The Main Street Post

If Hurricane Sandy local effects taught us anything, it’s the need to be prepared for the worst. Maybe your home is ready but, certified public accountants ask, are your finances?

PHILADELPHIA PA – Would you be able to keep your financial life in order during an emergency? Hurricane Sandy and other recent disasters underscore the importance of planning ahead. The Philadelphia-based Pennsylvania Institute of Certified Public Accountants (CPAs) on Monday (Jan. 28, 2013) offered these tips to ensure your bases are covered if a crisis occurs.

Have Important Documents Ready
Which insurance policies will you need if you suffer damage to your home, business, or automobile, or if you or a loved one are injured? Locate these policies and keep them in a safe place. A safe deposit box would work, or you could send copies of your documents to a family member or trusted friend who lives in another location and is unlikely to experience the same natural disasters that you might.

If your documents are in electronic form, consider backing them and any other important information up to a “cloud” storage option; that should keep everything safe and easily accessible. Cloud storage – essentially large disk drives at an off-site location, accessed through a secure online system – is an increasingly popular way to save mission-critical information so it is accessible even amid disasters.

What other documents will you need? If your residence or business is damaged, an inventory of your home or office contents can help with the insurance claims process, especially for valuable items. Keep a list of key phone numbers on hand as well, like emergency services, insurance agent, and close friends and family.

Keep Cash on Hand, And Gas Up the Car
If there are power outages, stores might be unable to take credit or debit cards. Having cash will enable you to make necessary purchases. In addition, power losses can prevent gas stations from opening. That can lead to lengthy gas lines or long trips to find an operating station. Stores will quickly sell out of bread, milk, canned soups and foods, and other basic items. If you have forewarning about a disaster, don’t be caught short on the necessities.

Be Prepared to Communicate
If your family is spread across a wide range of locations, develop a communications plan in advance to share information on everyone’s status. A phone tree is one option, in which one person serves as the main contact and he or she passes on details to several people, who then each pass on details to several others.

Those with online access can also communicate through social media networks. Choose a solution that best suits your family’s needs, then consider a alternative plan in case the Internet or phone access are unavailable.

Plan to Keep Your Business Running
A communication plan is also important for businesses. Depending on the level of disruption, businesses might need to communicate with employees, vendors, investors, or other stakeholders. The communications plan should be part of an overall business continuity plan, a much broader strategy to ensure the company can be up and running as quickly as possible.

A business continuity plan should address all contingencies and include options for operating from a different location if necessary. It should also anticipate how the business would function with limited personnel, or if inventory, supplies, or other necessities are delayed or unavailable.

Planning ahead can mitigate many difficulties associated with disasters. For more information on how to prepare, find a certified public accountant in Pennsylvania at the institute’s website.

PHILADELPHIA PA – Many small businesses aren’t sure if they have enough work to warrant hiring a certified public accountant or other financial professional. Experts at the Philadelphia-based Pennsylvania Institute of Certified Public Accountants have created a list of common business scenarios that would benefit from the expertise of a financial professional.

A financial professional may be able to offer significant and valuable help to your business

Starting Out. Starting a business is more involved than just hanging a sign over the door. Entrepreneurs must gather funds, create a business plan, choose a business type (sole proprietorship, corporation, LLC partnership), ensure they are properly licensed, and are on track to pay all appropriate fees and taxes. A financial professional can offer advice to help you make the best decisions to create a successful business and avoid costly penalties if a business is not in compliance.

Continued Business Success. Tax credits and deductions for your business can be confusing and missing opportunities could be costly. A CPA can help you make tax-savvy business decisions every day of the year and identify long- and short-term tax considerations. He or she can also help ensure your financial reporting is accurate. CPAs can also offer audit and attest services, should your business need them.

Staying Compliant. Tax laws are constantly evolving, and CPAs can help you keep up with the changes. These professionals will alert you to expiring or temporary regulations, and can help you review your taxes to determine the “big picture” in terms of your business’s health and success.

Employee Obligations. Sometimes small business owners or sole proprietors find they must reclassify workers from contractors to employees. This change results in payroll tax, health insurance plan, and state tax consequences, just to name a few. Employees themselves also must deal with tax consequences of being reclassified. Other human resources considerations include health care, retirement plan obligations, and insurance.

What Can a CPA Do for My Business?

The CPA license carries enormous credibility in business and financial circles. CPAs must hold a college degree, pass a rigorous exam, and have professional experience. To keep their license, CPAs in Pennsylvania must complete 80 hours of continuing education every two years and comply with a strict code of ethics. CPAs adhere to a high standard of independence, integrity, objectivity, and professional compliance.

CPAs can help you establish effective business operations that save you both money and time. They can also help you stay current with ever-changing laws and regulations so you can avoid back taxes, an audit, or worse.

There are a number of ways to find a well-respected, local CPA. Asking for recommendations from friends, family, clients, or other professionals are options.

