Starting your own business is highly complex, especially when it comes to managing taxes and finances. As the founder of a startup, you are already involved in making business growth planning and strategies. Therefore, you need a bookkeeper or a tax preparer offering taxation services. However, choosing a CPA in Saugus, MA is a complex process. If you are confused about whom to hire, we have got you covered. This article highlights the difference between a bookkeeper and a tax preparer. Here we go! 

Who is a bookkeeper? 

They are financial experts responsible for recording the financial transactions of a business. It includes expenses, purchases, sales revenue, payments, and invoices. 

These professionals also prepare reports for trial balances and managers to assist accountants. They also record financial information in the general ledger used for producing income statements and balance sheets. 

Services of a bookkeeper 

Major services performed by a bookkeeper include: 

  • Recording transactions, including expenses, purchases, sales, revenue, invoices, and payments. 
  • Maintaining financial records, including keeping up with the general ledger. 
  • Managing everyday cash flow to understand incoming and outgoing income. 
  • Reconciling bank statements, including comparing the monetary exchange. 

Who is a tax preparer? 

An expert who helps people and companies prepare and submit their tax returns to the relevant tax authorities is known as a tax preparer. Tax preparers might be employed by tax preparation companies or be independent contractors like accountants, enrolled agents, or tax attorneys. 

They assist clients in maximizing deductions, credits, and tax benefits while guaranteeing compliance with tax rules since they are informed about tax laws, regulations, and filing requirements. In order to minimize errors, assist customers in precisely and effectively fulfilling their tax obligations, and guide them through the tax preparation process, tax preparers are essential.

Services of a tax preparer 

Major services performed by a tax preparer are: 

  • They accurately file taxes and complete them timely, minimizing deductions and credits.  
  • Offer advice to reduce tax liability and determine tax-saving opportunities. 
  • They are responsible for compliance with tax laws and regulations. 
  • Guides you about various investment options, retirement planning, and estate planning. 

Wrapping Up 

Both bookkeepers and tax preparers are financial experts. They guide you through the complex taxation process and manage your books. They ensure you do not have to pay any penalties for missing tax deadlines.