People often confuse the roles of bookkeepers, accountants and certified public accountants (CPAs). It's not surprising since many of their duties overlap, but the overall responsibilities of each role and the level of authority held by the positions differ. They all share fiscal responsibility – in degrees – for the company or organization for which they work.
Often considered by accountants and CPAs as just technicians or clerks, bookkeepers perform some of the same daily tasks as do accountants and certified public accountants. Many bookkeepers work as freelancers for small businesses in need of financial recordkeeping. Bookkeepers maintain daily accounting records, posting debits and credits, generating invoices for clients and checks for vendors as well as handling payroll. Many small business owners often double as bookkeepers. Bookkeepers typically lack the education of an accountant or CPA, as they gain on-the-job experience. Professional organizations for bookkeepers help to improve professional recognition for bookkeepers by accounting professionals as well as providing certification programs of abilities and skills.
Accountants have a four-year college degree. While many accountants have an educational background in accounting, some are more general business majors. Accountants work with accounting clerks and technicians who handle daily financial entries. Accountants oversee or perform billing, make general ledger entries, review accounts payable activity completed by clerks or technicians or handle payroll. A mid-level position in the accounting department, accountants report to accounting managers, company controllers or financial directors, all of whom might be certified public accountants.
Certified Public Accountants
Certified Public Accountants have a focused education in accounting and must pass the Uniform Certified Public Accountant Examination. CPAs must meet state education and experience requirements before they can sit for the exam. Accountants not meeting these requirements cannot use the CPA designation legally. Certification is renewable every two years, subject to state requirements. CPAs have a higher level of responsibility than bookkeepers or accountants; because of their certification, they can perform auditing, tax and financial services for individuals, corporations and other business or nonprofit organizations.
Many entrepreneurs who launch their own businesses start out by wearing the bookkeeper's hat and doing their own books & taxes, in addition to doing just about everything else in the business, too. Simple bookkeeping software, such as QuickBooks, makes that possible. But there comes a time in a growing enterprise when it makes sense to hand over responsibilities for taxes, accounting, and the rest of the financial functions to specialists.
The right CPA can help a business with not only ensuring that the accounting records are accurate and maximizing deductions on tax returns, but with longer term tax planning, business planning, and even personal tax planning. I'd love to help you when you are ready to upgrade to a CPA!
Do you wait until two weeks before the deadline to file your tax return?
It's almost time for you to get started then - we only have 4 weeks left before this year's tax deadline!
Last minute filers typically fall into two categories: Either they owe the IRS money, which removes any incentive to file early, or they’re procrastinators who would go have dental work than prepare their tax returns.
This year, the calendar is the procrastinator’s friend. April 15 falls on a Sunday, and because April 16 is a holiday in Washington, D.C., you have until Tuesday, April 17, to file your federal tax return.
If You Don’t Owe...
If you’re due a refund, there’s no reason to sweat this deadline. The IRS will gladly hold on to your money until you get around to filing your return.
There are instances in which you should file on time or file an extension even if you don’t owe the government money. If you converted a traditional individual retirement account to a Roth IRA in 2017, you have until October 16, 2018, to undo the transaction and avoid paying taxes on it. But to qualify, you must file your tax return or request an extension by April 17.
File for an Extension?
Filing for an extension will give you until October 15 to file your tax return. Approval is automatic. Use IRS Form 4868 to file your request. Most tax software programs provide this form.
Filing for an extension gives you more time to file your return, but it doesn’t give you more time to pay taxes you owe.
If You Can't Pay...
If you can’t come up with the money by April 17, you should still file a tax return or request an extension. Otherwise, you will get hit with failure-to-file penalties, along with underpayment fines and interest on the balance.
If you need just a little more time to come up with the money, you can ask the IRS for an additional 120 days to make your payment. There’s no fee to set up this agreement, although you’ll owe interest and other fees on the balance until it’s paid off. To request an agreement, call 800-829-1040.
If the amount you owe is large and you can’t pay by April 17, consider requesting an installment plan with the IRS. With an installment plan, you can make monthly payments until the balance is paid off. Taxpayers who owe $50,000 or less can apply online. You’ll have to pay a set-up fee of $225 (or $107 if you arrange for direct debit from your bank account).
Another option is to pay taxes with your credit card. This may appeal to taxpayers who would rather owe money to Visa or American Express than the IRS, especially if they have rewards cards. But while the IRS will accept payments via credit card, it won’t pay the “convenience fees” credit card companies charge retailers. Fees range from 1.87% to 2% of the balance. If you use tax software to e-file, the fees are even higher: TurboTax charges a 2.49% convenience fee. If you don’t pay off the balance by the credit card due date, you’ll also owe interest.
If all of this is overwhelming you, you are not alone! Contact me ASAP! Give me all your tax documents and let me deal with it all for you! I actually like this stuff!! I'll get you filed on time and I'll also ensure you are taking every deduction that you are able to take to help minimize your tax bill.
Hi! I'm Jaimie and I have a B.A. in Accounting, an MBA with an emphasis in Accounting and a CPA license. I worked for about 10 years in CPA firms doing audits and reviews and then for about 10 years in private companies managing accounting departments. I've learned a lot about accounting, finances and taxes over the last 20 years! And now I want to share my knowledge with you here!