It’s no secret that tax season can be a stressful time for many, which is why a taxpayer may decide to hire a tax professional to relieve them of the stress and headaches. Whether you own a small business with finances on the books year-round or simply need help with tax preparation in Elkhorn, WI, it’s a good idea to educate yourself on the difference between CPAs and tax preparers.
Type of Education
While accountants and tax preparers sound like similar roles, there are differences when it comes to the level of required education. Certified professional accountants (CPAs) are accounting professionals who are looked at as reputable and trustworthy with financial information. Accountants, CPAs, have a college education and, at a minimum, they possess a bachelor’s degree in accounting.
As a tax preparer, he or she may or may not have gone to college to obtain a degree in the field of accounting. Instead, many tax preparers benefit from professional training offered through their place of employment at a tax preparation center.
Even after earning an accounting degree, further certification is required to become a CPA. They must pass a qualifying exam testing their knowledge in a number of accounting practices consisting of not only accounting but also business law, personal finance, audits and taxes. CPA certification requirements are rightfully demanding with the reward of respect within their field.
One does not have to be a CPA in order to seek out a career as a tax preparer. Although not issued a professional certification or license, an individual must first pass an Internal Revenue Service (IRS) exam to be declared an enrolled agent and receive an earned credential. The IRS exam consists of federal tax laws and various other taxation issues.
CPAs may have a greater understanding of all aspects of accounting, personal finance, business law, auditing and more, but CPAs may not be experts in the principals of taxation. It’s because of this they must demonstrate their knowledge in federal tax laws.
Tax preparers have greater knowledge and experience due to the required IRS exam’s focus on tax law in order to earn a designation as an enrolled agent. Therefore, tax preparers are highly knowledgeable in tax laws for big corporations, as well as individuals.
When choosing to use a CPA or tax preparer, it comes down to your financial needs and level of comfort with someone on the outside coming in to take the reigns over your finances. Of the two types of tax professionals, most people hire a tax preparer, as they may not benefit from a CPA who would be more involved in their overall financial picture.
Looking for personal or business tax preparation services in Elkhorn, WI? If you have accounting or taxation needs and would like more information to get you on the right financial path, give the professionals at A Plus Accounting LLC a call today.