THE DIFFERENCES BETWEEN A CPA AND A REGULAR ACCOUNTANT

 

Certified Public Accountants (CPAs) and regular accountants perform almost similar functions. While all CPAs are accountants, all accountants are not CPAs. Here are some of the differences between CPAs and general accountants.

LICENSING

A Certified Public Accountant (CPA) is a general accountant who has passed rigorous testing and met strict jurisdictional licensing requirements. A general accountant can only become a CPA after passing certain tests conducted by the country’s respective Institute. In the US, requirements vary by state, but they typically require minimum educational training (usually a bachelor’s degree in accounting), passing the CPA exam as well as meeting minimum experience requirements. Contact CPA Henderson NV.

Candidates for the CPA credential take a uniform exam, administered by the American Institute of CPAs (AICPA). The exam tests one’s knowledge and application of accounting principles and concepts in four main areas:
•Financial accounting and reporting
•Regulation
•Auditing and Attestation
•Business environments and concepts

After graduation and a year of practical experience under a CPA, a candidate must pass a comprehensive test of tax, auditing, business, and general accounting skills. After getting licensed, CPAs are also required to maintain their professional competence by continuing to take educational classes throughout their career. Continuing education helps CPAs stay up to date on accounting best practices and keep up with the changes in the accounting world.

A general accountant, on the other hand, is anyone who can perform the basic functions of recording and reporting of financial and business transactions. Although typically an accountant does have a degree in accounting or related field, it’s not a strict requirement.

General accountants will often perform tasks such as maintaining general business accounts, bookkeeping and handling simple tax matters, among other duties. A general accountant looks after financial records and has a good knowledge of cash flow, owner’s equity, balance sheet and chart of accounts, and how they’re going to affect the business. Nonetheless, general accountants with the appropriate level of training and experience can perform a broad range of services.

FIDUCIARY RESPONSIBILITY

You can expect accountants to prepare three main types of financial statements: compiled, audited and reviewed. CPAs can provide all three kinds of financial statements while a general accountant can only prepare a compiled financial statement. Many private, as well as public businesses that are required to have their financial statements audited or reviewed, will find that only a CPA can audit and review financial statements and provide the relevant reports. As such, this is one of the main factors to consider when deciding between going with a general accountant or a CPA.

Small companies that don’t sell shares, for example, may get along fine with a general accountant. However, larger firms selling stock in the securities exchange need the expertise of a CPA to provide audited statements so investors can judge the stock’s worth.

TAXES AND REGULATIONS

General accountants may prepare proper returns, but working with a CPA comes with distinct advantages. A CPA is likely to be more knowledgeable in tax codes due to their rigorous educational training and licensing examination.

One other crucial factor is that CPAs are eligible to represent their clients before the IRS (Internal Revenue Service) in the event of audit support requirements, while general accountants are not.

CODE OF ETHICS

The accounting profession, like many others, presents numerous circumstances when ethical considerations have to be made. While general accountants should maintain acceptable ethical standards, they are not bound by a strict code of ethics or the need to meet the high standards of professionalism expected of a CPA.

Moreover, CPAs are considered to have the legal obligation and power to act on and behalf of their client’s best interests. General accounts are not considered to have a fiduciary responsibility to their clients. Read more….

HOW TAX PLANNING WITH A CPA FIRM CAN SAVE YOU THOUSANDS ON TAXES

Tax planning can save you hundreds to thousands of dollars on your taxes. If you’re not a financial expert and you need to make judgment calls based on extensive tax experience, hiring a CPA firm for tax planning can help you get the most for your money in the long run.

Tax planning aims to arrange your financial affairs to keep your taxes to the minimum. A CPA is well trained in tax planning and can provide valuable information on the best strategies you can employ to reduce your taxes for a given period.

PAY LESS TAX

The most crucial reason you should prioritize tax planning is to pay less overall tax. With some planning and the input of a CPA, you can reduce your tax burden in the current year or future years. A CPA can help you find deductions and credits you probably didn’t know about. Most people benefit from tax planning but is it especially important to let an expert handle the taxes if:
•You are a business owner or self-employed
•You have a major financial event during the year like retiring, selling a home, marriage, divorce or had a child.
•You’ve moved, especially between states
•Your investments have significant unrealized gains or losses
•You’ve had a dramatic change in income (up or down)
•You’re sending a child to college for the first time
•You own a rental property
•The IRS contacts you, say, for an audit

There are several fundamental ways to reduce taxes such as lowering the amount of taxable income, taking advantage of tax credits/tax relief, allowing greater control of when taxes get paid and increasing your deductions. Each method has several variations, and a CPA is well equipped to choose the best strategies for your particular situation.

