Showing posts with label hiring a tax professional. Show all posts
Showing posts with label hiring a tax professional. Show all posts

Friday, February 9, 2018

Not All Tax Professionals are Created Equal

When you first consider hiring a tax professional for business or personal use, it can be confusing to sort through all of the different terms that exist.   



Three terms that you’ll probably hear a lot are “bookkeeper,” “accountant,” and “CPA.” It is important to note that, though it doesn’t always seem like it, each of these terms denotes a very different job, and it’s important that you hire the right one for your specific purposes.

Bookkeepers

Bookkeepers are typically hired for business purposes. Their job is literally to “keep” or maintain the books and financial records of their clients in order.

Modern day bookkeepers often use specialty software to make their jobs easier, and they are definitely tasked with a lot of jobs. These include recording transactions- both ingoing and outgoing, inventory management, and generating financial reports as required by the business structure.

Accountants

Accountants are different from bookkeepers in that they do a whole lot more. They sometimes do bookkeeping tasks and additional tasks, or they may do only the “additional” part.

Their main job is to prepare financial statements, prepare reports, and basically keep the business’s finances on track. It is important to understand, however, that accountants cannot sign tax returns or represent their clients in the event of an audit.

CPAs

The most prestigious job in this industry is that of a CPA. These professionals are accountants with additional qualifications who are certified by the state to perform their duties.

They do everything an accountant would do, but they also prepare tax returns and, unlike accountants, can represent their clients during an audit and sign tax returns.


As you can see, there are big differences between the different types of financial professionals, and only you can decide which option is the best fit for you and your business or for your own personal needs. With that said, though, most people will find that hiring a CPA, who can do absolutely everything they might need, is the best option. The choice, however, is yours.