FAQ Page

We maintain a policy of the strictest confidence concerning our clients’ affairs. You can rest assured that no one will learn about your business or tax status – even relatives, associates or friends who might have referred you to us.

We are here for you twelve months a year, not just during tax season. Whether you have a simple tax question, need advice on the tax implications of a business decision, or want clarification on a government notice, feel free to give us a call.

Bailey & Company plays an important role in business and the economy. Possessing technical knowledge and skills, we are trained to apply sound judgment in business situations, helping people and organizations evaluate the use of economic resources. We provide a wide range of services to various sectors including, but not limited to, the business and corporate industry and nonprofit organizations, playing many roles such as:

Certified Public Accountant (CPA) is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA. In most states, only CPAs who are licensed are able to provide to the public attestation (including auditing) opinions on financial statements.
CPAs function as independent auditors and act as advisors to individuals, businesses, financial institutions, nonprofit organizations, and government agencies on a wide range of finance and tax-related matters.

To qualify for certification and a state license, an individual generally must:

A CPA has demonstrated professional competence by passing a rigorous examination and meeting high standards of education. In addition, they must meet strict continuing education requirements, undergo peer review, and adhere to a stringent set of ethical standards.

CPAs are authorized to represent taxpayers in an IRS audit, as are attorneys and other professionals known as enrolled agents (EA). An EA is an individual who has demonstrated technical competence in the field of taxation and is the only taxpayer representative who receives their right to practice from the U.S. government. An accountant can only represent a taxpayer before the IRS if he or she is an EA.

The IRS estimates that it can take 28 ½ hours to research tax law, organize your records, and complete a standard 1040 return with three common schedules. Tax law is constantly changing, so it is important that you are educated about these changes so you correctly fill out your forms. Being technologically savvy is also important as tax preparation software can help eliminate errors, both mathematical and technical. If you’re not comfortable with using this type of software, you may want to contact a CPA.

If you’re a salaried employee who takes the standard deduction, your return is likely to be simple. However, if you’ve encountered a major life change, such as marriage or divorce, or own a vacation home or rental property, your tax situation may be more complicated.

Self-employed individuals and small business owners are more likely to be audited by the IRS, and working with a CPA will help lessen that risk. In addition, if you have a high income, live in a state with high income taxes, or have a lot of miscellaneous itemized deductions, you could be subjected to the Alternative Minimum Tax (AMT). The AMT, which eliminates many itemized deductions and was created to ensure that the wealthy pay their share of taxes, is now affecting more middle-class taxpayers. If you think this might affect you, consult a CPA.

The American Institute of Certified Public Accountants (AICPA) provided the answer to this question.

I am starting a new business that is costing me $10,000. We are a wholesale company, and we pay our employees 10-15 percent commission-based pay. Do you think we should start the sales of our products at $1,800 and up in order to make a profit? Companies purchasing our products must purchase at least three products from us, which will cost them $5,400. Do you think I need to sit down with an accountant?

It’s impossible to say what the selling price of your product should be since there are innumerable factors that go into that decision, such as cost to produce or purchase the product, target gross profit on the product, the gross profit the market will bear for the product, overhead, etc. The price should be based upon your own internally generated factors. Do not shy away from a figure just because the price tag seems large. Large to you may not be large to potential customers.

It is imperative that you contact a CPA. You will need to discuss the organization of your company for tax purposes as well as numerous other issues relating to operations, not the least of which will be setting your target pricing and gross profit margins. Don’t wait until the year-end to have this discussion. You could be making decisions without the proper advice, and that could wind up hurting you financially or legally.

It depends on your financial personality. Do you prefer to have more withheld today so that you can get a refund next year? (This is really an interest-free loan from you to Uncle Sam.) Or are you disciplined enough to set aside some of your paycheck today and save it to pay your taxes next year? (You could invest the money in the meantime.)

It is also depends on your prior year tax liability. Do you know how to avoid an underpayment penalty situation?

We can tell you how to avoid the underpayment penalty, and we can compute approximately how much you will get back or have to pay in.

First you need to ask yourself, “How valuable is my time?” Imagine what you could be doing to build your business with that time. Could you earn more than what a CPA would cost? The answer to these questions will change as your business grows.

Second, you need to ask yourself if you have the skills and the desire to do it yourself. Will you have to learn these skills? Will you have to keep yourself updated? Do you really want to crunch numbers? Do you want more than just a report when you are done?

Any professional you choose should not only have the technical knowledge required but should also treat you with respect.

Does your CPA and advisor take time to listen to you? Does your CPA and advisor return your calls in a timely manner? Do you feel comfortable asking your CPA and advisor a question?

When you need a professional in the region who will make you their top priority, call us!

A significant contribution of CPAs in the practice of public accounting is the audit, whereby an independent opinion is expressed as to the fairness of financial statements. CPAs also perform almost every conceivable financial and management advisory service for businesses and individuals. CPAs do general accounting, tax planning and advice, tax return preparation, estate planning, personal financial planning, and representation of clients before government agencies. CPAs also help clients choose and implement accounting systems. They help in the development and analysis of financial models, cost controls, profit plans, and internal reports. CPAs are often consulted on business, civic, and other problems on which their judgment, experience, and professional standards permit them to provide helpful advice and assistance.

Yes. The more you understand about your needs, the better job we can do together of matching our services to those needs. Your first step is to decide what you want from us. Different CPA firms offer different levels of experience and provide different services. Prior to meeting with any CPA you are considering, you should review your present and future financial goals and needs. Some general questions you should ask yourself might be: