Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Its hard to follow because you seem to believe, rather erroneously, that no issues arise when you use a "professional". Would I have had less issues over the years if I used a CPA? No idea... But I've only had two relatively mirror issues and both were easy to resolve. I think that says a lot, because my taxes aren't basic. I file 50+ pages every year....so only two issues is pretty good in my book.
Done right the first time is better than "minor issues"
Think about what you just said. You are saying that an accountant can find ways to increase your profitability, yet you are suggesting you should devote your time to "things that make you money". That is entirely contradictory. And it is precisely because accounting and tax issues are so important in businesses, that a small business owner is well served by investing the time/effort into learning how to do it himself. As I said, its not just a side act, its an integral part of business.
No matter how good your accountant is, he is not going to have the same sort of concern over your operations as you are.
You don't need to know every single nuance and your accountant doesn't know every single nuance either. The tax changes year-to-year are modest and not hard to keep on top of.
But the idea that you're paying someone $1,100 to do something that would take you a vast amount of time, of course, makes no sense. If it was that time consuming he would be charging far more than $1,100. The primary issue here is the initial investment one has to make learning about accounting/taxes, but as I've been saying I think this investment pays large dividends year after year.
If you're doing your own taxes, you'll have no problem explaining everything to the IRS. As for the relationship, that can be a double edged sword, you really have no idea whether your CPA has a good relationship with the IRS or not.
You are conflating the fields with the people that do them, certainly businesses can't skimp on accounting and legal matters, but the degree to which they should pay "professionals" to do the work for them is a different matter entirely.
Okay, now you're really being ridiculous. I realize that your business experience is nonexistent, or dealing with nothing larger than a coffee shop, but a good accountant can structure all kinds of things from a tax perspective to save you gobs of money. What's more, the more sophisticated your business is, the more sophisticated your accounting needs are.
What's more, I make my money by doing what I do and doing it well. Poring over tax regulations when I could be serving my clients is far less profitable use of my time. Seriously. Tell you what. Ask 1,000 established business owners, the ones who have sales of more than $1,000,000 a year, and ask them how many of them spend their time reading the current tax rules. They'll look at you as if you've lost your last marble. "That's why my accountant is for."
Why? Because what takes my accountant 10-14 hours to do will take me much longer. The reason for this is simple. Because I am not fluent in tax accounting. I understand the larger principles, to be sure, but the almost yearly changes in deductions and tax law make it impossible to be an expert on the subject. Tax accountants spend weeks at seminars every year understanding the minutiae of it. That's what I pay my $1,100.
Another thing since you don't understand basic math: I bill $150 an hour for my time. $1100 amounts to less than eight hours of my time, time better served by calling on clients, developing prospects, and performing billable work. In fact, I would argue that if you're actually devoting your professional time to scrutinizing the latest batch of IRS regs, I would offer that you're just not that busy. Finally, I pay the accountant to ensure that I don't have a hair out of place on my tax returns and that my multiple holdings and corporations are absolutely, 100% in compliance, and are getting every possible advantage of the law. That's worth every dime I pay. And more.
Pretty much, whether you like it or not that is just how the world works. An accountant is not going spend his days doing boring small business returns, etc making peanuts when he has the talent to work at XYX corp making far more.
The fact that you think Enron's accounts were "stupid" demonstrates that you don't know much about accounting. That's fine, pay your CPA, but some folks have taken the time to learn about accounting/taxes.
As I said, being criminal/unethical, is a lot different than being bad in accounting. There are a lot of brilliant, yet unethical accountants out there.
That's funny. Given that you have issues with the IRS that need resolution shows that your knowledge of accounting would fit on the head of a pin.
Okay, now you're really being ridiculous. I realize that your business experience is nonexistent, or dealing with nothing larger than a coffee shop, but a good accountant can structure all kinds of things from a tax perspective to save you gobs of money. What's more, the more sophisticated your business is, the more sophisticated your accounting needs are.
What's more, I make my money by doing what I do and doing it well. Poring over tax regulations when I could be serving my clients is far less profitable use of my time. Seriously. Tell you what. Ask 1,000 established business owners, the ones who have sales of more than $1,000,000 a year, and ask them how many of them spend their time reading the current tax rules. They'll look at you as if you've lost your last marble. "That's why my accountant is for."
Why? Because what takes my accountant 10-14 hours to do will take me much longer. The reason for this is simple. Because I am not fluent in tax accounting. I understand the larger principles, to be sure, but the almost yearly changes in deductions and tax law make it impossible to be an expert on the subject. Tax accountants spend weeks at seminars every year understanding the minutiae of it. That's what I pay my $1,100.