PHILADELPHIA PA – Did you know you are legally responsible for everything on your tax return, even if another person prepared it for you? Did you also know your tax return paints a unique picture of your financial situation that you can use to make smart financial decisions throughout the year? Those are two of many reasons it’s so important to choose tax preparers who really know their stuff.

The Pennsylvania Institute of Certified Public Accountants, with offices in Philadelphia,  outlines some common mistakes in making this choice, and offers helpful solutions.

Mistake 1: Not Asking What “Preparer” Means

Anyone can use the title “tax preparer,” so find out what kind of training and experience the person actually has. You should be aware that even some preparers who are “registered tax preparers” with the Internal Revenue Service (IRS) may have only met certain minimal requirements.

A certified public accountant (CPA), on the other hand, must meet rigorous education standards and pass the demanding Uniform CPA Examination. CPAs are also required to take continuing education throughout their careers to keep their skills sharp and to meet high ethical standards in order to keep their licenses.

Mistake 2: Not Asking About Experience

In choosing preparers, ask how long they have worked with clients in situations like your own and whether they can offer advice on the financial issues that are on your mind.

CPAs have hands-on experience helping a variety of clients understand how to comply with tax laws and minimize their tax outlays. They are familiar with overlooked deductions as well as common mistakes made on returns. You can rely on their expertise to spot challenges and opportunities in your tax filing. Solid experience and training are particularly important if your return will be more complex than average, which could be the case if you are self-employed or if you are dealing with estate issues, a small business, or other complications.

Mistake 3: Not Asking About Fees

To avoid surprises later, find out up front how much preparers will charge. A preparer’s fees may vary based on the complexity of your return and other factors. More experienced preparers may cost a little more but the savings or other financial advice they offer may cover some or all of any added expense.

Keep in mind, too, that you should avoid working with someone whose fee is based on a percentage of your refund or on how much they can save you in taxes. Also ask whether preparers can represent you before the IRS in case your return is audited and what extra charges might be involved if they do.

Mistake 4: Not Reviewing Your Return Once It’s Done

One of the most egregious mistakes you can make is to not review your return. Look it over and make sure you understand it. If you see anything you believe may be incorrect or that doesn’t make sense, contact your preparer and ask questions.

Mistake 5: Setting Your Return Aside and Forgetting About It

Do not ignore your return once it is filed. It is an important financial document. Did you pay too much in taxes last year? Are you taking the right steps to prepare for retirement, a child’s college education, or other long-term goals? Your tax return, which contains vital information about what you earned and how you spent it, can help answer those questions and many more.

If you have more questions about your tax situation or any aspect of your financial life, be sure to consult your local CPA. He or she has the expertise to advise you on all your financial concerns. To find a CPA in Pennsylvania by location or area of expertise, visit www.IneedaCPA.org.

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PHILADELPHIA PA – The top New Year’s resolution in 2011 regarding consumer finances was cutting back on debt, according to the National Foundation for Credit Counseling. If you are one of those people who made that pledge, and your resolve is starting to fail, the Philadelphia-based Pennsylvania Institute of Certified Public Accountants offers some tips to help you along.

Get the big picture

Begin by adding up all your outstanding consumer debt.

You may be in for a pleasant surprise if you come up with what seems like a reasonable number, or you may be in for a rude awakening if the total is larger than you expected. In either case, before you can create a plan to eliminate debt you must know how much you’ve got. What you find may change how much money you want to pay off each month, and how long you can expect your efforts to take.

Time to cut the cards?

Once you know where you stand, take a long, hard look at your credit cards. If you have little or no balance on your cards, good for you! If you have multiple cards where you only pay the minimum balance, you need to evaluate and limit your use of credit cards.

It is important to take steps to prevent adding to that amount: Stop using credit cards.

Lowering existing balances won’t happen if you continually add to them each month. If doing away with plastic is not possible, budget a specific amount that you can spend on credit monthly and stick to it. Keep track of everything you spend so you are sure to stay within that budget.

Attack the highest rates first

As a general rule, begin by paying off the debts with the highest interest rates because those balances cost you the most each month. If you’re not sure how much interest you are being charged on each credit balance, check your monthly statement or contact the credit card issuer for more information.

If you have a strong payment record, this may also be a good time to try to negotiate a lower rate with all of your credit card companies.

Pay above the minimum

Always attempt to pay more than the minimum due on any account.

The longer it takes you to get rid of debt, the more time you will spend paying interest on it. For example, if you have a $3,000 balance at an 18 percent interest rate and pay only a minimum $60 each month, it will take you 26 years to erase that debt. Raising your payment to just $100 every month allows you to wipe out your debt in about three and a half years, and slashes your total interest to $1,016.

Questions about budgeting, interest rates, debt management, or any other issues related to your financial life an be answered by a certified public accountant. Find a CPA near you, here.

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