Can a bookkeeper file my annual state and federal taxes?

When it comes to tax time, people are often looking for the cheapest way to get organized and file their taxes. So who can you hire to file your federal, state, and local taxes? Bookkeepers? General tax preparers? Tax attorneys? CPAs? EAs? (Spoiler alert: it's a partnership)

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First, I'll state the obvious: bookkeepers have not gone through the extensive training that CPAs (certified public accountants) or EAs (enrolled agents) have, especially when it comes to filing taxes. From my experience, CPAs can work magic. It's also important to know that in many states, anyone who hangs a sign “tax preparer” can do your taxes.

However…

Should we fire our bookkeepers?

There are multiple reasons to hire (not fire) a bookkeeper.

1. It is a cost effective and excellent way to organize your books in preparation for taxes.

Many CPAs don't have time to organize your books and will just take what you give them and do the best they can with what you give. If you give messy books, you won't get your maximum benefit. Bookkeepers can work with you to straighten up your books, and you can keep working your business in the mean time.

2. Using a bookkeeper throughout the year helps you keep tabs on your business books, and likely decrease tax liability even further.

We truly care about the financial health of your business and love to see you thrive. We help identify areas that are draining your funds and areas where you can maximize profits. We also can help you with budgeting and making financial projections too.

3. Bookkeepers typically partner with your CPA to get you the maximum benefit possible.

Even though, yes, it costs money to hire a bookkeeper and a CPA, it can save a lot of money. Use a bookkeeper to organize and prepare your books quickly and efficiently to pass on to a CPA. And if you're worried a CPA will cost too much, here's a quick story from personal experience: I was going to owe a boat-load of money for taxes one year (unexpectedly) according to a tax software I was using. A family member recommended I go through her CPA. Not only did I then owe nothing after the CPA did my taxes, I got enough money back not only to cover the CPA cost, but to pay off a few more bills!

We are here for you!

We at Rhoda Bookkeeping do catchups and cleanups and we can also train you to use QuickBooks even more efficiently. There are so many other things bookkeepers can do for you. Plus, we can be your translators. Accounting world lingo can be baffling. We can help!

The big takeaways:

1) We bookkeepers can file sales tax, that is quite normal. (But not all bookkeepers do this.)

2) We can partner with your CPA or EA who are most qualified to file your annual state and federal taxes. Trust me, having a CPA or EA is worth it. The partnership of having a bookkeeper and a CPA or EA is prime.

3) We can organize your books in preparation for taxes. Your professional tax preparer will thank you. (Better yet, hire a virtual bookkeeper for monthly bookkeeping. It is worth it! It will ultimately save you money.)

4) Every bookkeeper is different. Check your Engagement Letter. That is your contract and it outlines services that are agreed to be performed.