to yours or may be in similar industries. You also don’t want to be surprised when it’s time for a CPA to bill you, so you want to make sure both of you are clear about how much he or she will charge. That way, your relationship will start of on the right foot.
If you’re looking for a CPA in Corpus Christi to help you with your personal or business finances, be sure to reach out to Jennings & Hawley.