PERSONAL ACCOUNTANT: Salary, Skills, and Roles of Personal Accountants

personal accountant

It is critical to managing your finances. You may have wondered if you needed a personal accountant at some point. You are not under any obligation by law to have a personal accountant. Having one, on the other hand, makes it easier to keep track of your finances and ensure that you’re making sound financial decisions. Let’s look at the cost of hiring the services of a certified personal accountant cost.

In general, a personal accountant will do your bookkeeping, assist you with bill payments, prepare your tax returns, and verify the accuracy of your bank and credit card statements. These are things that can cost you a lot of money if you don’t do them. Consider your credit and bank statements. They may have incorrect values. And if you don’t catch those errors right away, they can have a negative impact on your credit score and prevent you from obtaining credit, such as loans and mortgages.

The issue is that most people do not have the time to thoroughly examine their statements. And those who aren’t sure how to check for errors. Personal accountants can help with this.

How Much Does A Personal Accountant Cost

The cost of hiring professional personal accountant services to do your taxes varies depending on your circumstances and the tax forms you must file. If your tax situation is simple, such as working for a company and needing to submit W2s, hiring an accountant may be less expensive. An accountant may be more expensive if you work for yourself.

In either case, if you can afford it, there are advantages to having a professional prepare your taxes. If it does not save you money, it may save you time, as filing your taxes can take several days.

Cost and Consideration of a Personal Accountant 

The average fee for a certified personal accountant (CPA) to prepare and file a Form 1040 and state tax return with no itemized deductions is $220, while the fee for an itemized Form 1040 and state tax return is $323. If you are on self-employment and need a CPA to prepare an itemized Form 1040 with a Schedule C and a state tax return form, the average fee is $457.

It is critical to remember that these are average fees; the cost will vary if parts of your tax filings fall under exceptional circumstances and take the accountant longer to complete. Accountants may charge you more for consultations and overtime work in these cases.

Personal Accountant Services

Because every business is unique, good personal accountant services provide varying levels of service based on their needs. Let’s go over a comprehensive list of the services that a personal accountant can provide and how they can assist you in achieving success and making sound business decisions.

What are Personal Accountant Services?

Accountants, at a high level, measure, process, and communicate financial information about an organization and, in some cases, ensure compliance. They provide services ranging from internal functions such as entering transactions, reconciling accounts, and preparing financial statements to compliance functions such as preparing tax returns and performing audits. In a nutshell, accounting’s purpose is to ensure that an organization’s financial operations are properly tracked and that the results are accurately communicated to stakeholders.

Let’s take a look at what a personal accountant does.

#1. Bookkeeping

A personal accountant will keep track of your transactions, especially those involving personal finances. Utility bills, personal loans, credit cards, mortgage payments, travel expenses, and pretty much any other personal transaction fall into this category.

#2. Managing Taxes

Filling out tax forms and filing tax returns is never enjoyable. The good news is that you can avoid all of this by hiring a personal accountant. They will prepare all of your returns and advise you on the best time to file so that you do not incur penalties.

#3. Personal Financial Planning and Advice

Have you ever gone shopping for a dress and returned with shoes as well? Or went on a “budget trip” and returned with an empty wallet/purse? It happens to everyone, and sometimes more frequently than you’d like. Whether you’re a big spender or an impulse buyer, a personal accountant can help you break the habit and better manage your money.

#4. Provide Investing Advice

In terms of saving, a personal accountant can assist you in saving enough money to start a small business. As previously stated, they not only look for tax breaks, but they can also help you avoid spending money on things that aren’t necessary. When your cash reserve is large enough, you can (again) enlist the assistance of your personal accountant to help you invest it.

#5. Taking Care of Inheritance

Receiving an inheritance, especially a large one, can result in exorbitant inheritance taxes. Furthermore, you may face a very high tax rate on your income and property. If you have a personal accountant, they will advise you on what steps to take to ensure that you only pay what is necessary.

#6. Organizing Gifts and Donations

Some gifts and donations, like inheritance, are subject to taxation. The IRS mandates that any gift in excess of $15,000 (or $155,000 per year) be taxed. However, under certain conditions, you may be eligible for a tax exemption.

#7. Bill Payment

According to the Bureau of Consumer Financial Protection, only 21% of Americans pay their bills on time (November 2018). It’s not always a matter of a lack of funds. Some people simply forget to pay their bills until it’s too late. Others, particularly those who must make physical payments for one reason or another, are too busy to do so.

#8. Manage Payment Arrangements

A personal accountant will almost always work behind the scenes. For example, they will not meet with your landlord/lady to present a month’s rent check. A personal accountant, on the other hand, may take an active role and negotiate payment arrangements on your behalf in some cases. They can bargain with sellers to get you a better deal.

#9. Recommending Other Experts

If you have a problem that isn’t necessarily within their scope, a personal accountant can refer you to a qualified professional who can assist you. The majority of them have close relationships with people in similar industries. As a result, if you require the services of an insurer, banker, lawyer, money manager, investor, or other professional, the first person you should contact is your personal accountant. They will locate the appropriate person to address the issue.

