Frequently Asked Questions
What is a CPA?
A CPA, or Certified Public Accountant, is a licensed financial professional who has passed the Uniform CPA Examination and met state licensing requirements. CPAs are qualified to handle tax preparation, financial planning, audits, and business advisory services. They are held to strict ethical standards and ongoing continuing education requirements.
How Do You Choose a Financial Advisor?
To choose a financial advisor, look for credentials such as CPA or CFP, verify their experience with clients in your financial situation, understand how they charge (fee-only vs. commission-based), and confirm they act as a fiduciary — meaning they are legally required to put your interests first. Always ask for references and check for disciplinary history.
What Is Bookkeeping?
Bookkeeping is the process of recording, organizing, and maintaining a business’s financial transactions on a day-to-day basis. This includes tracking income and expenses, reconciling bank statements, and categorizing transactions. Accurate bookkeeping provides the financial foundation needed for tax preparation, business decisions, and financial reporting.
What Does a Financial Advisor Do?
A financial advisor helps individuals and businesses manage their money more effectively. Services typically include tax planning, investment guidance, retirement planning, budgeting, business financial strategy, and estate planning. A good financial advisor takes a comprehensive view of your financial picture and builds a plan tailored to your specific goals and circumstances.
What Does a CPA Do?
A CPA (Certified Public Accountant) prepares and files tax returns, conducts audits, provides financial planning and advisory services, ensures regulatory compliance, and represents clients before the IRS. Unlike general accountants, CPAs are licensed by the state and can perform a broader range of financial services for both individuals and businesses.
What Are Tax Deductions?
Tax deductions are expenses that reduce your taxable income, which in turn lowers the amount of tax you owe. Common deductions include business expenses, mortgage interest, charitable contributions, and retirement contributions. The more deductions you qualify for and properly claim, the less taxable income you report and the lower your tax bill.
How Do Tax Deductions Work?
Tax deductions work by reducing your taxable income. When you claim a deduction, you subtract the eligible expense from your total income before calculating the tax you owe. The tax savings from a deduction equals the deduction amount multiplied by your marginal tax rate. For example, a $10,000 deduction at a 25% tax rate saves $2,500 in taxes.
What Is a Fiduciary Financial Advisor?
A fiduciary financial advisor is legally required to act in their client’s best interest at all times. Unlike non-fiduciary advisors who only need to recommend “suitable” options, a fiduciary must prioritize the client’s financial wellbeing over their own commissions or business interests. This higher standard helps ensure unbiased, client-first advice.
Do I Need a Financial Advisor?
You likely need a financial advisor if you own a business, have complex tax situations, are planning for significant life events (retirement, real estate investment, business sale), or feel uncertain about your financial decisions. A financial advisor can uncover savings, prevent costly mistakes, and provide a clear roadmap for building and protecting your wealth.
What Is a CPA for Taxes?
A CPA for taxes is a Certified Public Accountant who specializes in tax preparation, tax planning, and IRS compliance for individuals and businesses. Unlike general tax preparers, a CPA has passed state licensing exams, can represent clients in IRS audits, and provides strategic advice to minimize tax liability — not just file annual returns.
Are Tax Preparation Fees Deductible?
For businesses, yes — tax preparation fees are generally deductible as an ordinary and necessary business expense. For individuals, the deduction for tax preparation fees was eliminated under the Tax Cuts and Jobs Act of 2017 and cannot be claimed on federal returns through at least 2025. Business owners can still deduct the portion of fees related to their business taxes.
What Is Tax Planning?
Tax planning is the proactive process of analyzing your financial situation to legally minimize your tax liability. Rather than reacting to taxes after the year ends, tax planning involves strategic decisions throughout the year — such as timing income and expenses, maximizing deductions, selecting the right business structure, and using tax-advantaged accounts — to reduce what you owe.
What Business Expenses Are Tax Deductible?
Common deductible business expenses include rent and utilities for your office, employee salaries and benefits, advertising and marketing costs, professional services (accounting, legal, consulting), business insurance, vehicle and travel expenses for business purposes, equipment and technology, meals (50% deductible), and professional development costs. The IRS requires expenses to be ordinary and necessary to qualify.
What Is a Fractional CFO?
A fractional CFO is an experienced Chief Financial Officer who works with a business on a part-time or contract basis rather than as a full-time employee. Fractional CFOs provide high-level financial strategy, cash flow management, forecasting, and reporting — giving small and mid-sized businesses access to CFO-level expertise without the cost of a full-time executive hire.
What Does a Fractional CFO Do?
A fractional CFO manages a company’s financial strategy on a part-time basis. Key responsibilities include cash flow forecasting, financial reporting, budgeting, identifying cost savings, advising on business structure, preparing for audits or funding, and providing data-driven guidance to business owners. They function as a strategic financial partner without the overhead of a full-time hire.
