Many people hire a CPA to help them with personal or business finance issues. You may wonder, though, why you should hire one. Let's take a look at four reasons you should meet with a CPA.
Organizing Your Finances
Individuals and companies can benefit from imposing some structure on their finances. For example, someone who is trying to wrangle their personal finances might ask an accountant for help making a budget. Businesses also seek out help with balancing their books, producing reports, and making financial plans. Even if you're very good at these things, it can help to get some outside perspective.
Every year, thousands of pages of new laws are implemented at the local, state, and federal levels. It's a full-time job to keep up with the changes, and that's a big part of what a CPA does for their clients. You need to have someone who keeps an eye on these issues, and an accountant will warn you when it's time to make appropriate adjustments to stay compliant.
Complicated Income Streams
It's especially wise to work with a CPA when you have multiple income streams that get a little complicated. For example, someone might have rental properties set up in a trust for tax purposes. It's important to make sure this is the optimal configuration.
This sort of issue can get more complex as your personal finances start to look like a business, too. With the help of an accountant, you may even decide to set up a corporation just to get all of the complex dealings under one roof.
Trying to Reduce Audit Risks
Government agencies can and do audit personal and business finances if they think they might recover more tax revenues. Notably, these agencies tend to target folks who use certain structures. For example, using a cash accounting system rather than accrual can make a business look like a money-laundering front. The same goes for companies that use the wrong forms or don't fill things out the right way.
To put it bluntly, not everyone is great with numbers, and that's okay. It takes all types to make the world go round, and some folks can benefit from having a numerate professional help them understand what the numbers mean. It's better to shell out a little money to make sure you're getting the math right than to risk creating trouble if you mess something up.
For more information, reach out to a CPA.