Law Firms and Attorneys

CPA Firm for Law Firm Trust Accounts

The Florida Bar mandates meticulous accounting protocols for trust accounts, encompassing monthly reconciliations, detailed journals, and precise alignment of all cash with bank statements. While regulations may vary among state bars, the majority underscore the necessity for impeccable accounting. Partnering with a CPA specializing in law firms becomes imperative. As legal professionals, adherence to ethical standards is paramount. Engaging a CPA firm guarantees expert oversight of your trust account management, ensuring compliance and precision.

Interest on Lawyers Trust Accounts

Managing trust accounts is crucial as trusted guardians of client funds. Keeping your account records current, correctly distributing interest, and designating charitable donations is essential for ethical compliance with your state bar. The Florida Bar offers charity recommendations for the Interest on Trust Accounts Program, and we can adapt them to your preferences. We focus on dependable service that seamlessly meets your firm’s and clients’ needs.

Law Firm CPA Firms Help You Track Expenses

Poor expense tracking can lead to billing problems for clients and money loss for attorneys. Accounting firms that don’t specialize in law firms may not understand the importance of correctly tracking all expenses and assigning them to client-case combinations. Effective practice management systems make it easy for your staff to quickly identify the accounts for accurate client billing. Additionally, we ensure that any unbillable expenses are appropriately recorded, so you can claim all the deductions your firm is entitled to.

Want to write off expenses related to your car? You may need to track mileage – but we’ll make it easy for you.

Experienced CPA Insight into Your Law Firm’s Operating Agreement

Every law firm operates under a unique operating agreement tailored to the specific needs of its attorney owners. It is imperative that your accounting system aligns seamlessly with this agreement. Legal partnership structures and tax regulations often pose challenges, especially for multi-partner law firms. Even if you have a personal accountant, it’s advisable to engage a CPA specializing in law firms.

Consider involving us at an early stage. We can ensure that your business and legal objectives are aligned, preventing potential overpayment of taxes due to incorrect income categorization or restricted expense write-offs. Navigating the IRS Tax Code can sometimes lead to counter-intuitive interpretations of tax laws, making a CPA’s expertise invaluable during partnership formation or accounting system overhauls.

Manage the Tax Treatment of Staff Gifts

Gifting bonuses to junior staff members is a common practice among law firms to reward their top talent. Handling these incentives improperly can lead to unintended consequences. Mishandling may result in staff members not fully appreciating the contribution due to excessive tax withholding, or the bonus could be erroneously categorized as a non-deductible gift by the firm.

Given that law firm partners typically fall into a higher tax bracket compared to their staff, it becomes crucial to meticulously document and track these bonuses. Failure to do so can lead to an overpayment of taxes as the funds may be subjected to the firm owner’s higher tax rate instead of the employee’s lower tax rate.