The best time to start looking for a new CPA is Q4
When starting your own business, you may be thinking about hiring a CPA. Why is hiring a CPA a good idea? There are several reasons:
- CPAs play an essential role in the set up of your business and choosing the right business entity
- CPAs can prepare three levels of financial statements audits, reviews and compilations, to keep you informed.
- CPAs can help you manage your personal income and create a budget that works for you
- CPA’s who have experience in tax laws and codes to navigate complicated tax situations
- CPA’s can specialize in your specific business industry, understanding its unique challenges
If you need a new CPA for your business and/or to help with your personal finances, here are some key factors to consider before making your final decision.
Changes to finances is one factor to consider. Perhaps you expanded or closed your business or have recently moved. Have you recently sold, bought, or rented out a property or made significant changes to your investment portfolio, retirement or estate plans? Have you recently been contacted by the IRS about some issue related to your taxes? Any of these circumstances could have an effect on your tax status, so hiring a CPA firm is a wise decision.
October, November, December
The other factor when hiring a new CPA is the time of year. While there is no wrong time of year to enlist the services of a CPA, (except for the month of April), as the end of the year approaches you could miss out on an opportunity to reduce your tax liability.
A general rule of thumb is as follows:
- October: Look for new CPAs
- November: Consult with potential CPAs
- December: Hire a new CPA by December 31st
Before December 31st, you will still have some flexibility to make changes related to your tax status, including, but not limited to:
- Amending 401(k) contributions
- Making adjustments to the withholdings on your W-2 forms
- Setting up an Health Saving Account (HSA)
Making these and other adjustments may change the amount you end up owing in taxes. After December 31st, you are locked in as far as your tax obligations are concerned.
While Q4 is ideal, it’s never too late
When looking to make changes to your tax obligations for the next year’s tax deadline, you’ll want to hire a new CPA before the end of the current year. However, you can still benefit from hiring a new CPA in the new year.
Hiring a new CPA in January will help you better position yourself as you head into the new year, and the right CPA firm can not only increase the accuracy of your return for the current tax season, but can also be a huge help when it comes to avoiding being audited.
If you are about to fire your current CPA and are ready to hire a new CPA, contact GYL CPAs and Advisors, an accounting firm for businesses with offices located in Ontario and San Diego. GYL offers a full range of accounting, auditing, business advisory, and tax services for businesses.