2020 Q4 PR Tax Returns, W-2's, and 1099-MISC Deadline is January 31st, 2021
For the most part, there isn’t too much of a difference between a bookkeeper and an accountant. They can both do what we call the day to day bookkeeping – data entry, reconciliation, closing the books and preparing the data for the tax return.
An accountant is a Certified Public Accountant (CPA) and is trained to do what you might call higher accounting. In addition to doing the regular day to day bookkeeping, a CPA can do tax audits, taxes and adjustments to the bookkeeping file.
Depending on the experience of the bookkeeper, they can also prepare taxes and do adjustments to the bookkeeping file; however, they cannot do tax audits.
The accountant/bookkeeper and client relationship is a very important one that should not be decided upon lightly. There is an amazing amount of trust that goes into this relationship and it’s important to make sure that the fit is a good one.
When making this choice, talk to more than one person, ask around, check out their website and take a look at their reviews. You can also ask for references.
Do your homework before you sign any contracts and read the fine print. If you feel that the person or company is not going to be a good fit, then go with your instincts and keep looking.
It’s important to know that there is a difference and what the qualifiers are for each type. In brief:
A W-2 Employee is someone that you would direct the how, when, why and where for the work that they do for you. In other words, you tell them what their work schedule is, where they are supposed to work and how they are supposed to do the work for you. An employee gets paid with a paycheck and is sent a W-2 at the end of the year.
An independent contractor, on the other hand, is someone that you do not tell the how, when, why and how of the work that they do for you. You may need to give them some direction on what the work may entail, however, you pretty much let them know there’s work, they access it, do the work and get it back to you. They do the work during hours that are convenient for them. An independent contractor is paid via check and they receive a 1099-MISC at the end of the year (if applicable).
There are many differences and similarities between these two Intuit products. More than we can review here in a FAQ page. Depending on your company needs, one might be better than the other for you. Give us a call and we’ll be happy to review the differences with you.