People frequently are confused about the difference between a CPA and an accountant. Aren’t both of them the same thing? They both perform accounting tasks, don’t they? They do, but at Pairett CPA we know there is a difference, which is why we employ both.
A CPA and an accountant can both perform accounting tasks. However, the difference between the two is important, particularly if you are a business owner, whether large or small. Both an accountant and a CPA take similar courses of studies in college such as accounting, finance, business statistics and analysis. It’s what happens after they graduate that makes the difference.
The Difference Starts with Experience
When someone with a degree in accounting or a similar field graduates from college, they typically get jobs entering accounting data, performing bookkeeping duties, and handling simple tax-related matters. A graduate that is planning on sitting for the CPA exam works in these positions for one to two years, depending on the state in which they live. After this initial experience, they sit for the CPA exam. When the graduate passes the four-part exam, they are certified to perform basic accounting. Plus, they can also help with auditing, personal financial planning, taxes and business valuations.
Preparing Your Personal Taxes with a CPA
If you itemize, own property or have investments you should probably have a CPA do your taxes. Sure, it will cost a little more. Unfortunately, most people don’t get all of the deductions they could claim. As an added bonus, they can represent you if you are subject to an IRS audit.
If you have simple taxes with a W-2 and no itemized deductions you may not need a CPA. However, don’t discount the value of one. Each year the government offers hundreds of tax deductions and credits. Even if you have a simple tax case, you might be eligible for some of these tax reductions. That doesn’t do you any good, if you aren’t aware that they exist. So you don’t claim them and you pay more in taxes than you need to.
Taking Out a Loan
There are times in your life you will need a loan, whether it is for home improvements, a car, unexpected personal expenses or assets for your business. Though you obtain the loan from a bank or other lender, they can’t tell if simply taking a loan is best for your financial health.
A CPA can, and will examine your finances and help you determine your needs and how best to finance your future purchase.
Advantages for Your Business
If you own a business or are planning to start one, working with a CPA can be one of your smartest moves. However, if you already have a business, you’ll need a CPA when it comes time to file numerous documents. This includes annual statements, taxes and other financial disclosures that may be required by the business sector to which you belong.
If you don’t yet have a business but would like to start one, seeking the advice of a CPA can save you money. Aside from helping you navigate the regulatory requirements for starting your business, an accountant can guide you in other ways. They can help you determine which type of corporation is best for your new business. They can also and help you form a business plan which will help you when you go to get the loan to start the business. A sound business plan is a plus from a lender’s standpoint. A CPA will also look at your finances to help you determine exactly what you need financially to start your business and can also help you with a budget to follow once you do.
A CPA from Pariett CPA will be able to perform all of the above tasks and more. We will assist you in getting your tax ID from the IRS and ensure you file under the correct state tax ID number. This is required if your business involves state sales or other taxes. Once we determine what type in business incorporation is best for you, we will help you file the articles of incorporation so you can get your business underway.
File Your Business Taxes
Now that you’ve started your business, it’s that time again – tax time. Yes, you can do your taxes yourself, but there are advantages to having a CPA perform that task. For one thing, they will be more familiar with the various tax credits and deductions offered during that tax year. They will spot expenses that you may not realize you can take as deductions. If you’re nervous about that because of the stories you’ve read in the paper, don’t be. The CPA will also represent you if you get audited.
If you are interested learning more about our CPA services, please contact Pariett CPA at (940) 498-7422.