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Year End Tax Planning with an Expert
This entry was posted on 10/25/2008 6:57 AM and is filed under Tax.
Question: The year is coming to a close and my husband and I have been advised to visit with a professional tax preparer before the close of the year. We have been using a computer software program in past years but feel we may have not taken advantage that an expert offers. What would you suggest?
Answer: Computer software packages have made it easier to monitor cash flow, prepare tax returns, and handle other financial reporting tasks. Still, keeping up with these chores as your personal and business needs grow consumes an increasingly large chunk of precious time, and risks potentially costly mistakes. That's why many people look to outside financial specialists for help.
Choosing the right type of tax, accounting, bookkeeping or other financial help is an important decision. An outside accountant can be one of your most trusted advisors and a key to your success.
Accounting services differ from bookkeeping services, however. An accounting firm prepares financial statements and tax returns based on the numbers that you give them via your own in-house books. Bookkeeping services, if offered, will be extra. If you plan to hire your own bookkeeper, make sure the person you choose is qualified. One way is to use the "Bookkeepers Hiring Test" available free from the American Institute of Professional Bookkeepers at their Web site, www.aipb.org
Before selecting a certified public accountant (CPA) or other financial pro, list the services you think you need, such as tax preparation, financial reports, balance sheets, invoicing, payroll services, general bookkeeping or someone to set up your books. Some firms may handle it all, or you may need to split the tasks. CPA Directory is a huge online listing of CPAs nationwide and can help you find an accountant in your area. The Web site also offers helpful advice on hiring and working effectively with a CPA. Visit www.cpadirectory.com
Enrolled Agents (EAs), who are licensed by the Federal government to prepare tax returns should be considered. They have either worked for the IRS or have passed a rigorous IRS exam. EAs are savvy tax experts, but generally don't have the degrees of CPAs and tend to charge less. Visit the National Association of Enrolled Agents Web site at www.naea.org
Accountants' fees vary depending on location and the types of services you require. Some firms will offer to handle a specific range of services for a flat rate, and charge less for bookkeeping and other tasks that don't require CPA-level training. If you feel your business requires the assistance of a larger accounting firm, find out which staff members you will be working with to make sure their experience and personalities match your needs.
Two free seminars are are being offered before year-end. On December 6, 2008 a seminar will cover personal taxes and on December 13th, 2008 a seminar will cover business taxes. Both will be held at the Richmondtown Library, 200 Clarke Ave., Staten Island, NY from 10:00 AM to Noon. For reservations call the library - 718 668-0413.
SCORE volunteers will be glad to direct you to the best source of service and information you may require. SCORE is a nonprofit organization of more than 10,500 volunteer business counselors who provide free, confidential business counseling and training workshops to small business owners. Call 1-718 727 1221 for the SCORE chapter on Staten Island nearest you, or find a counselor online at www.score476.org Other City and State offices can be located at www.score.org
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