Should you call a lawyer or an accountant?

It's important to know when to query an accountant as opposed to a lawyer.

There are many professional service providers available to small businesses. This means you are never more than a few clicks or phone calls away from caring service providers capable of joining your team to assist you with all the various pieces of running a business. We know that sometimes, it's hard to discern which service provider is the right one to assist with the specific challenge you currently face.

It is important to know which service provider to query for the task at hand. There are practical, ethical and legal reasons at play here: In September, the Australian Tax Office (ATO) took legal action against four big companies it said had been fraudulently using multinational law firms to handle tax matters, which made them appear to be shielding their financial affairs from the government.

So with efficiency and good ethics in mind, when do you need an accountant — and when do you need a lawyer? Read on for an overview.

An accountant
Even under this umbrella, the profession includes several different types of accountants. There are many specialties within the field, ranging from tax specialists to financial advisors.

A chief distinction comes in when considering the differences between an accountant, a CPA and a tax lawyer.

An accountant is someone without a formal Certified Public Accountant (CPA) designation. This person might have an undergraduate or even a graduate degree in accounting but not have passed the exams to earn the CPA designation. An accountant can help you with tasks that include:

  • Allocating Goods and Services Tax (GST)
  • Reconciling bank statements
  • Setting payroll
  • Preparation of Business Activity Statements (BAS)
  • Taxable Annual Payment Reports
  • Preparing depreciation schedules and rental property worksheets
  • Setting up Self-Managed Superannuation Fund

A fully qualified CPA, meanwhile, has completed not only all accredited university programs approved by CPA Australia, but also specific post-tertiary coursework and exams. A CPA can help with higher-level functions such as:

  • Business and compliance issues
  • Choosing business structures for start-ups
  • Creating sustainable business models
  • Ensuring reporting obligations are handled

A tax attorney
If you are anticipating a dispute, or are already involved in a confusing tax situation or audit, it may be wise to consult a tax attorney.

Tax attorneys are lawyers who have completed law school with a focus on tax law. They can help you determine the rights and duties the law affords and asks of your business as an entity.

If you are ever uncertain about which kind of tax or accounting professional can best address the needs of your small business, the talented team at WMC Accounting can help you assess your situation and guide you to the best-fit service provider for your specific needs. Our team can discuss your options, so do contact us today.

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