If you own a business, for example, there are numerous possible tax write-offs, and only a professional has the technical know-how to help you navigate them. The same applies if you’re doing significant work in the gig economy. If you’re selling products online or driving Uber, for instance, you might need help with your taxes.

Hiring a CPA for tax planning may be somewhat expensive, but in many cases worth the money spent. A CPA will provide value in complex situations. They can advise you on the best tax reduction strategies based on their experience and interpretation of IRS rulings.

If the IRS is auditing you, a CPA can represent you, so you don’t have to go it alone. You can also count on their expertise to provide as much relevant information as possible. Contact CPA firms Las Vegas.

TAKE ADVANTAGE OF TAX LAW CHANGES

Every so often, at least nearly every year, the federal government changes the tax laws. Sometimes the changes are minor, with little significant impacts, and sometimes the changes are major, possibly having a massive impact on your total tax. Regardless of the type or number of law changes, the result is that what’s true one tax year may be untrue the next year.

Law changes make tax planning important, so you’re able to take advantage of the changes. Maybe you need to act before changes take effect. Or perhaps you need to hang on a little longer until the next year to benefit from a change in the law.

Working with a CPA on tax planning gives you an opportunity to take a proactive approach to the changing environment. CPAs are well informed about tax laws and can help you navigate the murky waters of tax planning to reduce your tax bill.

ALLOW FOR ENOUGH TIME TO IMPLEMENT PLANNING IDEAS AND MAXIMIZE TAX BENEFITS

While it’s possible to implement some tax planning strategies at the last minute, most require much more time for analysis and implementation. Tax minimization strategies such as legally shifting incomes between individuals or companies can take months or even longer.

If you run a business or have a rather complex tax scenario, it’s essential to start tax planning early enough, so you have the mechanisms in place to implement the ideas and gain maximum benefits from the process. Read more..

 

DID YOU KNOW THAT CPA’S ARE ALSO THE BEST BUSINESS CONSULTANTS?

A significant part of growing your business involves getting the right professionals to help you. And that’s where consultants come in. When it comes to business consulting, rarely do we think of accountants.

Well, a certified accountant can do much more than file your taxes and handle the payroll. There is a broad range of business issues that your CPA can provide solutions for, which can make him or her an excellent addition to your team of consultants. Here are some of the ways a CPA can help you steer your business towards growth.

HELP WITH BUSINESS PLANNING

A CPA can guide you through some of the major milestones of your business or company. You can bank on your accountant to come up with a detailed business plan that can help you expand your operations or attract new investors, for example. An accountant can also help you avoid common pitfalls, as well as guide you on the preparation of realistic revenue and expense projections.

ADVICE ON REGULATORY COMPLIANCE

Navigating financial regulations can be tough, especially if you have no accounting background. A CPA, on the other hand, will be familiar with the financial regulations, which can vary greatly depending on the jurisdiction. A competent CPA will also have a deep understanding of your industry and help you to integrate the best accounting practices to your company.

Only a seasoned professional such as a CPA can help you identify the kinds of expenses you can write off on your taxes. As such, your certified accountant can advise you on how to stay in compliance with all government and tax regulations.

HELPING YOU TO STAY ON TOP OF YOUR REVENUE AND EXPENSES

An accountant can help you monitor your business progress by providing all sorts of valuable metrics such as the estimated return on investment (ROI) you’re getting from marketing expenses and the ratio of revenue to salaries and other costs. Such parameters can help you to discuss ways to increase revenue, cut costs and improve the overall bottom line of the company.

GIVING A PROFESSIONAL FINANCIAL PERSPECTIVE

Armed with the knowledge of financial reporting standards and accounting best practices gives your CPA an upper hand in asking useful questions to top management and pointing out the critical details that are relevant to senior managers and financial stakeholders.

If you have investors on board, for example, your accountant can prepare detailed reports on the business progress and profitability. Such information can be eye-opening as well as informative to investors and other stakeholders.

