Frequently Asked Questions
- What is an EA and how is that different from a CPA?
Both Enrolled Agents (EA) and Certified Public Accountants (CPA) are licensed professionals who can effectively handle the tax issues of an individual or a business. The primary difference between the two lies in the fact that the license of an EA is authorized by the federal government, i.e., the US Department of the Treasury while the CPA license is issued by individual states.
Apart from preparing and filing tax returns, a CPA can do auditing and is able to give wealth-related financial advice. An enrolled agent (EA) is an IRS-authorized professional with a focus on tax. EA is considered highly coveted as it is the highest credential awarded by the IRS. Being a federal license holder, EAs can represent any taxpayers from any part of the country to any IRS office without restriction, including practice overseas.
- I want to get my taxes done, how does that work?
First, you will need an account created on our portal. The portal serves as your go-to during the tax preparation process. The next step is to fill out our smart e-organizer within the portal system. This will allow us to collect vital information and ask for important documents required to prepare your tax return. It is easiest to upload your documents during this process. Once your organizer and documents are received I will schedule a brief due diligence call to discuss the information you have provided, ask questions and then provide a proposal for the preparation of your taxes.
The proposal and engagement are sent and signed inside of the portal. You will also receive an invoice from our accounting program to your e-mail separately. Once I receive the signed engagement and invoice payment, your return is added to the queue for preparation. The portal features a messenger program where we can communicate if questions arise during the process.
Once your return is complete and ready to be reviewed, we will load it into the portal to be viewed at your convenience. Please do not approve the return or sign for your return until you have asked any questions you may have or if you need to request updates or changes upon review. When I receive your approval I will upload your signature documents to be e-signed within the portal. Once you have signed your signature document, I will e-file your return and post a message in the portal indicating once the e-file is shown received by the IRS for processing. The completes the engagement.
- How much should accounting cost my business?
There is no magic formula for determining how much a company should spend on its accounting functions. The typical cost is 1-5% of revenue depending on the size and complexity of your business. Factors that influence these costs are: the size of your business, volume of transactions, services required, industry complexity, frequency of services and complexity of payment systems. The simpler the set up, the simpler/less costly the accounting.
- How do I know if I should make an S-corp election?
If your business is making a substantial profit (90-100k+) after expenses I would normally explore making an S-corp election dependent on other factors. It's important to consider: number of owners, active involvement, stability of income from year to year, and administrative complexity. There are additional costs associated with bookkeeping, payroll and tax filings that must also considered. Book a consultation if you're considering making a change to discuss the ins and outs as well as any potential tax implications.