CPA vs Tax Preparer: What’s the Difference?

 Each year millions of Americans face tax season, knowing they must navigate filing their taxes and hoping they don’t owe the IRS money. Even if you have the simplest of tax returns, it often makes more sense to seek the help of a tax professional since the IRS rules change from year to year. 

You certainly don’t want to be in trouble with the IRS.

So, should you see a CPA or a tax preparer? CPA vs tax preparer, what’s the difference? Read on to learn more about the two and how they are different. 

What Is a CPA?

A certified public accountant or CPA is a licensed accountant. They have to seek their license from the American Institution of Certified Public Accountants or the AICPA. To become a CPA you must:

  • Get a bachelor’s degree
  • Get 150 hours of coursework with a focus on business and accounting
  • Pass the AICPA exam

When a CPA is ready to take the exam, it comes in four parts and they are given an 18-month window of time to pass all four parts to be certified. Anyone taking the test should be prepared to know auditing and attestation, business concepts, accounting, and reporting, and regulations of their state.

Most states also require CPAs to do additional continuing education courses annually and they must agree to act as a fiduciary. 

Why Choose a CPA for Your Needs?

You might choose to work with a CPA if you have more complex financial needs either personally or for your business. 

Of course, a CPA does assist with tax preparation, filing, and planning. But they also do more related to finance than just taxes. 

A CPA might also work on:

  • Bookkeeping
  • Financial planning
  • Prepare financial documents
  • Investments
  • Taxes
  • Mergers
  • Acquisitions

A CPA is likely to work on a complete financial plan versus just taxes specifically. 

What Is a Tax Preparer?

A tax preparer is a financial expert who focuses solely on the preparation and filing of tax documents. They could do this work for either an individual or a business. There are career benefits to focusing on taxes alone. 

Some tax workers will say they are tax preparers but do not have any type of certification. Certification requirements can even vary depending on the state or school. 

If you plan to use a tax preparer, you want to know about their credentials to do the work. 

Why Choose a Tax Preparer for Your Needs?

You might need a full range of financial services and a  CPA will certainly be more costly. A tax preparer will have a focus on taxes specifically and has their focus on the changes in IRS laws from year to year. 

During tax season, it might be faster and easier to also see a tax preparer. 

CPA vs Tax Preparer, What’s the Difference?

CPA vs Tax Preparer, both provide tax services and are well versed in tax preparation. If you plan to work with a tax preparer, you’ll want to make sure they have a certification that tells you they’ve received formal training in tax preparation.

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