Difference Between a CPA and a Tax Preparer

When filing taxes as an individual or a business you have options.  If you have a simple return, you may consider filing your taxes yourself.  However, if you have a more complex tax situation you may consider seeking a tax professional nearby.  There are several different options when it comes to hiring a tax professional to handle your sensitive information.  There should be several things you want to consider based on your specific tax circumstances.

How to Choose a CPA or Tax Preparer?

What can a CPA do that an accountant can’t? CPAs are required to have a more extensive background knowledge, education, and experience in accounting versus a non-CPA tax preparer.  Some CPAs have to obtain a Master’s level of education and pass a series of exams to test their knowledge in different areas of accounting.  CPAs have to have a great foundational knowledge on tax law and the impacts that affect their clients based on state and federal regulations. As such, CPA tax preparer costs vary from case to case versus non-CPA preparers.

Non-CPA tax preparers usually only have to take a competency exam for the IRS to acknowledge their ability to prepare and file tax returns. This should be taken into much consideration when determining the complexity of your tax situation.

Choosing a CPA or Non-CPA Tax Preparer is all going to come down to comfortability.  If you feel confident in the persons knowledge, skills and abilities then it is a no brainer.  But you have to do your homework and research local tax accountants near you.  It also helps to ask friends who have similar situations for referrals.

Who can represent you in the event of an Audit?

Another significant difference between a CPA and non-CPA tax preparer would be their ability to represent clients in the case of an audit.  When the IRS comes you want to have the peace of mind that your representation has the foundational knowledge to represent and advocate on your behalf. The only non-CPA preparers that can represent a taxpayer in the event of an audit would be an Enrolled Agent.  Enrolled agents are eligible to represent taxpayers before the IRS. To become an EA, you have to pass a three-part IRS test covering individual and business tax returns or you have to have experience as an IRS employee. Tax Attorneys will also be able to represent a taxpayer in the event that an audit is presented. It really depends on the complexity of the tax circumstances who a taxpayer entrusts that responsibility to. 

Ongoing Assistance year-round CPAs equals stability and consistency

CPAs are required to be knowledgeable in multiple areas as it pertains to tax. This knowledge base allows for a wide variety of CPA services to be offered by CPA firms. Having a well-rounded picture of a client’s financial standing allows for services to be customized to fit each client’s specific needs.

What does a CPA do on a daily basis? Most CPAs work year-round to provide services in the off season as well as during the traditional tax season. It is more advantageous to tax clients that they have a continuous relationship with their local professional CPA. It allows for familiarity and provides reassurance when situations change that may influence the outcome of a client’s tax return. Traditionally, non-CPA preparers work seasonally and there is little to no certainty of a continuation of services from year to year.

CPAs for Individuals and Businesses Near Jackson MS

Why choose Watkins & Company CPAs:

Offering services in Madison, Flowood, Jackson, Pearl, Brandon and Clinton Mississippi all year round.

  1. Client focused
  2. Tax law based
  3. Secure
  4. Top of the line technology
  5. Offer a wide variety services
  6. Have a host of experienced tax professionals 

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