QUALITY TRAINING AND DOCUMENTATION

If you’re running a startup, hiring an accountant to coach you on how to manage your finances and do some bookkeeping can make a world of difference and set you on the path to success. Nonetheless, any company, whether large or small can benefit from the accounting knowledge of a CPA. That means a CPA can produce training documentation and systems to improve your in-house finance department. This transfer of knowledge and continuity to your financial personnel can go a long way in closing the skills gap and setting the foundation for an efficient financial management system.

VALUE ADDITION

Your knowledgeable CPA can perform regular financial and economic evaluations to determine what works and what doesn’t. For instance, you just implemented a new inventory ordering system. Over time, your CPA can analyze the financial implications of your changes and give recommendations on how to improve the system’s performance if necessary.

Essentially, your CPA can help you to increase revenues, implement best practices for money management, lower costs and handle financial aspects of your business that you may not understand. Contact best CPA Las Vegas.

Overall, your CPA saves you plenty of time and money. By leveraging their expertise to add value to your venture, you can grow your business and avoid some common mistakes before they turn into costly affairs. If you’re not trained in money management, a CPA is an excellent consultant to fill the financial blanks that may be preventing your business from getting to the next level. Read more..

REASONS WHY A GOOD BOOKKEEPER CAN HELP YOUR BUSINESS SAVE MONEY ON TAXES

 

When you’re running a business, every penny counts. Lowering your tax bill may be the difference between running a profitable venture and struggling to survive in an already highly competitive environment. While it’s possible to manage accounting records by yourself, hiring a financial professional is critical to the success of your business.

A professional bookkeeper will facilitate the efficient operation of your business and smooth financial management, and can also save you some good money on taxes. Here are three reasons why you can count on your bookkeeper to help put some money back in your pockets.

PROFESSIONAL RECORDS

One of the more valuable services your bookkeeper will provide is accurate year-round bookkeeping, which is absolutely crucial to filing for taxes. A professional bookkeeper will help to identify and track all relevant documentation for financial records like receipts, employment taxes, advertising, expenses, contractors and equipment assets. This will help your business prove that what you report in your filing is accurate. That means you’ll get it right the first time hence no need to worry about fees and penalties.

In addition to managing your books, a highly trained and experienced bookkeeper can help you avoid complicated tax issues by keeping a trained eye on your business transactions. If you find yourself being audited by the IRS, you’ll definitely want to benefit from the backing of a seasoned professional who is ready to support you with well managed professional records.

ACCURACY

A professional bookkeeper will also provide the reconciliation of accounts. This means they’ll align specific transactions on your credit card and bank statements with corresponding transactions in your business accounts.

Reconciliations may seem small, but they help to eliminate many errors. What’s more, you cannot make accurate tax filings without accurate records. Your bookkeeper will also uncover any anomalies or errors you may have overlooked or might not have found on your own. In the long run, you’ll be able to make timely tax filings and avoid any other last-minute scenarios that can end up costing more.

A good bookkeeper will also encourage you to separate your business and personal expenses, especially if you’re running a corporation or limited company. Depending on how much information needs to be kept separate, shared accounts can complicate the tax planning process and invite unwanted attention from the IRS.

HANDLING DEDUCTIONS

The efficient management of tax deductions is an essential part of the tax filing process. As such, bookkeepers help not only to identify but also to provide documentation support for qualifying tax-deductible business expenses. Only a professional bookkeeper with experience in your industry understands what qualifies to be deducted on your taxable income.

Your bookkeeper will also track your expenses at all times and provide timely solutions to address issues as they happen. That means you’ll have all the information at hand during tax season.

By helping to prepare for tax season, bookkeepers help to save businesses significant amounts of time. Your bookkeeper will ensure you have up to date financial records and that all your payments and receipts are handled on time.

This way, you won’t be updating your financial records at the last minute which guarantees that your business won’t fall behind on filing for taxes. And it goes without saying that filing your taxes late can be a costly affair.

BOTTOM LINE

Regardless of whether your business is a new venture or whether you’ve been in operation for a few years, you can’t afford not to have a bookkeeper. General bookkeepers can come in handy but if you want the full benefits of a seasoned expert, find one with a specialty or experience in your business model. This is essential to saving your business cash, eventually putting more profit into your pocket. Visit best bookkeeping firm in henderson NV.

