Every company, no matter however small, requires the services of a financial and tax counsel. However, a CPA (Certified Public Accountant), is not just an accountant but much more and is required for your company.
What is the difference between a certified public accountant Pasadena and an accountant? Pacific Accounting Group can offer various accounting-related services for executives, business owners, and independent professionals.
What is a CPA?
A CPA is a tax specialist that can prepare your tax returns for the company, answers crucial financial questions, and even save you money. CPAs have accounting degrees, but their certification is not the same as that of traditional accountants.
CPAs have completed the Uniform CPA Exam, which is a difficult exam that assesses the knowledge of tax law and normal accounting practices, as well as a state license that includes ethical criteria.
To keep their license, they must complete professional education courses, and they risk losing it if they are ever convicted of fraud, ethics offences, or negligence. In addition, CPAs have unrestricted representation powers with the IRS to bargain on your behalf.
What is an accountant?
A person who works in the field of accounting, compiling and auditing financial statements, as well as bookkeeping and financial analysis is an accountant. An accountant can also prepare tax returns and provide tax advice.
Accountants are not required to take any licensing exam and are not required to be licensed by any state. They do not have any requirements for ongoing education.
When should you hire a CPA?
To profit from the knowledge of a CPA of the various ins and outs of corporate finance, you do not have to hire any CPA as a full-time/part-time employee and many can offer their services only as consultants. You should hire a CPA in the following situations:
1. Before starting your business
A CPA can assist you in forming your company so that you do not make costly blunders. When you are starting a new business and your money is tight, spending hundreds of dollars on a CPA for a few hours may also seem excessive.
2. During tax time
CPAs can help you prepare tax records, file tax returns, and plan ways to reduce your tax liability in the coming year. CPAs can also represent you in case the IRS questions your return or in case you or your company is audited, which is a significant issue.
3. Under special circumstances
There may be times when you require the assistance of a CPA as you manage your business. You should engage a CPA for representing you if you ever receive any letter from the IRS telling you that you are being audited, or it simply seeks extra information about your return.
4. When you merge, acquire, sell, or close
When making major structural/operational changes to your company, such as buying a company, planning to sell/close your company, merging with another company, or deciding to take on any new partner or you want to dissolve a partnership, then you must consult a CPA regarding your tax implications for the company and yourself.