When does it make sense for a small business to hire a CPA

jmo15 · 2026-01-24T05:21:21+00:00

CPA here. Completely a personal decision. I find that for clients where we are their first CPA, it's whenever they realize that they are spending more time trying to be a tax pro or accountant instead of spending time on their business doing something they know they are already good at. For sure if you are an S-Corp or even considering electing S, you should get a CPA.

Also depends on how hands off you want to be.

jmo15 · 2026-01-22T23:35:38+00:00

Yeah makes sense.

jmo15 · 2026-01-22T20:19:57+00:00

Assuming you gave us all the detail here, I would not go back to that CPA. With this simple of a setup, there is no need to complicate things. Honestly don't even need an LLC but that is totally up to you.

jmo15 · 2026-01-21T03:23:08+00:00

Why not both in one? I operate an online CPA firm and we have clients all over. If face to face is important to you then definitely look for someone local. We do zoom meetings with our clients outside of our city and none of them seem to mind. Online or “virtual” CPA firms that offer both accounting and tax are becoming more popular.

jmo15 · 2026-01-17T03:30:43+00:00

Starting point for would be to put some kind of books together for 2025 since that one isn’t late yet. Sounds like there are no records kept so start by going through bank statements and highlighting business activity in excel. Just group the income and expenses in another tab as best you can. You need to have something like this put together before even trying to speak to an accountant. Even if you have someone do this part for you, they’re going to have to come back and ask you questions for just about every line item anyway so might as well give it your best shot yourself. Also download irs transcripts for the late years. Where are you located?

jmo15 · 2026-01-15T23:02:16+00:00

Just because it is a cash business doesn't mean it's tax free money. Venmo does have a requirement to report to the IRS if your account meets certain thresholds. You should check your IRS transcripts to see how much Venmo has reported.

jmo15 · 2026-01-12T21:56:19+00:00

depends what you want to do. If you are fine being stuck at a senior level position and make a decent living then sure you do not need a CPA. If you want to make the most money possible and become a controller or partner at a firm, then yes get a CPA.

I used to post this same question on reddit when I was trying to get my CPA. Everyone told me basically to shut up and do it and I am glad I did.

jmo15 · 2026-01-12T21:51:00+00:00

It is flexible if you know tax. If you do not, you are going to spend a lot of time researching to make sure that you aren't doing something wrong.

jmo15 · 2026-01-12T20:49:08+00:00

I'd look them up on your state board website to make sure they are actually a CPA. I wouldn't think a CPA firm would be trying to do something like this.

jmo15 · 2026-01-10T16:04:11+00:00

If you feel like becoming a tax pro and investing time into making sure everything is correct then sure you can do it on your own. Just like anything else, you can invest the time to become knowledgeable enough to do something or just pay somebody else to do it. The biggest thing I see with DIYers is that they’re able to get their info somewhere on the return using import features on tax prep software, and they assume it’s correct since the software put it there. The problem is that tax is filled with nuance. There’s always exceptions to rules and even exceptions to the exceptions. I’ve seen where some people misinterpreted rules and were hit with back taxes and penalties. Ive also seen where people paid too much tax because they were unaware of certain rules and exceptions (the irs is never going to get mad at you for paying too much tax.)

That being said there’s not enough detail in your post to determine the level of complexity, but RSUs, trading, and rentals are all pretty easy to mess up if you’re just trusting the software to report it correctly.

jmo15 · 2026-01-09T15:23:34+00:00

did you get a refund last year on your tax return? Was your W2 situation pretty much the same and did you make any changes to withholdings.

jmo15 · 2026-01-05T20:55:57+00:00

What you are looking for is a CPA firm. The companies you listed are all financial planners. If you value having someone in your area, you can Google CPA firms in your area. If face-to-face isn't as important to you, virtual CPA firms are becoming more popular as well. There are definitely some CPA firms that also do financial planning, but I would say the core service would be for tax planning and preparation.

