This may seem like a funny question for a tax preparing CPA firm to answer, but the truth is we get it all the time. Clearly, we have a vested interest in the answer is yes you do. But, part of our commitment to client service is to help prospects and clients know when they do NOT need our services.
If you have a simple tax situation, you work at one job for which you receive a W2, you don’t have kids and you don’t own a house, there are low cost, even free, options available to you. In this case, you likely don’t need an accountant’s help.
However, life and taxes are often more complex or become more complex over time. There is no hard and fast rule as to whether or not you need an accountant, but here are some guidelines that we hope will help.
If you are interested in discussing your situation, reach out to us here and we can discuss your situation.
Really the need for an accountant depends on your knowledge, interest, and the complexity of your situation. The advantages of working with an accountant are:
As your tax situation evolves you may find it taking up ever more time as you become less certain of the results. And often there are opportunities and strategies that you can use to optimize your return that you don’t even know about.
Even if you do have the knowledge, or can gain it, there is a question as to whether or not you want to spend the time. Even a simple return can take a few hours, a complex return can take 20 hours or more, not including the research required to figure out the rules and the cost of mistakes.
Whether you run a business as a hobby or as your full-time occupation – you must file and pay taxes for the business and yourself.
Having a business adds significant complexity to your tax situation because you have to consider everything from revenue to expenses. We often see mistakes in deductions that can lead to significant over and underpayment.
Also, you will have to consider how you are paid, as an employee or through profit distributions, and what each of these strategies means for self-employment tax. There is a lot to balance in a business tax situation and an accountant can help.
Accounting for stock options can be very complicated and there are a lot of variables to track. It is easy to make a mistake.
So, when your options start vesting it is a good time to consult a good accountant. They can give you advice on when to buy and sell your options to make sure you minimize the amount you pay in tax.
If you get married, have a child, buy a house, or get divorced, it is a good time to start working with an accountant. These changes imply different deductions, tax brackets, and trade-offs.
Another possible major change is if you start investing and realizing capital gains and losses. In this case, you have to navigate short- and long-term gains, qualified dividends, and loss carry-forwards, which can be tricky and expensive.
A good accountant can help you navigate these changes, help you adjust your withholding or pre-payments to avoid surprises at the end of the year, and provide you with clarity.
If you haven’t filed or paid your taxes in the last few years talk to an accountant. This can be a serious issue that can even lead to jail time.
But an accountant can help you by filing all of your tax returns at once. They will help you accurately calculate what you owe so that you can take control of the situation.
Also, know that you are not the only one. The IRS does have payment plans and programs for people in your situation and a good accountant can help you navigate the options.
You should also consider talking to a tax attorney since not paying can be very serious. Your accountant can probably recommend someone. At any rate, with an accountant by your side, you do not have to go through this alone.
Most of our clients are more concerned about ensuring that their business is NOT considered a hobby. The value of the deductions generally exceeds the expense of self-employment taxes.
So how do you show that you are operating a business?
The first step in demonstrating that you are a legitimate business is to be one and work as one.
Establish your business structure and act like a business.
Beyond this, the IRS will look for evidence that you are actively trying to make money. You can demonstrate your professional approach in the following ways:
Doing these things will show the IRS that you are serious about turning a profit and that they should classify your activity as a business, not a hobby.
As an added benefit, these also happen to be good business practices in general.
If your tax situation never changes or you have one job and receive a W2 at the end of the year, you probably don’t need an accountant.
If you earn under $72,000 a year, the IRS even has a free filer program for you, which you can check out here. Another option to consider is tax software, and there are some good recommendations here.
Preparing your taxes takes patience, a focus on the details, and knowledge of tax law.
If you have these and want to file your own taxes you can. If you prefer the confidence of having a professional prepare your taxes and would rather spend your time elsewhere, we are here to help.
We would be happy to help you decide. If we can’t add any value to your situation we will make that clear. Why don’t we talk about your situation?
Just click here to send an email or call, we can set up a free consultation.
If you are a client and would like to book a consultation, call us at +1 (212) 382-3939 or contact us here to set up a time.
If you aren’t a client, why not? We can take care of your accounting, bookkeeping, tax, and CFO needs so that you don’t have to worry about any of them. Interested? Contact us here to set up a no-obligation consultation.
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Above & Beyond
New York City
2 West 45th Street, Suite 1208
New York, New York 10036
565 Taxter Road, Suite 105,
Elmsford, New York 10523
Jeff Coyle, CPA, Partner of Rosenberg Chesnov, has been with the firm since 2015. He joined the firm after 20 years of business and accounting experience where he learned the value of accurate reporting, using financial information as a basis for good business decisions and the importance of accounting for management.
He is a diligent financial professional, able to manage the details and turn them into relevant business leading information. He has a strong financial background in construction, technology, consulting services and risk management. He also knows what it takes to create organizations having built teams, grown companies and designed processes for financial analysis and reporting.
His business experience includes:
Creating and preparing financial reporting, budgeting and forecasting.
Planning and preparation of GAAP and other basis financial statements.
Providing insight on financial results and providing advice based on those results.
Jeff also has a long history of helping individuals manage their taxes and plan their finances including:
Income tax planning and strategy.
Filing quarterly and annual taxes.
General financial and planning advice.
Prior to joining the firm in 2015, Jeff was in the private sector where he held senior financial and management positions including Controller and Chief Financial Officer. He has experience across industries, including construction, technology and professional services which gives him a deep understanding of business.
Jeff graduated from Montclair State University, he is a CPA and member of the American Institute of Certified Public Accountants, New York State Society of Certified Public Accountants and New Jersey State Society of Public Accountants.
Jody H. Chesnov, CPA, Managing Partner of Rosenberg Chesnov, has been with the firm since 2004. After a career of public accounting and general management, Jody knows the value of good financials. Clarity, decision making, and strategy all start with the facts – Jody has been revealing the facts and turning them into good business results for more than three decades.
He takes a pragmatic approach to accounting, finance and business. His work has supported many companies on their path to growth, including helping them find investors, manage scaling and overcome hurdles. His experience and passion for business reach beyond accounting and he helps businesses focus on what the numbers mean organizationally, operationally and financially.
He has a particular expertise in early-stage growth companies. His strengths lie in cutting through the noise to come up with useful, out of the box, solutions that support clients in building their businesses and realizing their larger visions.
Prior to joining the firm in 2004, Jody was in the private sector where he held senior financial and management positions including General Manager, Chief Financial Officer and Controller. He has experience across industries, which gives him a deep understanding of business.
Jody graduated with a BBA in Accounting from Baruch College, he is a CPA and member of the American Institute of Certified Public Accountants and New York State Society of Certified Public Accountants.
In addition to delivering above and beyond accounting results, Jody is a member of the NYSCPA’s Emerging Tech Entrepreneurial Committee (ETEC), Private Equity and Venture Capital Committee and Family Office Committee.
He is an angel investor through the Westchester Angels, and has served as an advisor for many startup companies and as a mentor through the Founders Institute.
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