Both small-business owners and individual taxpayers with complex situations are known to turn to professionals when it comes time to file their taxes. The industry recognizes four different kinds of professionals, three of which are good choices and one that is completely inappropriate. For the purposes of this article, most of our attention will focus on CPAs and bookkeepers.
CPAs and bookkeepers are two distinctly different financial professionals. They serve different purposes, and those purposes should not be confused or overlapped. Suffice it to say that small-business owners and taxpayers should choose a CPA over a bookkeeper for filing their taxes. Here are the top five reasons:
5. High Ethical Standards
CPAs are required to adhere to high ethical standards as part of their certification. As such, they are less likely to cut corners or recommend clients do things that are ‘on the edge’, so to speak. A CPA does not want to risk his or her reputation, certification, or the health of his/her own business by not treating each and every client with the utmost fiduciary respect.
4. Ongoing Education
Gurian CPA Firm, one of the leading CPA firms in Dallas, says that certified CPAs must undergo continuing education in order to keep their certifications. This education focuses mainly around changes in tax law. Regardless, you can rest assured that a certified CPA knows taxes inside and out.
Bookkeepers may or may not undergo continuing education. Whatever education they do receive will probably not be centered around tax law.
3. Specialized Knowledge
CPAs have specialized knowledge that makes them more than capable of handling unique circumstances and complicated filings. For example, they are familiar with special tax rules that apply to startups. Bookkeepers are more general in their tax knowledge. They would not be expected to know all the minutia of federal and state tax law.
2. Unlimited Representation
The reasons for choosing a CPA’s tax services get more important as we move down the list. So it’s no surprise that unlimited representation before the IRS is number two. If nothing else, small-business owners and individual taxpayers should be choosing a tax professional with the ability to represent them before the IRS in any matter whatsoever. That ability rests in a CPA. By contrast, an employed bookkeeper would only be helpful to a limited degree in the event of an audit.
1. More Than Just Taxes
The number one reason to choose a CPA over a bookkeeper is the reality that CPAs do a lot more than just file annual tax returns. CPAs are licensed professionals capable of advising small business owners and individuals on a full range of financial matters. So not only does the client get help at tax time, he or she gets additional help throughout the year.
In closing, it is only fair to mention that there are other options. Should a small business owner or individual taxpayer not want to use either a CPA or a bookkeeper, he/she might choose an enrolled agent instead. An enrolled agent is also certified professional, but his/her certification comes directly from the IRS. He or she could do much the same thing as a CPA – including unlimited representation.
Tax preparation companies are an option. However, they can get quite expensive for small business and complex tax needs. The amount of assistance they offer is typically not commensurate with their fees when compared to what a CPA offers.
At the end of the day, the CPA is still your best bet for taxes. Small-business owners and taxpayers with complex situations can rely on CPA tax services with complete confidence.