It’s said a good CPA will save you money. That it’s better to pay a little up front than a lot later on. The constant question people ask is, “Do I need a CPA?”
Lionel Messi is being prosecuted for fraud by the Spanish government for allegedly concealing the extent of his real earnings, resulting in $5.3 million in back taxes.
“We have never committed any infringement,” Messi said on his Facebook account. “We have always fulfilled all our tax obligations, following the advice of our tax consultants.”
Sound familiar? Lionel isn’t the first star to be in tax trouble- just ask Pete Rose, Lawrence Taylor, Al Capone, Nicolas Cage, OJ Simpson (what laws did he ever follow?) or Pamela Anderson their thoughts on tax law. Better yet: ask your CPA. Which brings us back to the point- Do I need a CPA?
The truest and most frustrating responses happen to be one and the same: “It depends.” There are infinite scenarios out there and while yours can be similar to another taxpayer’s, they will never be the same. Two taxpayers may be in a similar situation this year, but they will always be in slightly and most often completely different situations in five or ten years.
CPAs offer more than tax preparation services. Anyone can drop numbers into software. However, a good CPA will analyze your situation to look for tax saving opportunities and help you plan for next year, and a great CPA will go as far as altering your situation moving forward to ensure everything is being conducted in the most tax advantageous fashion. I had a client who would have been subject to taxation and filing requirements in New York State and New York City in 2012 had we not modified the entity structure and operating agreements, which in turn reduced the overall tax liabilities, filing requirements and cost of tax compliance.
Do I need a CPA?
It depends. It always depends. I’ve seen difficult returns prepared by non-CPAs, whether by themselves or using a general tax service. Oftentimes the returns are not correct, but they get filed nonetheless. At the end of the day it’s a gamble and the complexity of the return dictates the odds of the hand you are playing.
The U.S. Tax Code reached a whopping total of 73,608 pages in 2012. It’s not getting any shorter either. If you have questions about your taxes, about your entity structure, about where things are going and how you can best plan to get there, talk to a CPA. A CPA isn’t needed for everyone but the only way to find out is by talking to one in the first place. Just make sure they will give it to you straight, are honest and are damn good at what they do because even hiring a CPA can’t always ensure that you will be filing within the good graces of the tax authorities…. Just ask Lionel Messi.
For help finding a CPA, go to the AICPA’s 360taxes.org, which offers tax resources, tips, FAQs, checklists and much more or PICK UP THE PHONE and call our office at (415) 974-6000- We’re happy to help… May through December 😉