Do I Need a Personal Accountant? A Guide for Small Business Owners

Most college kids don’t have assets to their name, nor do they have any income. However, people who are preparing to send their birdies flying off into the world of college need to make sure that their kids are financially “clean” and free of any burden. Most people don’t even know what can potentially hurt their kid’s chances of getting financial aid for college, which is why they need a personal accountant. All investments and income that comes from real estate Bookkeeping for Chiropractors will complicate tax filing. Therefore, a private accountant can help by making sure no deductions related to rental income are missed and that all landlord-related paperwork is filled and filed correctly.

When to hire an accountant

• Bookkeepers can manage many day-to-day financial tasks at a lower cost than accountants.
• But even for everyday life, a personal accountant can help turn your personal finance knowledge into action.
• Because a certified public accountant often can provide financial services beyond basic tax preparation, they may be more expensive than hiring a tax preparer to file basic taxes.
• It should also be noted that accounting software can save you hundreds, if not thousands, of dollars if you hand your accounts off to a third party for tax prep.
• These free programs are sponsored by the IRS and staffed by volunteers who are trained to provide basic tax-prep services to the public.
• One great example is FreshBooks, which makes double-entry bookkeeping simpler, faster, and easier to stay organized.
• Consider the word “double” in “double entry” to stand for “debit” and “credit.” The two totals for each must balance—otherwise, there is an error in the recording.

Dock David Treece is a former licensed investment advisor and member of the FINRA Small Firm Advisory Board. His focus is on breaking down complex financial topics so readers can make informed decisions. He has been featured by CNBC, Fox Business, Bloomberg, and MarketWatch.

Assessing the Financial Costs

Not only can they elevate your financial planning strategies, but they also save you from making mistakes that can alter the rest of your life. Unlike financial advisors, whose duty of care varies based on their licenses, CPAs are all generally considered to have a fiduciary duty to their clients. Whether someone is a high earner, a landlord, a retiree, or merely a person in a bit of a financial pickle, hiring a personal accountant seems like an excellent idea. Although it can be costly and even make a big dent in someone’s budget, if a person has found themselves in one of these ten situations, the cost of a personal accountant will be worth it.

Consequences of Making Poor Investment Decisions

This person may provide concierge services for your personal finances, including paying your bills, balancing your checkbook, and looking over your credit card statements. A bookkeeper can obtain certification from the American Institute of Professional Bookkeepers or National Association of Certified Public Bookkeepers. The hourly rate for a bookkeeper depends on where you are, what services you seek, and what expertise the person offers, but the fee averages to about $22 per hour. The blog articles on this website are provided for general educational and informational purposes only, and no content included is intended to be used as financial or legal advice.

As mentioned already, they not only look for tax deductions, but they can also help you not to spend on unnecessary things. And when your pool of cash is large enough, you can (again) turn to your personal accountant to help you invest it. Henn said he’s worked with many clients who feel funny about sharing their personal financial information with a tax preparer in their own town, so they work with someone in another city or state. “Because of technology like Skype and Zoom, secure portals, and electronic filing, you can work with accountants anywhere in the country,” he said. Whenever anything major changes up your financial situation, however, it might be time to search for professional help. “Changes in your situation might also be things you are not aware of,” explains Atiya Brown, CPA, “like tax law changes that impact your tax situation.”

• If someone needs several long sessions to understand tax in the first place, they might want to leave things in the hands of professionals.
• “A tax professional is there to help taxpayers easily navigate through the tax code,” Nayo Carter-Gray, an enrolled agent in Baltimore, Maryland, said in an email interview.
• However, it’s important to consider the financial costs, risks of miscommunication and dependency, and the potential for fraud or mismanagement.
• If you recoil at the thought of preparing your own tax return and wonder how you can find a good certified public accountant (CPA) or tax professional, you’re not alone.
• The first is that depending on the size of your business, it could be your largest regular expense.

Part 4: Getting Your Retirement Ready

Determining whether to hire a personal accountant is a critical decision for small business owners. By carefully assessing your financial complexity, expertise, and challenges, you can make an informed choice that will help your business thrive. Remember, a personal accountant can be a valuable partner in navigating the financial landscape and driving the long-term success of your enterprise. This depends greatly on the volume of accounting work your business requires.

Compare the costs to the value they can provide to your business. In addition to the complexity of your business’s finances, it’s essential to consider your own financial expertise and the time you have available to devote to financial management tasks. To be the best you can be at accounting, it’s important to use all the best tools at personal accountant your disposal. Try FreshBooks if you’re looking for a powerful yet easy-to-use solution for your accounting needs. Our cloud-based accounting software has all the features you need to handle your books, saving you time, money, and stress. Unlike some of the other accounting software on this list, Gusto is a more specialized program focusing mainly on payroll rather than accounting as a whole.

• Well, many people might actually be missing out on a lot of those because they don’t know about them.
• However, having one makes it easier to track your money and ensure that you’re making sound financial decisions.
• When you meet with a potential accountant, bring a copy of your most recent tax return.
• Software preparation tools may be faster, more efficient, and more convenient, as they can be used at your discretion.
• This team of experts helps Finance Strategists maintain the highest level of accuracy and professionalism possible.

And if you hire a CPA, they can even file business taxes on your behalf. Beyond that, how an accountant can help depends on your individual financial needs. Here are some details on which type of accountant is best for specific needs. Finally, a bookkeeper is someone who can help keep your books if you’re running a business.

Assists in Long-Term Financial Planning

They typically specialize in giving a client tax guidance and forming a strategic plan ahead of filing season. If a tax consultant offers filing services, be QuickBooks sure to vet their credentials and research whether or not they have unlimited representation rights before deciding if they’re the right fit for you. Fee-based investment advisors (a particular subset of financial advisors), however, are typically held to a fiduciary standard.