Do I Need a Personal Accountant?

After years in a cubicle, you’ve jumped head-first into solopreneurship. Or you’ve finally landed your dream job—and your dream salary. Maybe you’ve decided to take up a side hustle or rent your property, or you’ve received a large inheritance.

But along with the liberation that finally comes with striking out on your own or the pride in earning more comes a larger responsibility of making sure your money is working as hard as you are.

Is it worth hiring a professional to help you with things like self-employment taxes, estate planning, and stock options, or is it better to handle them on your own?

The answer may depend on a number of factors, including your financial acumen, money-management needs, and whether you’re the hands-on (or hands-off) type.

The types of accountants are as varied as the kinds of services they offer, ranging from the neighbor who’s good with numbers to a large-firm CPA who deals with Fortune 500 clients.

Here are some ways to help find a good match for your needs.

Table of Contents
  1. What Type of Accountant Do I Need?
  2. What Financial Issues Can a Personal Accountant Handle?
    1. For Independent Contractors and Solopreneurs
    2. For Small Businesses
    3. For Individuals
  3. Options for DIY Accounting

What Type of Accountant Do I Need?

The term “accountant” is sometimes used as a catch-all phrase to refer to any professional who deals with financial transactions or taxes, but there are different types of accountants—bookkeepers, accountants, and Certified Public Accountants (CPAs)—with different skill sets and varying limits on what they can and can’t do.

A CPA earns the accounting corner office because they are certified to do everything a general accountant or bookkeeper can do, along with one important addition—government permission to file taxes on a client’s behalf and represent them in case of an audit.

Becoming a licensed CPA requires passing the Uniform CPA Exam and completing continuing education hours each year to maintain their certification. CPA fees can range anywhere from $30-$500 an hour .

An accountant without CPA certification cannot sign tax returns on behalf of a client, but they can prepare them. An accountant also can record and report detailed financial transactions and provide analysis.

Most accountants hold an undergrad degree—although it doesn’t necessarily have to be in accounting—and many pursue additional certifications such as Certified Management Accountant (CMA) and Chartered Accountant (CA) . Like CPAs, their hourly rates can vary widely depending on location and expertise, but on average charge $20 per hour .

Finally, a bookkeeper is someone who, literally speaking, can help keep your books. They’re often the ones in charge of all the money moving in and out of the business, and responsibilities can include paying bills, keeping track of account balances, recording transactions and providing reports throughout the year.

Bookkeepers aren’t required to hold an accounting degree, but some organizations and businesses do offer certification, including a Certified Public Bookkeeper (CPB) certification, which means the bookkeeper has passed an advanced skills exam and is required to take continuing education.

Bookkeepers might also handle payroll and other business taxes, although they aren’t allowed to sign tax returns or provide audit representation.

According to FinancePal, bookkeeper fees average around $18-$23 per hour depending on experience and services offered, but numbers can vary widely.

What Financial Issues Can a Personal Accountant Handle?

Accountants can be experts in money-management topics across the board, getting the most out of taxes, and helping navigate complicated financial situations.

Beyond that, how an accountant can help depends on your individual financial needs. Here are some specifics on which type of accountant is best for specific needs.

For Independent Contractors and Solopreneurs

Finances can get complicated for independent contractors and solopreneurs, from managing invoices to tracking inventory to keeping one eye on the big business picture. For party-of-one businesses, an accountant can assist with most things money-related so that the business owner can focus on the business.

Although a non-certified accountant can’t file your taxes on your behalf, they can help you with business issues like tracking your deductions, calculating estimated tax payments, and ensuring that you reap the most benefit from your tax deductions (which include hiring an accountant). An accountant is also more likely to be on top of the latest changes in the tax law.

Another way an accountant could help independent contractors—especially right-brained creatives—is by handling all the organizational factors that come with running a business. Tasks that require a lot of left-brain activation, like invoicing, tracking sales, and tracking receipts, can feel overwhelming to someone who’s never taken business classes.

For Small Businesses

For businesses with more than one employee, an accountant with small business expertise can help with everything from determining the right business structure to filing taxes.

If you’re just starting out as a small business owner, an accountant could help with the financial segments of your financial plan. During day-to-day operations, a good accountant can help with everything from opening a business bank account to payroll to just providing guidance regarding government regulations or any changes in tax law.

If you hire a CPA, they can even file business taxes on your behalf.

For Individuals

For individuals, hiring an accountant may be a harder sell. But financial management can be more difficult than you think, especially with the advent of person-to-person payment and investment apps.

If you have a good number of financial ducks, a personal accountant can help keep them all in a row.

Perhaps the biggest reason someone hires an accountant is to help them with taxes, especially if they’re facing complicated tax situations like receiving a large inheritance, giving a large financial gift, correctly filing rental property, or navigating capital gains taxes.

But even for everyday life, a personal accountant can help turn your personal finance knowledge into action. It’s one thing to understand that you need to cut spending, but it’s another thing to actually put that lifestyle into practice.

The same goes for paying down debt. An accountant can help keep you on track.

Options for DIY Accounting

If going the DIY accounting route is more your style, options include researching basic and advanced concepts via online knowledge centers, enrolling in a course, or using smart, low- or no-cost money-management apps like a SoFi Money cash management account, which lets you track your spending, create a budget and pay bills all in one place.

And while the experts at SoFi can’t give tax advice (and we recommend for any tax advice you consult a tax professional), membership does come with complimentary access to financial planners for both hands-on and hands-off help.

This story first appeared on SoFi.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA  / SIPC .

SoFi Relay is offered through SoFi Wealth LLC, an SEC-registered investment advisor. For more information, please see our Form ADV Part 2A, a copy of which is available upon request and at www.adviserinfo.sec.gov. For additional information on SoFi Wealth LLC, SoFi Relay, and products and services of affiliates, see SoFi.com/legal.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
SOAD20002

Other Posts You May Enjoy:

5 Best Ways to Save for College

College is very expensive so saving up ahead of time is important. You’ve got several choices when it comes to saving for college - from 529s to Coverdell accounts - here are the best ways to save for college.

If You Want to Get Rich, You Better Do It Slowly

Slow and boring have their place. In fact, slow and boring are often some of the most reliable ways of doing anything. Whether you're building a house, growing your wealth, or just trying to get fitter - slow and steady wins the race.

Are There Bitcoin ETFs?

Bitcoin exchange-traded funds (ETFs) have existed on stock markets in Europe for years, reaching assets under management of $6.5 billion. In February 2021, one began trading in Canada, marking the entry of the first Bitcoin ETF in North American markets.

About SoFi

SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

Reader Interactions

Leave a Comment:

As Seen In: