3 life events when you should absolutely hire a CPA

When you experience a life-changing event, your cash flow and tax bracket are probably the last thing on your mind. But the reality is that some of the most stressful (or the most rewarding) times of your life will probably be accompanied by an aftershock to your finances. This financial shakeup, whether for better or worse, can be overwhelming. Who wants to sort through paperwork and learn about financial loopholes when you've got big life decisions to make? This is where a CPA (Certified Public Accountant) comes in. Getting a CPA can help guide you through complicated times, so you come out on the other side in the best financial position possible.

I know what you might be thinking: Can't technology help? It's true, there are several consumer software programs that can assist with accounting, bookkeeping, tax filings, and more. Some of these applications are even quite good. However, there are certain life events where I would strongly recommend that almost everyone employ the services of a CPA. You'll thank me later.

1. Starting a new business or renting a property for the first time

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There are a lot of critical decisions to be made when starting a new business, as well as rules and regulations to follow. Even if you've done your own research, it is judicious to run your ideas past a CPA (in addition, accounting services are often deductible business expenses, so that helps soften the blow). Most CPAs also offer ongoing business services for functions like payroll and tax filings, in the event you aren't comfortable doing them yourself.

Similarly, if you are thinking of becoming a landlord for the first time, you need to be informed of the tax implications before you start signing leases. And a CPA can help ensure you are taking advantage of all the deductions available to you.

2. Death of a loved one

The death of a family member has financial and tax implications — I realize it's a morbid thought, and it's probably the furthest thing from your mind when you're grieving. Of course, the specific effect of a death depends on your relationship to the deceased. In some cases, as when there is a surviving spouse, the financial implications may not be overly complicated and many people won't require the services of a CPA. However, in other instances, death triggers a new tax entity, called an estate, which requires its own tax return every year until the estate is closed. Additionally, a CPA can give valuable advice in the event that you receive an inheritance. When you lose a loved one, take care of the things that are most important first, but file in the back of your mind that it's prudent to speak with a CPA about how it will affect you financially as well.

3. Divorce

Divorce or separation is another stressful life event and — you guessed it — there are major financial implications that come with it. Things can get pretty ugly: I've seen disputes over which parent should claim a child as a dependent, issues with filing status, and concerns about the taxability of alimony or child support. Speaking with an accountant may be an afterthought when you are navigating a divorce, but the sooner you can do it, the more headaches you will (hopefully) avoid.

Depending on the complexity of your situation, you might also want to consider hiring a CPA when you're planning for retirement, selecting a college savings plan, setting up a trust, selling a large investment (ideally beforehand), or for assistance in estate planning.

Just as you wouldn't want a doctor to treat you when you aren't sick, most people don't need to run to their accountant at every financial crossroad. Big life changes like these, however, are usually rife with financial legalese and paperwork and, unless you know what you're doing, you can really find yourself at a disadvantage. And yes, CPAs might be expensive, but that expensive hourly rate will feel more like an investment when you can hand your financial worries off to someone else.

Of course, finding the right CPA can be a daunting task; there area lot of options! Word of mouth is usually a good starting point. Ask your trusted friends and family members for their recommendations. You can then look up those recommendations at your state's Board of Accountancy website. This quick name search will show whether a CPA's license is active and if he or she has received any professional discipline. After you feel satisfied with the credentials, it's important to select someone you feel comfortable talking with because you might find yourself seated in their office during some of the hardest times of your life. But you'll be able to take comfort in knowing that while everything else might seem unmanageable, you have someone on your side to help with your finances.