North Carolina CPA: Frequently Asked Questions & Expert Answers

Jennings Smith CPA receives many accounting and tax-related questions throughout the year. 

Here are expert answers to some of our most frequently asked questions about North Carolina CPAs, from a certified public accountant in Greensboro, NC.

Why should I hire a CPA to handle my complex tax work?

The State of North Carolina requires a certified public accountant to have at least 30 hours (10 classes) of collegiate-level accounting credits. In addition, the accountant must receive a passing score on a rigorous four-part uniform CPA examination.

To retain a CPA license, a CPA must complete 40 hours of continuing education each year, including a mandatory annual ethics class. In addition, many CPAs specialize in specific areas of accounting, such as taxes, audits, or consulting, making them well-suited to complex accounting needs.

My CPA never calls or returns my messages about tax-saving strategies. Will you be any different?

Most CPA firms base their production and utilization on an hourly rate. A single CPA in a firm serving individuals and small businesses may assist up to 700 clients with annual tax filings. With such a large client load, there is no time for tax planning or proactive client engagement.

I offer a unique, personalized approach. My firm is classified by some as a “boutique” accounting firm. I focus on providing excellent customer service and responsiveness by maintaining a smaller client base.

This personalized service does come with higher fees than some of my competitors charge. However, if you want a highly proactive and responsive CPA, I am here to help. I do not outsource my tax work or hire seasonal contractors.

I saw on social media that I need to set up an S-Corp to save on taxes immediately. How soon should I do this?

A lot of social media advice is baseless. As they say, always consult a professional. Here are some basic areas where S-Corps are beneficial:

• You have a successful sole proprietorship or partnership with a documented history of at least $50,000 in profits.
• You are already keeping, or are ready to maintain, your books and records in good shape with a bookkeeper or bookkeeping software.
• You’re currently enrolled in, or willing to enroll in, a payroll provider’s program to run your required payroll.
• You understand that accounting fees will increase due to the requirement to file additional tax returns annually.

And here’s where S-Corps do not work:

• You hold real estate as your primary source of income for your business or venture. If so,  you should not put real estate in an S-Corp without consulting a tax advisor.
• Your business is just getting started, and you do not know if it will make it more than $50,000 a year.
• You are not willing to perform bookkeeping or handle the required payroll.

I heard I can get a ton back in taxes if I buy and open a short-term rental. Is this true?

The answer is yes in some cases, but only if you follow the rules. View my page on short-term rental information. 

However, here are the highlights:

• You must maintain material participation in the property.
• You currently have additional sources of taxable income to offset the loss from the short-term rental. No tax credits are available from short-term rental write-offs.
• You’ll need a cost segregation study performed by a specialist to maximize bonus depreciation in the first year of ownership.
• You rent the property on a short-term basis with an average stay of 7 days or less per stay.

Have additional questions that I haven’t answered? Schedule a consultation with me online!