Most people file their own taxes every year, but more than 20 million adults seek professional help with the annual chore. Besides tax forms, a growing number of individuals and business owners are opting to hire financial professionals to deal with issues like retirement planning, buying a home, figuring the tax on life insurance settlement payouts and more. What are the most common reasons, besides personal tax filing, for hiring a certified public accountant, enrolled tax agent or financial planner? Here are the top five:
Filing Tax Returns for a Small Business
Doing your own family’s tax return is one thing, but preparing federal returns for a business can be a highly complex task. That’s one reason that the vast majority of income for small CPA firms comes from business clients who need to file quarterly returns. If you own a small business, especially one that has employees, it’s usually to your advantage to spend the money on a CPA’s services. Not only will you reduce the chances of being audited, but you’ll have the peace of mind that comes with knowing your quarterly business return was filed correctly.
Forming a Corporation
When businesses grow from the sole proprietorship phase and begin to generate more income, the owners often decide that it’s time to form a corporation. Incorporating has multiple advantages for owners who want to protect their personal assets from lawsuits and who want to eventually offer shares of stock to investors. This step usually involves hiring both an attorney who specializes in business matters and a CPA who regularly does corporate formations. Unless you are an attorney or a CPA yourself, there’s really no substitute for professional help at this stage of the game.
When bad things happen on the financial front, you’ll first need to speak with a bankruptcy attorney for a consultation. From there, you have many options. If your case is simple, you can file it yourself in many states. Or you can hire a paralegal, CPA, or someone you trust to do the filing. Bankruptcy is essentially a legal matter, but CPAs often get involved in cases when law firms need help estimating the value of high-priced assets like equipment and real estate.
Forming a Non-profit
Every state has its own laws about how to form a non-profit corporation, but you’ll also need to file a federal application that is uniform for every state. The paperwork is daunting, to say the least, and most people who form non-profits opt for help from lawyers, paralegals or CPAs, all of whom are well-equipped to navigate through the paperwork and separate deadlines for filing various documents.
Estate planning is the province of both the legal and the accounting profession. If you want to begin building a simple estate plan, it’s essential to get expert guidance. Many CPAs and lawyers specialize in estate planning, and the two professions have a lot of overlap when it comes to making long-term plans that are legally and financially sound.