Bonus Edition: What Is a CPA, and Do You Need One?
Welcome to the first bonus edition post. In this post, we’ll be discussing the role of a CPA.
Most people have heard the term “CPA” before, but many are not entirely sure what a CPA actually does — or whether hiring one is worth the cost.
Some people assume CPAs only prepare tax returns during filing season. Others think CPAs are only for wealthy individuals or massive corporations. In reality, the role of a CPA can be much broader, and depending on your situation, working with one can save you significant time, stress, and money.
What Is a CPA?
CPA stands for Certified Public Accountant.
A CPA is an accounting professional who has:
- Completed extensive education requirements
- Passed the Uniform CPA Examination
- Met experience requirements
- Maintained continuing education requirements to keep the license active
In short, a CPA is a licensed professional held to professional, ethical, and continuing education standards.
While many accountants are excellent at what they do, not every accountant is a CPA. The CPA designation signals an additional level of testing, regulation, and professional responsibility.
What Does a CPA Actually Do?
This is where things become more nuanced because CPAs can specialize in very different areas.
Some different areas CPAs may focus on are:
- Tax preparation and tax planning
- Small business consulting
- Bookkeeping and payroll
- Audits and assurance services
- Financial statement preparation
- Business valuations
- Estate and succession planning
- CFO or fractional advisory services
Some work with individuals. Others work almost exclusively with businesses. Some work inside corporations, while others operate public accounting firms.
The term “CPA” describes the license — not necessarily the exact services provided.
Now that you have an understanding of a CPA’s role, let look at when you wouldn’t need one and when you should consider one.
When You Probably Don’t Need a CPA
Truthfully, many people do not need a CPA for basic tax filing.
If your situation is relatively straightforward — for example:
- One W-2 job
- Standard deduction
- Basic investment income
- No business ownership
- No multi-state issues
— tax software may be perfectly sufficient. And to be quite honest, it will get you the same answer as a tax professional.
As a CPA, I’ll be the first to say that not every person needs to pay a professional hundreds of dollars for a simple return if software can reasonably handle it.
That said, some people still prefer the peace of mind, convenience, or ability to ask questions throughout the year — and there is value in that too.
When a CPA Becomes Much More Valuable
The value of a CPA tends to increase as financial complexity increases.
A CPA may become significantly more beneficial if you:
- Own a business
- Freelance or receive 1099 income
- Have rental properties
- Operate in multiple states
- Need tax planning
- Are considering an entity change (LLC, S-corp, etc.)
- Have large investment activity
- Need retirement or succession planning
- Want help understanding financial decisions before making them
One of the biggest misconceptions people have is that tax savings occur when a CPA prepares the return.
In reality, the biggest tax savings usually happen months before filing season through planning and strategy.
Good CPAs often help clients:
- Structure businesses more efficiently
- Avoid preventable tax mistakes
- Improve recordkeeping
- Plan retirement contributions
- Manage cash flow
- Navigate changing tax laws
- Reduce stress during tax season
In many cases, the right advice can save far more than the fee itself.
A CPA Is More Than Just Tax Filing
One of the most valuable things a CPA can provide is perspective.
Business owners and individuals often make financial decisions in isolation without understanding the tax consequences, cash flow impact, or long-term effects. Having a trusted advisor who understands both the numbers and the broader financial picture can help prevent costly mistakes.
Sometimes the value is not just in saving taxes — it’s in helping someone make a better overall financial decision.
The Right Professional Matters
Not every CPA is the same.
Some focus heavily on compliance and filing returns. Others focus more on proactive planning and advisory services. Some specialize in industries like construction, agriculture, healthcare, or real estate.
The best fit usually depends on:
- Your complexity
- Your goals
- The level of guidance you want
- How proactive you want your advisor to be
A good relationship with a CPA should feel collaborative — not transactional.
Time to Take Action
So, do you need a CPA?
Maybe not.
But if your finances, taxes, or business are becoming more complex, having the right professional in your corner can often save time, stress, and costly mistakes.
The key is understanding that a CPA should not simply be someone who files paperwork once a year. At their best, they act as advisors who help clients make smarter financial decisions throughout the year.
And sometimes, avoiding one major mistake is worth far more than the fee itself.
– Brendan Tiedeman, CPA, CVA
Disclaimer:
This article is for educational and informational purposes only and should not be considered tax, legal, financial, or accounting advice. Individual circumstances vary, and readers should consult with a qualified professional regarding their specific situation before making financial decisions.
