When people in Fairfax VA think of CPAs, they probably think of number-crunchers who work primarily from January to April preparing tax returns, who then fly off to fancy beach resorts to hide the rest of the year. It’s easy to think CPAs are like reverse teachers, taking off nine months out of the year. While this vision would apply to most franchise tax firms, it does not apply to public accounting firms.
So what does a public accounting firm do for the rest of the year?
In reality, certified public accountants are busy year-round. There are audits to conduct, financial statements to compile or review, routine bookkeeping tasks to complete, local taxing authority and payroll returns to prepare, and responding to the occasional IRS or state audits or “requests for information,” not to mention strategic planning and budgeting.
What does that look like?
FINANCIAL ADVISING AND CONSULTING
Having a financial expert in your corner is incredibly beneficial. Since most of life begins and ends with bills, taxes, purchases, financial contracts, etc., the term “show me the money” takes on exacting significance. Like a good family doctor helps keep your family healthy, a good CPA will help keep your financial health on track. Using their advice and services wisely can benefit you, your family, and your business now and in the future.
Any big life/business decision should start with talking to a CPA. Starting a business or non-profit? Working up contracts? Seeking strategic financial planning? What about your personal finances – do you need a prod in the right direction? What are the most tax-efficient methods for saving for retirement, college, large purchases, etc.? Certified public accountants can lead the way to financial prosperity and security.
The benefit of working with a CPA year-round also prepares you for the next tax season. Touching base before year-end affords one the opportunity to minimize tax liabilities before it’s too late to do anything more than clean-up and report what has already been done. And for tax entities or individuals with fluctuating income, coordinating estimated payments with your accountant is key for staying within budget while ensuring there isn’t an over/under payment of tax.
TAX SEASON EXTENSIONS
Nothing really ends on Tax Day. Many individuals, companies, and small business owners end up filing extensions for taxes. Tax extensions allow time to receive and organize financial information, play catch up, and fund retirement accounts before filing the actual return. (Note: it does not allow time for any tax liability to be paid.) An extension can definitely lighten the CPA’s load leading up to tax day, but it also means more work to complete during that nine-month vacation!
UNFILED TAXES AND AUDITS
It happens whether we like to admit it or not. Sometimes people or businesses just don’t file taxes. Playing catch up can be stressful, as the tax laws change from year to year. There is also the looming threat of the IRS. Often an audit, or request for information is just a random occurrence, but there are some triggers that can make one more likely to be subject to closer scrutiny. CPAs are invaluable for filing back-taxes and responding to the IRS. They know tax law, and how to get you caught up and in compliance. Inconsistencies or errors may need to be corrected. Missing documents need to be located. Ensuring you don’t pay more than required is crucial.
Accounting and financial planning is a critical part of any individual’s or business’s day-to-day activity. While you may only think to call upon a CPA’s experience during tax season, having a financial consultant in your corner year-round is a sound investment.