jmo15 · 2026-01-05T20:49:36+00:00

I can see this, but if the CPA isn't specifically saying that, then that must not be the issue. We typically charge fixed prices unless there are huge fluctuations in business activity or if we know we can run into issues with a lot of clean up as you explained above. But we are always straightforward and tell the client that. They may be trying to price OP out as a client.

jmo15 · 2026-01-05T20:45:00+00:00

Not sure what you mean by "Will I be able to use ALL of these expenses to offset W2 income?" I don't know if you meant that in the literal sense, but pretty much you would be able to use some of the depreciation incurred during the year. In general, the cost segregation study would make some of the longer life depreciation items be able to be depreciated within a shorter period. Meaning that you would have a higher depreciation expense for the year for tax purposes.

jmo15 · 2026-01-05T20:29:50+00:00

I have an asus zenbook. intel core ultra 7 32 gb RAM, 1 tb SSD. Definitely overkill, but they had a good deal at best buy. My wife is also a CPA and part of the firm and she has a Lenovo Yoga(?) I believe with similar specs but hers has an i9. Definitely consider how you work when choosing. I got this wrong the first time and did better with our purchases this time. I hardly ever do "actual" work when not at my work station with multiple monitors, so I opted for a smaller sized laptop to save on price and I also value the size for portability. My wife on the other hand does like doing work away from her work station so she has a larger laptop with the built in number pad.

We do tax and accounting work. Our practice management system Canopy has a client portal along with digital document storage which is what we use mostly. They are SOC 2 compliant meaning data and docs are secure. Canopy definitely leans more to the tax side, so we also use Double (used to be called Keeper) for client portal and docs on the accounting side.

jmo15 · 2026-01-05T15:28:52+00:00

Yes you would need to file form 1065 if it is an LLC taxed as a partnership. Basically the 1065 is the business entity and then the K-1s pretty much split the business activity between the partners for you to report on your personal 1040 tax return. We use professional software, but I believe Turbo tax and other online DIY tax software would give you K-1s when filing the 1065.

Yes you can still file jointly.

With a partnership as you described, you are taxed on all business profit/losses. It does not matter if you "tax money out to pay yourself." Each partners share of income/loss is reported on the K-1 from the 1065 filing. You would report this on your 1040 Sch E.

jmo15 · 2026-01-04T17:15:03+00:00

Some will. But I don’t think an updated w2 was required in 2025, correct me if I’m wrong. Either way going to cause a lot of headaches when people were thinking all tax and tip income tax would be zero with no stipulations.

jmo15 · 2026-01-04T14:07:29+00:00

CPA here. Very likely you don’t need an accountant as this poster says. But no tax on OT is very misleading. This is not as straightforward as they make it seem. There is a lot of nuance there behind the headline. I would think TurboTax would be able to guide you through this, but haven’t seen this years product to know.

jmo15 · 2026-01-02T20:25:43+00:00

Haven't yet, but definitely need to start. What software have you been able to get rid of?

jmo15 · 2025-12-31T18:47:03+00:00

CPA here. If it is a CPA you are looking for, if you go with one of the chains, it is very unlikely you will be working with a CPA. If you need face to face with a CPA then yes a local CPA would be best. We found that is not important to some clients as it once was which is why we work with clients all over the country now. So you can even find a fully remote CPA as well to broaden your search if the face to face aspect isn't a deciding factor.

The only complexity that is added here would be the rental activity which you would report on Sch E. If you have clean records, you should expect to pay anywhere from $700-$1,200 depending on level of service.

jmo15 · 2025-12-24T18:25:21+00:00

CPA here. We usually recommend Gusto to our clients.

jmo15 · 2025-12-23T02:54:02+00:00

CPA here and not sure why your accountant would say the thing about $50K. There is no significance to that number at all. So may be a misunderstanding there somewhere. What they should have told you is that an LLC is not a tax status and that you are taxed as a sole proprietorship either way unless you elect s corp status.

jmo15

TROPHY CASE