8 Ways an Active CPA License Will Give You Supplemental Income
If you’re like most people, you’re probably looking for ways to generate additional streams of income. No matter how good the economy is doing, everyone could always use more cash. Although it’s not for everyone, becoming a certified public accountant (CPA) is a reliable way to generate income.
CPAs provide a variety of valuable financial services that require a high level of expertise. Getting your certification gives you the right to charge good money for your services. Have you casually thought about getting your active CPA license, but aren’t sure what services you’d like to provide?
The good news is you’re not stuck performing one job. If you’re looking for income and an active CPA license is still on the table, here are several ways your pursuit will pay off.
1. CPAs can work full-time or part-time.
Having your CPA license gives you the freedom to work full or part-time. If you’re self-employed, you can use your license to generate income alongside your main job. Or, you can turn your accounting services into a full-time income.
If you want to work for an accounting firm, there’s nothing wrong with that. You can still choose full or part-time work; however, you’ll have to work according to your employer’s schedule. On the upside, working for an employer means you won’t have to pay self-employment taxes.
You might make more money working for an accounting firm. For instance, say you pay an extra $5,000 in self-employment taxes each year. Although half of the self-employment tax can be written off, it’s a big expense for part-time work. Working the same number of hours for an employer at the same pay rate that you charge clients will save you that $5,000.
2. You can perform some services across state lines.
One of the biggest benefits to any job you can perform virtually is working across state lines. Most tasks you’ll perform as a CPA can be done virtually. However, not all states allow you to work across state lines. In fact, most U.S. states allow CPAs to work across state lines. But, they’re limited in the type of services they can perform. Attest services are rarely allowed to be performed across state lines.
Mobility laws give you a virtual advantage.
Most states in the U.S. have mobility laws that allow CPAs to work across state lines for nonattest services. This means a CPA certified in California can prepare a tax return for a client anywhere in the U.S. except Hawaii or the Commonwealth of the Northern Mariana Islands. In twenty-nine U.S. states, attest services can be performed across state lines. This covers services like audits and reviews.
Without mobility laws, a CPA would need to get licensed in their client’s state, notify the state board of accountancy, and pay more fees to serve their out-of-state client. CPA certification requirements vary by state, and it can be frustrating and stressful to take multiple CPA exams just to run your business partially online.
3. You can sit for the exam in a different state than you plan to practice.
Being able to sit for your exam in a state other than where you want to get licensed is a benefit for those who need to take the exam before relocating to their preferred state. For example, if you’re finishing college in Florida and plan to move to Colorado, you won’t have to wait until you move to get your certification.
The sooner you get certified, the sooner you can start making money with your license. Also, taking the CPA exam is stressful. You don’t want to be dealing with the stress of moving to another state on top of preparing for your CPA exam.
4. You can work as an internal or external auditor.
An external auditor is the most common job CPAs take after they pass the exam. It’s not the most profitable position, but it will give you the experience to increase your value as a CPA.
As an external auditor, you’ll work for various accounting firms to audit their clients’ financial statements. However, you won’t be considered an employee of the company and will be required to remain an independent contractor when you perform the audits. This is to prevent any conflict of interest.
If you work as an external auditor, you can expect to spend plenty of time traveling to work with various businesses across a wide range of industries.
Internal auditing positions are less common.
One of the lesser-known jobs held by CPAs is an internal auditor. An internal auditor is responsible for auditing an organization’s internal financial records and reports all findings to the business owner or manager. An internal auditor works for a corporation for a limited time.
5. Working as a tax professional is profitable.
Nearly everyone in the United States has to pay income taxes. Even though the IRS usually knows how much money each person makes during the year, most people must file an income tax return.
For those who earn lower wages as a W-2 employee, taxes can be as simple as using automated tax filing software for both state and local income taxes. However, someone dealing with investments for the first time, an inheritance, Bitcoin earnings, or a complicated tax situation needs a tax professional’s help.
If you’re not turned off by regularly dealing with tax law, you can make a good amount of income as a tax professional, whether you work for a corporation or remain self-employed.
6. With enough CPA experience, you can become a coach.
Providing CPA coaching services shouldn’t be the first job you set your sights on when getting your CPA license. However, please keep it on the back burner because once you gain enough experience in your field working as a CPA, you’ll be qualified to coach others.
Many people pursue a CPA license thinking they’ll be happy with a career in accounting but realize that it’s not what they want to do long-term after a while. That situation may arise for you and knowing that you can use your experience to coach others in their career is a relief.
You’ll work extremely hard as a CPA consultant or coach, so it’s not that the workload will be less. However, if you don’t particularly like looking at financial statements all day, working as a coach will help you break out of that box. As a coach, you’ll develop relationships with people. Your work will focus more on your clients than on your clients’ financials.
7. You can charge friends and family for your services.
It happens to every professional. Friends and family expect free or discounted services and advice. When you get your CPA license, expect people you know to ask for your help without paying your usual fees.
Whether or not you give in to their request is up to you. However, if people ask you for basic advice that you are qualified to give, charge them $20 for your time. Even if your advice only takes ten minutes to give, charge something for that advice. You won’t get rich off of those payments, but you will pave the way for the possibility that they’ll become a genuine paying client.
Once you give a friend or family member good advice that helps them, they might contract with you for your professional services later.
8. You can launch a monetized YouTube channel.
Like coaching CPAs, you can launch a YouTube channel designed to share tips, tricks, and advice with other CPAs. Share tips and tricks with the general public to improve their organization and make tax time easier.
Once you’ve gained enough real-world experience to develop your own systems and strategies for efficiency, you can share your findings. Collect followers to qualify for monetization and then maintain the quality content.
Once you become a licensed CPA, keep learning.
Getting your CPA license isn’t the end of your educational journey. Once you receive your license and start taking on clients, don’t forget to continue your education in any way possible.
Read books and listen to podcasts published by experts. Take more courses in your area of expertise. Continuing your education will contribute to making you a better accountant, tax preparer, or auditor.