#10. Examining the Legality of Transactions

Finally, and perhaps most importantly, a personal accountant examines financial records for accuracy and legal compliance. If you fill out a form incorrectly, such as a tax form, the best-case scenario is that you file an amended return with the IRS.

Certified Personal Accountant

While there is no official title for a Certified Personal Accountant, “CPA” is an abbreviation for “Certified Personal Accountant.” Accountants who have passed the national CPA exam are listed here. This rigorous exam is a four-part comprehensive exam that many accountants do not pass on the first try. Accountants are not required to have CPA certification, and many do not even take the exam. This does not preclude them from being a personal accountant for individuals or small businesses. Many jobs in accounting firms with business clients, on the other hand, require or expect accountants to obtain their CPA certification within a certain period of time after being hired.

What Are the Requirements for a Certified Personal Accountant?

The 55 certification-granting jurisdictions in the United States, including the 50 states, Washington, D.C., Puerto Rico, Guam, the Virgin Islands, and the Mariana Islands, have their own CPA requirements. CPA certification, on the other hand, requires 150 college credits and passing the Uniform CPA Examination in all 55 jurisdictions.

Other CPA requirements vary by jurisdiction, including age and residency requirements, ethics exams, and the number and type of accounting-specific credits required. Credit requirements for the CPA exam vary by the district as well.

CPA Educational Requirements

To become a CPA, you must complete 150 college credits, including 30 in accounting and 24 in business administration. A minimum of 15 credits must be upper-division or graduate-level. A typical bachelor’s degree is only 120 credits long, leaving each candidate with 30 credits to complete after earning their bachelor’s degree.

A master’s degree or a graduate certificate can be used to earn the additional 30 credits for a CPA. The number and type of accounting-specific credits needed to become a CPA differ by jurisdiction. Taxation, auditing, and managerial accounting are examples of qualifying courses.

Requirements for a Professional CPA

Professional CPA requirements differ from one jurisdiction to the next. Many jurisdictions require at least 12 months, or 2,000 hours, of paid or unpaid public accounting experience under the supervision of an accountant who holds a valid CPA license in a U.S. jurisdiction.

Professional accounting experience is typically obtained by CPA candidates in government accounting departments or businesses. Working in academia, on the other hand, may satisfy some or all of the professional CPA requirements in some areas.

What Does the Certified Personal Accountant Exam Cover?

The CPA exam is divided into four sections: regulation (REG), financial accounting and reporting (FAR), auditing and attestation (AUD), and business environment and concepts (BUSINESS) (BEC). Test takers are given four hours for each exam section.

Each section has five subsections, which are also known as testlets. All testlets contain 62-76 multiple-choice questions (MCQ) and 4-8 task-based simulations (TBS), which are case studies that evaluate real-world accounting competencies.

There are three written communication tasks in the BEC section (WCT). Each test-taker is required to write a professional document on a specific business scenario for these tasks.

Cost Of Personal Accountant

A personal accountant in the United States typically charges between $30 and $300 per hour. Some accountants charge by the hour for consultation services, short-term assistance with bookkeeping issues, or one-time assistance with setting up new accounting software.

Accounting costs:

National average cost$50 per hour
Typical range$30-$300 per hour

Set up a free consultation with an accounting professional to get a more accurate picture of the cost of a professional personal accountant.

Conclusion

Many people are hesitant to hire a personal accountant or financial advisor. I understand because most service providers charge so much money that it isn’t even worth it to use their services. The same could be said for a personal accountant. Remember, you could use their service for a few months and get educated on how they can help you manage your finances before letting them go; in the end, it’s all up to you.

Frequently Asked Questions

Who is a personal accountant?

One who keeps, audits, and inspects individual or business financial records and prepares financial and tax reports.

What are the 4 types of accountants?

What Are the Different Types of Accountants?

  • Staff Accountant. A staff accountant is a great option for anyone who has a bachelor’s degree in accounting and who wants a variety of work. …
  • Certified Public Accountant.
  • Investment Accountant.
  • Project Accountants.
  • Cost Accountant.
  • Management Accountant.
  • Forensic Accountant.
  • Auditor.

At what point do you need an accountant?

Choosing the Best Accountant

A part-time accountant may be all you need to prepare quarterly and year-end tax forms. Alternatively, you may prefer an all-in-one CPA for routine accounting tasks, financial advice, and tax planning. In any case, a good accountant is a must.

Is hiring an accountant worth it?

Those with a single employer and few investments may save hundreds of dollars by preparing their own taxes, whereas those with business income or rental properties may find that the cost of hiring an accountant is worth the peace of mind and potential tax savings.

How do you do personal accounting?

To begin creating a personal budget, list your fixed monthly expenses (such as rent and utilities) as an expense on the first day of each month, along with your expected income for that month. You can then deduct or add other incomes or expenses as needed throughout the week or month.

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