Have you finally gotten your big break? No matter whether you found sudden fame by going viral or scored a plum role in a movie, you've entered a new world. And one person that you now need more than ever is a certified public accountant (CPA). Why is a CPA a vital part of your team? Here are five of the most important reasons.
1. Your Taxes Change.
A sudden jump in income brings with it a likely sudden jump in taxation. The unprepared taxpayer could find a big portion of their windfall eaten up by taxes if they fail to plan ahead. A CPA will evaluate your income changes and recommend the best legal strategies to reduce your tax rate.
2. You May Need a Business Entity.
The formation of a business entity helps you in many ways. It protects your privacy, facilitates tax reduction, and protects you from risk. But if you are new to forming a business entity, making the wrong choices could cost you dearly. And even worse, you may not even know you need one. While you should engage a lawyer to analyze the legal ramifications, an accountant will help you avoid bad financial consequences.
3. You'll Be Publicly Scrutinized.
Anyone who becomes suddenly famous (or infamous) is now subject to the court of public opinion. If you invest in a questionable company because you don't know how to analyze them, you could lose your fan base. A failed business venture could paint you in a negative light. And you could be branded a cheat if you fail to pay all your taxes. Accountants help avoid such pitfalls that can damage your reputation.
4. They Can Vet Opportunities.
You may be presented with many new opportunities, but not all of them will be good choices. The wrong investment could cost a big chunk of your newfound money. Estranged family or friends are likely to show up and want "a piece of the pie." That plum role in a movie or series? An unfair contract may result in you actually receiving a fraction of what you expect. Your CPA can help dig into such opportunities to weed out the potentially catastrophic.
5. They Are a Confidante.
Who can you talk to about your sudden life change? This group may become smaller as you become more famous or earn bigger paychecks. Your accountant works for you, and they must adhere to the ethical requirement of their industry. This makes them a team member who you can discuss confidential matters with and get professional and unbiased feedback.
Working with a certified public accountant is one of the most important steps you can take to protect yourself and your sudden wealth. Learn more by making an appointment with an experienced CPA in your area today.