EAs are often more affordable and just as qualified as CPAs when it comes to IRS audits, collections, and appeals. The team works with Intuit’s Tax and Bookkeeping experts, recruiters, and thought leaders. It provides valuable resources, insights, and opportunities to help people achieve their career goals and business ambitions. This content is part of a larger collection of resources on becoming a tax preparer. Anything you may want to know about the process, salary expectations, work expectations, and more can be found in the guides within this collection.
What’s the Difference Between a CPA, an EA, and a General Tax Preparer?
- EAs are tax specialists with unlimited rights to represent taxpayers before the IRS.
- If your business is in growth mode or you need ongoing financial insights, a CPA’s broader accounting knowledge and strategic mindset will be invaluable.
- Their rigorous education and examination process covers a wide spectrum of financial disciplines, including accounting principles, auditing standards, general business law, ethics, and taxation.
- I live in California but have rental property in Nevada, and they handled the multi-state situation perfectly.
- Becoming a licensed CPA requires passing the 4-part Uniform CPA Examination and meeting other state-specific requirements.
Anyone can become a tax preparer with minimal barriers to entry, which is why the quality and expertise can vary significantly. In short, a licensed CPA offers full-spectrum financial guidance, not just tax filing. Knowing that a qualified professional is overseeing your financial matters can alleviate stress and ensure that your tax obligations are met accurately tax preparer vs cpa and on time.
- There are a few different kinds of tax specialists you may be able to employ.
- Department of the Treasury, granting them nationwide practice rights for federal tax matters.
- But EAs tend to lack the broad financial knowledge that CPAs have.
- For people with simple tax returns or more time than money, it makes sense to use TurboTax or some other tax preparation software to file their taxes.
- The experience requirement varies by state but generally ranges from one to two years.
Which type of tax professional is right for my business?
Not every tax professional offers the same level of training or authority. CPAs are licensed at the state level and must pass a rigorous exam, meet education standards, Bookkeeping for Startups and complete continuing education. Enrolled Agents (EAs) are licensed by the IRS and specialize exclusively in taxes.
Understanding Your Unique Situation
Book a demo today to see what running your business is like with Bench. Our intuitive software automates the busywork with powerful tools and features designed to help you simplify your financial management and make informed business decisions. Not sure where to start or which accounting service fits your needs? https://www.bookstime.com/ Our team is ready to learn about your business and guide you to the right solution. The strategies will depend on a client’s sources of household income (W-2, 1099, K-1, business income), the amount of household income, as well as the client’s industry (if a business owner). The final product of a tax strategist’s work is often called a “Tax Plan”.
- CPAs have the skills and knowledge to handle tax planning, financial analysis, legal compliance, and even representation in case of an IRS audit.
- In most cases, a noncredentialed tax preparer can only represent clients in front of the IRS regarding returns they personally prepared and signed.
- Need someone to help you plan for the future, not just survive tax season?
- CPAs offer a wide range of financial services beyond tax preparation, including auditing, financial planning, and business consulting.
- CPAs are licensed at the state level and must pass a rigorous exam, meet education standards, and complete continuing education.
- This certification is maintained through ongoing professional education, ensuring CPAs stay abreast of the latest in accounting and tax laws.
A Spectrum of Expertise: Differentiating Between Various Types of Individuals Who Prepare Taxes
However, not all “accountants near me for taxes” are created equal. Some might be seasonal preparers, while others could be fully licensed CPAs or EAs. Here’s what you must consider if you’re focused on local accountants.
CPAs Can Save You Time
The Board of Accountancy sets the standards for certified public accountants and issues licensure for the state. Engaging a professional transitions your tax management from a reactive, annual scramble to a proactive, ongoing strategy. The best tax professionals offer guidance throughout the year, advising on the tax implications of major financial decisions before they are made. This empowers you to make informed choices that optimize your tax position long before tax season arrives. Professional designations are not mere titles; they represent a commitment to rigorous standards, ongoing education, and ethical conduct.
A Little Message from the MB Group: Tax Planning
Typical EA responsibilities include representing business or individual clients in tax audits, tax appeals and tax collections. Additionally, EAs can also provide tax advice, tax return filing and more. Now that you understand the distinct roles, qualifications, and services of CPAs and tax preparers (including EAs), the next step is to apply this knowledge to your unique financial situation. Many professional tax preparers, especially EAs and AFSP participants, can assist clients in responding to routine IRS correspondence and inquiries. They can help interpret the notice, gather necessary documentation, and draft a clear, compliant response, often resolving issues without the need for formal representation.
Finding the right help can make all the difference in your experience. In this article, we’ll help you choose between a tax preparer and a CPA. For many of the clients we work with, it can take upwards of 20-plus hours to build a comprehensive tax plan.