First up, what is a CPA and why do I need one?
CPA stands for certified professional accountant. The key here is “certified;” this means that there is a governing body that maintains standards that individuals who want to be CPAs must meet. To become a licensed CPA there are education requirements, standard accounting tests that must be passed, and an “apprenticeship” period where one must work under a CPA doing specific tasks. There is also a continuing education piece once you become a licensed CPA.
In Virginia the governing body is the Virginia Board of Accountancy and they set the rules for the state. Here you need to have a Bachelor’s degree (or higher) with 150 credit hours of college work. Once you have completed your degree and at least 120 hours you are eligible to sit for the Uniform CPA Exam. There are several parts to the CPA exam, all of which must be passed before you gain licensure. Next is the work experience or “apprenticeship” piece of the puzzle. Virginia requires an ethics course be taken and also specifies the type of work that must be done, who can supervise, etc. during the apprenticeship and requires it to be a paid position for a year (2,000 hours). After all that is completed you can apply for your CPA license. Once you are fully licensed you are required to complete continuing education classes yearly.
As you can see it’s not an easy task to become a CPA but that’s because a CPA has to have a broad base of knowledge. They need to know accounting and tax rules that affect both businesses and individuals including tax preparation, financial statements, financial planning, and much more. A CPA’s primary function is to help businesses thrive and keep everyone on the right side of the tax man.
So why would you need a CPA? The short, easy answer is because you don’t know what you don’t know. Whether you’re an individual or a small/medium size business you can probably gain some knowledge from utilizing a CPA. If you’re an individual a CPA will help you with your taxes. If your income is pretty straight forward, W-4 and some interest, and not much else you probably don’t need to see a CPA. If your financial life is a bit more complicated then seeing a CPA might help you save money or keep you out of trouble with the IRS. With all the changes in the tax law last year seeing a CPA for some tax planning now would be a good idea even if you don’t think the changes affect you. Again, what you don’t know could be a problem.
If you are a new business just starting out an initial visit with a CPA can help you set up your business type correctly in the beginning and start you off on the right foot. A CPA can help with taxes and tax planning, bookkeeping, accounting, and more. They also have connections to other professionals who can help you – lawyers, financial planners, bankers, etc. If you are a more established business and/or have your own bookkeeper, you may need fewer services but a checkup with a CPA is always a good idea. It will help keep your books in order to facilitate end of year planning and completion of your taxes. If you need to talk to a banker they like to see financial statements on your business and a CPA can help you pull those together. As a small business owner it’s always good to have another set of experienced eyes take a look at what is going on financially with your company. Again, what you don’t know can hurt you and a good CPA knows the questions to ask.
At LeMay & Company we can help with individual tax planning and basic financial planning; for a more in depth review of your finances we can refer you to a financial planner. We can ask questions, probe for details that you didn’t think were important but which turn out to be very much so. For businesses we offer bookkeeping and accounting services, tax and financial planning and again we will refer you to other professionals when needed. When you work with us you can choose the services you need, adding and subtracting as your needs change.
The preceding article is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that LeMay & Company is not engaged in rendering legal, investment, insurance or other expert advice in these areas. If expert assistance is required, the services of a competent professional should be sought. The views and conclusions expressed herein are those of the writer and not necessarily those of LeMay & Company. Any tax advice contained herein is not intended to be used, nor may it be relied upon or used; by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending another party any tax transaction or tax-related matters that may be addressed herein.