Another thing since you don't understand basic math: I bill $150 an hour for my time. $1100 amounts to less than eight hours of my time, time better served by calling on clients, developing prospects, and performing billable work. In fact, I would argue that if you're actually devoting your professional time to scrutinizing the latest batch of IRS regs, I would offer that you're just not that busy. Finally, I pay the accountant to ensure that I don't have a hair out of place on my tax returns and that my multiple holdings and corporations are absolutely, 100% in compliance, and are getting every possible advantage of the law. That's worth every dime I pay. And more.
Amen! I coudn't rep you, but this and other of your posts are spot on correct.
Spending more time on cleints and their needs is far better use of my time and worth the money spent to have this work done. To think anything less is foolishness.
Pretty much, whether you like it or not that is just how the world works. An accountant is not going spend his days doing boring small business returns, etc making peanuts when he has the talent to work at XYX corp making far more.
The fact that you think Enron's accounts were "stupid" demonstrates that you don't know much about accounting. That's fine, pay your CPA, but some folks have taken the time to learn about accounting/taxes.
As I said, being criminal/unethical, is a lot different than being bad in accounting. There are a lot of brilliant, yet unethical accountants out there.
LMAO. Now you are just being ridiculous. I actually have an accountin degree, so I know a thing or two. I have worked with plenty of talented, smart people who didn't make that much money.
Enron's accountants sure were stupid for throwing away their careers. There's more to an accountants job than just fudging the numbers and cooking the books. There's a little thing called ethics. They may have been good at accounting but overall they were bad accountants.
Done right the first time is better than "minor issues"
Except that they were done right the first time and that is why the fees were abated, all I had to do was explain matters. But, as I noted before, you're speaking as if returns filed by CPAs never have issues. That isn't true.
but a good accountant can structure all kinds of things from a tax perspective to save you gobs of money.
You are, as always, ignoring all the real issues. When have I denied that tax issues aren't important monetary wise? I didn't, in fact my claim is rather the opposite, it is because tax/accounting issues are so important that a small business owner is well served learning about them and dealing with them himself. The business owner is going to have far greater concern with his tax savings, etc than any accountant.
Quote:
Originally Posted by cpg35223
Why? Because what takes my accountant 10-14 hours to do will take me much longer. The reason for this is simple. Because I am not fluent in tax accounting.
So, admittedly, you're not fluent in tax accounting yet you think you can make meaningful judgments about the amount of time it takes a small business owner to keep up with year-to-year changes in the tax code? Not sure how that works.
You are speaking as if you're getting some profound value out of the $1,100, as if their hourly rates are dramatically cheaper than yours, etc. They aren't. But whether they can do your return cheaper or not is immaterial, a small business accountant is never going to have any serious concern over your business or personal taxes. They aren't going to call you up one night with a great idea, they aren't going to be actively thinking about your business...nothing. No accountant is going to do the amount of tax planning/thinking that I do for a mere $1,100 a year.
As for your continued implication that the tax code some how changes dramatically year-to-year, its entirely off base. The tax code is relatively stable year-to-year and one does not need to commit much time to learning about changes, after all, its only the changes that are relevant to your tax situation that you have to know. So, as I've been saying, the big issue here is the initial investment it takes to learn about taxes/accounting. My claim here is that its a worth while investment for most small business owners (and individuals as well) to make. Now, I realize that most aren't going to make it, but its for much the same reason most people don't have many books in their house.....
Oh, and as before, I'm rather amused that a small-time business consultant is telling me I'm not experienced in business. Good stuff.
That's funny. Given that you have issues with the IRS that need resolution shows that your knowledge of accounting would fit on the head of a pin.
Oh yeah? So you're suggesting that if anybody has issues, regardless of the sort or cause, with the IRS, then they are blatantly ignorant of accounting? How...utterly inane.
I have worked with plenty of talented, smart people who didn't make that much money.
I know some talented people that don't make that much money, but they aren't accountants. Why would any sane tax professional spend his day dealing with trite tax matters for peanuts when he could make considerable more on more fulfilling work?
But hey, this is a difference in world view, if you want to think there are talented people on every corner making peanuts that's your business. I don't think that way, I view talent as something in very limited supply and I wouldn't even consider a tax professional that didn't graduate from a top program.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I coudn't rep you, but this and other of your posts are spot on correct. 
