If you are going into business then you need to hire a CPA as early as when you are in the planning process. A CPA and an attorney can help you with the knowledge that you will need. Otherwise, you will learn the hard and expensive way. Let me step back and define a CPA.
What is a CPA and what do they do?
A CPA, or Certified Public Accountant, is a trusted financial advisor who helps people, businesses, and other organizations plan and reach their financial goals. As an accounting professional, a CPA has passed a CPA exam and maintains qualifications to be licensed. They are able to act as accounting consultants, tax consultants, auditors, and business and financial advisors. Whatever the goals-saving for a new home, opening a new office, or planning a multi-billion dollar merger-CPAs can help. (aicpa.org)
With that said, don’t let a CPA run your business. It is yours and you know it better than they do. But they can show you pitfalls you’re unaware of. They can help you structure things in the best possible way to meet your goals. Some decisions you make in the beginning might be difficult or downright impossible to change in the future.
Here are some examples of questions that will come up or decisions that will need to be made that a CPA can help with.
- Do you want to be taxed as an individual a corporation or in a pass-through entity? That whole equation was changed with the 2017 Tax Cuts and Jobs Act (TCJA).
- Are you going to run a home office and what does it take to make it deductible?
- Will you drive a company car? If so, will you buy or lease?
- What liabilities do you need to insure for?
- What kind of financials and projections do you need for financing?
- Is your spouse part owner, an employee, an independent contractor or a non-entity as far as the business?
As you read this, did you know the answers to all of those questions? Most likely, no, and that’s ok. No one has all the answers when they step into the world of entrepreneurship. And, that’s where a CPA can help.
I found an article that explains it very well.
One of the most important parts of running a business is keeping your finances in order. Hiring a person or a team of people to work with you on accounting, keeping diligent financial records, filing taxes, applying for small business loans, and planning for the long-term is one of the best decisions you can make as a small business owner. A good certified public accountant will bring invaluable expertise to your business, serving as an advisor as well as an accountant—and freeing your time to focus on other parts of your business.
To read the rest of the article, go to Fundera.com, for the blog titled Certified Public Accountant: What They Are and Why You Need One.
As always, as a CPA, I’m here to help you with your payroll, payroll tax compliance, and small business questions. Reach out to me at firstname.lastname@example.org.