A specialized bookkeeper will stay up to date on the most recent developments in the industry. They understand how all the critical factors like staff retention, attendance and usage rates affect your finances throughout the year. Read more…

TAX PLANNING: 5 CHALLENGES YOU NEED TO BE PREPARED FOR

 

Taxes are an essential part of running a business, working as an independent contractor, and being employed. While taxes may not be everyone’s favorite to-do item, preparing for tax planning as a small business doesn’t have to be stressful.

There are a few things you can do to set yourself up for a quick and easy tax season. No matter how you earn income or how complex your tax situation may be, this guide has a few easy tips to help make planning for taxes easier for your company.

Here’s your guide for everything you need to know about taxes for small businesses and how to prepare for your company’s taxes like a pro.

1. PREPARING FOR TAX PLANNING STARTS WITH ORGANIZATION

The key to staying on top of your taxes is being organized. Staying organized throughout the year will help you immensely when it comes to preparing your taxes.

If you’re missing items, unorganized, or failing to stay on top of deadlines, not only will you be stressed but you can also cost yourself a lot of money.

Start the year off right by keeping your tax documents organized throughout the year. Don’t leave all of your receipts, tax forms, and paperwork in a big pile until April 14th.

Stay on top of your document and paperwork right from the start. This might take a little more effort than just keeping a pile as well. The more organized you can keep your documents, the better equipped you’ll be to back up your itemized deductions and file on time.

Keep it simple by taking photos of receipts or documents on your phone. You can keep them in a digital folder in addition to a drawer or organization folder at your office or home.

While there is no need to spend hours each day organizing your files, just a few minutes every week will save you a lot of time come April.

2. STAYING AHEAD OF YOUR BUSINESS TAXES

Procrastination is a problem in any arena of life. Taxes shouldn’t be any different. Stay on top of tax season by literally staying on top of your taxes throughout the year.

People tend to want to put off things that aren’t pleasant or fun. Putting off your taxes, however, will only add to the unpleasantness. Not only will you run the risk of being late but you will also be more likely to make mistakes and miss deadlines.

Waiting too long to file your taxes just makes for more stress and more missing pieces. Staying organized might also make you dread tax timeless. The more you are prepared, the less likely you will be to procrastinate.

3. ADJUST YOUR WITHHOLDING

Do you give yourself a salary as a small business owner? Don’t forget to make adjustments for big life events such as marriages, childbirth, changes in your job, or even pay raises. The IRS website lists all of the qualifying life events to take note of for the salary you give to yourself.

Make sure you stay on top of adjustments when you need to make them. Your new little bundle of joy can bring a nice little bundle at tax time so file accordingly.

If you fail to properly account for life changes you may have the wrong amount of taxes withheld. This can result in a larger bill at tax time and potential penalties.

You also never want to overpay. While this is true in life in general, at tax time this is especially important. Overpaying means the government is making interest on your income instead of you being able to claim your money yourself.

4. CLAIM THOSE BUSINESS CREDITS, DEDUCTIONS, AND CARRYOVERS

When it comes to credits and deductions, make sure you double-check what you qualify for. Don’t assume your business isn’t eligible for a tax credit or deduction. Also never assume that you just don’t have enough deductions to itemize things.

At the front end of the year, take a look at potential deductions and then you will know what receipts or paperwork to keep throughout the year to back them up.

Remember to also keep track of carryover items. Often times, benefits can carry over into the following tax year. If you didn’t claim the entire credit and forget about them, you’ll lose this money.

Let’s say you had a capital loss over the deduction limit and you have an excess in charitable donations your company made. If you forget about this, that likely means you didn’t track the carryover amount and you didn’t claim it this year.

5. MISSING TAXES: TRACK CORPORATE PAYMENTS AND MISSING ITEMS

One problem many people run into at tax time is forgetting to report items. There is a lot that goes into preparing taxes for your business so this is an easy mistake to make.

If you receive a subsidy to help you pay for your company health insurance, for example, don’t forget that this subsidy is just an estimate made at the beginning of the year. If something changes during the year that alters your income or your qualifying status, you need to notify the health exchange to make the adjustments.

One of the most important things to remember when preparing taxes for small businesses is not to miss your payments and filing deadlines. Whether you are a large or small business, missing your payments can cost you a lot of money.

If you forget to make your payments or you make them late, you may face stiff penalties. Read more…..