Q: What services should my CPA firm provide?

A:  Your CPA firm should assist you with the following services:

• Preparation of accurate and timely Statement of Revenue & Expenses (a.k.a. Profit and Loss Statement)
• Revisions of Quarterly Estimated Tax Vouchers (1040ES)
• Ongoing tax planning throughout the year
• Consultation throughout the year related to your unique accounting and tax situation
• Account reconciliations
• Sales tax filings
• Personal, corporate, partnership and business property tax returns
• Other miscellaneous form preparation (e.g., Forms W3/W2, Forms 1096/1099, etc.)
• Estimation of taxes due for a specified period of time
• Audit representation before taxing entities

Q: How often should I communicate with my CPA?

A:  You should communicate with your CPA throughout the year. It is very important that you and your CPA are on the same page because what is happening with your business AND your personal life (getting married, having children, buying or selling a home, getting a divorce, and so on) will directly impact your tax liability at the end of the year.

Q: How long should it take for my CPA to return my calls?

A:  Your CPA should return your calls within one business day at a minimum, with no exceptions (yes, even during tax season).

Q: How often should my CPA revise my IRS Quarterly Estimated Payment Vouchers?

A:  Your CPA should revise your four quarterly estimated payment vouchers throughout the year. It is important they are reviewed and revised throughout the year to match your business and personal activity so you do not pay too little or too much in quarterly payments. If your balance is more than $1,000 at the end of the year, you will likely have to pay interest and penalties for not making large enough quarterly payments throughout the year.

Q: What type of relationship should I have with my CPA?

A:  You should have a close relationship with your CPA. Again, what is happening with your business AND your personal life typically will directly impact your tax liability at the end of the year. Your CPA needs to be kept in the loop.

Q: How should my CPA base their fees for the services they provide?

A:  Your CPA should be billing you on a flat-fee, “by-the-job” basis, whether it is for accounting-related services or tax preparation. If your CPA charges by the hour, then they need to give you a VERY accurate estimate of how much time is involved and the hourly rate. You should not be surprised by your CPA’s fees.

Q: Why am I always surprised when I talk to my CPA? I don’t like surprises!

A:  Many business owners are surprised by the amount of taxes they owe, the amount of their invoice for services provided, and the amount of time that passed prior to receiving their completed tax returns. A strong relationship and good regular communication with your CPA are key to avoiding those unwelcome surprises.

Q: Why does my CPA force/want/expect me to use QuickBooks?

A:  Your CPA probably has a QuickBooks business model. This business model dictates that the client spends anywhere from 10 to 40+ hours each month using the software by attempting to take their “best guess” at where transactions need to be classified. Most users of the software do not have an education in accounting, so their “best guess” is usually wrong. That’s where the CPA gets involved. The CPA will charge anywhere from $100 to $300+ per hour to fix your “best guesses.” So not only have you spent your time working on something that is ultimately incorrect, but you also have to pay someone to fix something you spent your time and energy working on. Among other services we provide, we offer a cost-effective alternative to this QuickBooks business model.

Q: Why shouldn’t I have a CPA who is my mother/cousin/brother-in-law/best friend handle my accounting and tax reporting?

A:  From what I have seen with the clients I have acquired, the level of service will typically suffer as a result of the relationship. The family member can bend the relationship they have with you in ways that would not be possible with a non-family member client. For example, “We can file an extension for Uncle Tim. He’ll understand that I am super-busy this time of the year.” Meanwhile, Uncle Tim hasn’t seen a financial statement in months and needs his tax return ASAP so he can get financing on a home he wants to buy. I have run across many scenarios where the family member is WAY behind on the accounting and tax reporting services they agreed to provide to the other family member. This can create some serious issues for the business and for the family. I have also met many clients who prefer to keep all of their business and personal information out of the hands of another family member.

Q: How long should it take for my CPA to prepare my BUSINESS tax returns?

A:  This is a tricky one! It depends on how quickly you can respond to requests for additional information. The bottom line is it should take a “reasonable” amount of time, defined as agreed upon between you and your CPA.

Q: How long should it take for my CPA to prepare my PERSONAL tax returns?

A:  Again, another tricky question! It depends on how much more info your CPA will need to complete your return and how quickly you can respond to requests for additional information. Personal returns are typically completed after a business returns. In many instances, the info from your business return must be represented on your personal return. The bottom line is, again, expect a reasonable amount of time that is agreed upon between you and your CPA.

Q: What is a CPA, anyway?

A:  This title stands for “Certified Public Accountant.” In the state of Texas, you first must have a Bachelor’s degree and 150 college credit hours, with a certain amount of college credit hours in accounting/taxation, before you can sit for the Uniform CPA Exam. The exam rate now has a 30% initial pass rate, and topics on the exam include federal business law, auditing, financial accounting, governmental accounting, individual taxation, corporate taxation, and economics. After passing the exam, you must work under another CPA for a minimum of two years. When this requirement has been met, along with taking an ethics course as well as fulfilling some other requirements, you will be issued a state license to practice accounting. Texas CPAs take 40 hours of continued education related to topics on accounting and taxation each year. It is a lifetime commitment to maintain a CPA license.

Q: Is my “CPA” really a CPA?

A:  There are business owners out there who certainly try to make their business look like a CPA firm. Many of them use “…& Associates,” without the words “CPAs” in their business name and offer “financial services.” Bottom line: ask for clarification about who you are working with and understand the difference between a CPA and an unlicensed tax preparer/bookkeeper.

Q: What is the best time to start working with a CPA?

A:  Your relationship with a CPA should begin before you ever start a business. There are so many things to consider when starting up a business, and a CPA can help you navigate through the accounting and tax issues that will arise for your unique situation. It is very important to have a strong foundation from the beginning and to get started correctly, thereby avoiding costly mistakes. Too many business owners have suffered from poor planning at the inception of their business, only to have those errors come back to haunt them when they become successful.

Q: What makes the Blaine Gary, CPA Firm different from other local firms?

A:  That’s easy: our relationships with our clients and our customer service! We have close relationships with our clients. Again, what is happening with your business AND your personal life will typically have a direct impact on your tax liability at the end of the year. The best way to be kept in the loop with a client is to have a close relationship with clear, regular communications. Customer service seems to be a lost art among professionals, from doctors and attorneys to CPAs. We see this as an opportunity to add value where other firms do not. We return client phone calls within one business day. Nearly all of our fees are flat, fixed amounts, and we consult with you throughout the year regarding your unique tax and accounting situation.

Q: What is a “tax planning strategy,” anyway?

A:  This is a strategy to reduce your tax liability. Often, a CPA can make suggestions to legitimately reduce your tax liability by looking for more deductions, considering different ways of being taxed, evaluating methods of purchasing assets, and so on. It is very difficult, if not impossible, to provide this service to a client after the tax year is over. Ongoing communication throughout the year is key to creating a tax planning strategy for your unique tax and accounting situation.

For additional information or to request a free, no-pressure, no-obligation, informative evaluation of your tax and accounting needs, call: 512.459.8888