Have a Question about Working with Accountants?

FAQ-photoIf you have questions, we have answers. At least to the most frequently asked questions we've received. And if you have a question that's not answered on our website, we encourage you to contact us.

Q. What is a CPA?

A. A Certified Public Accountant is an individual who has graduated from an accredited college or university with a degree in accounting, has had several years of on-the-job experience as an accountant, and then has taken required courses and successfully passed state certification for a CPA designation.

To be more specific, becoming a CPA now starts with a five-year college degree, followed by successfully completing a two-day, four-part exam. And if you don't pass that exam, you get to take it over. Then there's a one-year internship before you can apply for a state license. Oh, and once you are a CPA, you'll need to take 40 hours of continuing education annually to keep up your license.

In addition, a CPA is required to follow a code of ethics. Say you'd prefer to be doing business elsewhere, and you request that your financial papers be returned to you. Whether or not you owe your CPA any fees, your CPA must give you back your papers.

Q. What is a CVA?

A. The Certified Valuation Specialist designation means that a CPA has successfully completed the rigorous training and testing process of the National Association of Certified Valuation Analysts (NACVA) for providing business evaluation services.

Q. How do I select a CPA?

A. Interview your prospective CPA much like you would a new employee. Ask questions about the firm, billing rates and methods, who will be handling your account, what records will be required to begin service, and any other area of concern to you. Ask for a reference or two. See several firms before making a decision. Base your selection on how well you feel you can communicate with the firm or the CPA, because if you aren't comfortable discussing your affairs with them, you won't get the benefits you should.

Q. Why is it important for a CPA or CPA firm to have a review process in place when preparing my tax return?

Accuracy means everything when it comes to correctly preparing your tax return. Most accounting firms and many CPA firms do not have a review process in place to verify that all numbers are correct. By a review process, we're referring to a procedure that checks your tax return for accuracy in not only making sure the numbers are added or subtracted correctly, but that the right numbers are entered on the right lines and that questions regarding your tax situation were answered properly. Making just one mistake can result in an overpayment, or worse, another error that may lead to a notice from the state or federal government.

Q. How secure are my files if they're stored electronically?

Having digital client files stored in the Cloud actually keeps them more secure for our clients. Our software provider, Thomson Reuters, is one of the largest software, tax and research companies in the world and certifies our data as being secure.

Q. What if I get a notice from the IRS or the state that says I owe money for taxes or a fine?

A. Many notices from taxing agencies are poorly worded and difficult to understand. If you get a communication from the IRS or the state, you should mail or fax a copy of it to your CPA immediately. They can review it and let you know if you should pay the amount requested, or if sending some additional information will satisfy the question. In most cases, a letter from your CPA will answer their question, and no additional payment will be required.

Q. What if I can't pay my taxes? (Part 1)

A. It can happen! You've got a tax return with a balance due and the resources available are not sufficient to cover it. The most important thing to remember is to sign and mail the return ON TIME, even if you can't pay anything at all. The penalties for NOT FILING timely are much greater than the penalties for NOT PAYING timely!! Don't double or triple your additional liability. Send the return and any amount you can afford to pay, on or before the due date of the return.

Q. What if I can't pay my taxes? (Part 2)

A. After filing, you will get a bill from the taxing agency showing their receipt of your return, the payment you sent and the balance due. If you can, pay the balance at that time. If not, call the number on the notice and you can set up a payment plan for the balance due. If you work with them, the IRS and the state will be glad to help you make this arrangement, and your good credit will remain intact.

Q. Can a CPA help me if I owe back taxes?

A. Your CPA can become your representative and negotiate with the taxing agency involved to set up a payment plan, or prepare an offer in compromise in special situations. If there are significant back taxes due, the negotiations are critical in arriving at the best solution for you. Don't hesitate to contact a CPA if you are in this situation. Their expertise in dealing with tax problems can help you resolve your situation in a most efficient manner.

Q. What can a business consultant do for me?

A. A business consultant reviews financial and operational information as an objective outside party. With their education and experience, a consultant uses observation, analysis and discussions with business owners and staff to identify problem areas and business opportunities. Then a consultant will propose possible solutions to management for review and implementation to increase efficiency, improve the opportunity for success, and ultimately, impact the income and quality of life of the business.

Q. Why do I need a CPA and not just a bookkeeping service?

A. Anyone who learned debits and credits in high school accounting can post your business information into a ledger or computer program and present you with a financial statement. Will it be accurate? Will it provide insight into your operation? Will you have a tax plan in place? Will there be a discussion about possible problem areas and concerns? These questions can't be answered by bookkeeping alone. However, your CPA can provide you with the tools you need to grow your business.

Q. How can tax planning help me?

A. If you've ever been presented with a tax return that had a significant balance due, and you were surprised, shocked or dumbfounded, then tax planning could have helped you! Discussing your tax situation BEFORE the end of the year is the best way to keep your tax bite to a minimum. Your CPA can review the figures and make recommendations that you can choose to implement in order to bring your tax bill into the “normal" realm. Working together, you and your CPA can turn tax problems into solutions.