What comes into your mind when you think of CPAs (Certified Public Accountants)?
Some one plugs numbers into a tax software and spit out the returns?
Necessary evil during tax season?
Necessary evil for business?
All CPAs are the same, I will use the one who charges the least?
“Free” advice should come with preparing returns?
Same as Enrolled Agents (what are Enrolled Agents?)
To become a Certified Public Accountant (CPA), one needs to have certain number of years of accounting education, pass a uniform exam, and in some states (varied) work for accounting firms/companies for several years to gain the experience before being certified as a public accountant. It is not a piece of cake.
Do you want your children to grow up to be CPAs?
Do you respect CPAs?
My mom was an accountant who worked for public schools. It is a profession that requires hard work and discipline. Professional CPA jobs come with “little recognition” and just “Okay” pay (unless you are a Chief Financial Officer).
CPAs could make a huge difference in your tax return results, more so for self-employed professionals and/or companies, such as:
- Maintaining accounting records to accurately calculate business profits or losses
- Managing Accounts Payable (pay your vendors)
- Managing employee payroll
- Managing Accounts Receivable (know the amount of receivables from your customers)
- Identifying eligible tax deductions
- tax planning
CPAs are an integral part of business operations – usually they are first ones to hire and last ones to fire. Unlike sales people who bring in customers, CPA’s start by working with “what’s already there” and at times, since nothing can be improved or planned, it appears what they do makes little difference. If you go for a dental cleaning and check up, and your dentist doesn’t find any cavities, do you think your dentist does nothing? Do you not want to pay him/her for his/her time and examination?
Do you think a CPA does better job if he/she gets you more refunds than another tax preparer? Do you consider a CPA does a poor job if you owe taxes? Do you know fundamentally the amounts of refunds and/or taxes owed are due to the estimated taxes you paid through the tax year or the taxes withheld from your paychecks? Do you know that the amount of refunds/or owed taxes also reflects your unique tax situation (for example: number of dependents, filling status to name a few)?
Do you know that CPA’s are not Enrolled Agents (EA)? EA’s are registered with the IRS, but do not have the same (not as strict) education and examination requirements, or most importantly experience as CPA’s. Do you still think CPAs are the same as EAs?
Do you believe that the CPA preparing your tax returns is obligated to advise you about tax planning opportunities without charging a fee? If they charge you a fee for advising you about possible tax deductions, would you feel that the fee is not justified? Where is the line for charging fees and how much? Would you rather your CPA just not tell you to not “ruin” your working relationship?
Do you consider it’s fair for you to drop off your tax documents on April 1st and expect your returns to be filed by the 15th? When do you think CPAs should charge expediting fees? Is it equitable? Yes, you could file extensions but I, for one, have rarely done that in my more than two decades of professional life as a CPA.
What is the ideal profile of your CPA? Since you are required by laws to file your returns; therefore, you want to pay as less as possible disregard the time your CPA put in?
If I don’t have to pay tax software company for the software, rental for office, utilities, phones and raise my child, I guess I could just charge for a couple of hundred dollars. But, I am like you and everyone else, I work hard and would very much appreciate that I don’t have to worry about getting paid and getting paid fairly. Although my parents have never asked me to pay for the tuition that they put me through private college and MBA programs (and room and board), I do want to send my child to college without having to ask her to take a huge student loan or dipping into my retirement savings (yes, note to myself to contribute more if possible).
CPAs are just like the person you looked at the mirror, or the neighbors live next door after all.
To the best of my knowledge and effort, I wrote this article in general terms as each person’s situation varies. Tax laws do change from time to time. No guarantee is made or claimed through this article. Personalized advice is recommended to consult’s one’s own advisor or contact the author.