Finding a good CPA for taxes takes effort. Learning how to pick a CPA can be made easier by applying useful tips and considering what you want out of a CPA.
• Finding a good CPA near you can help with handling your tax return preparation and filing.
• Three types of credentialed tax professionals handle tax returns: enrolled agents, CPAs, and tax attorneys.
• Enrolled agents and CPAs specialize in helping with tax return preparation and filing, while tax attorneys provide legal advice and representation before the IRS and Tax Court.
• CPAs can provide a lot of services for you or your business, from preparing tax returns to offering financial planning and advice.
What is a CPA?
Certified Public Accountants (CPAs) are knowledgeable about the tax code and can help you maximize your tax savings. Also, they can represent you before the IRS to help you deal with audits or collections.
To become a CPA, generally, you need to complete at least 150 semester hours of college coursework before sitting for the Uniform CPA exam. Typically, a college degree requires completion of around 120 semester hours, meaning CPAs tend to pursue a Master’s Degree or other post-secondary education coursework to meet the minimum course hour requirement. Some, but not all, CPAs have a Masters in Accounting or related field. Additionally, prospective CPAs will need to take specific courses to qualify to sit for the Uniform CPA Exam.
The CPA exams consist of four individual tests you'll need to pass within an 18-month window and cover a broad area of topics related to the field of accounting:
- Auditing and attestation
- Financial accounting and reporting
- Regulation (taxes)
- Business environment and concepts
CPAs generally need to work under the direct supervision of another CPA with an active license, often performing at least 1,800 hours of work (or roughly one year of working full-time) related to providing any type of service or advice involving the use of accounting in some states. This includes accounting services, management advisory, financial advisory, tax, or consulting skills.
Due to the intense requirements you must meet to become a CPA, this license represents one of the most well-respected credentials in the business world. Finding a CPA to handle your tax needs should help to answer questions you might have around tax advice and planning.
What should I look for to find a good CPA near me?
Here are some helpful tips for selecting a good CPA for your taxes:
- Ask about their specialization. CPAs can specialize in a range of accounting areas, including business, government, and forensic accounting, as well as tax preparation. For preparing and filing your personal taxes, consider finding a CPA who specializes in individual income tax returns.
- Verify their identification number. The IRS requires CPAs who prepare taxes to register with the IRS and have a Preparer Tax Identification Number (PTIN). To verify that a CPA is registered with a PTIN, simply search the IRS Return Preparer Office Directory.
- Look up their license. CPAs are also licensed by the state, so before hiring one, you can search their records with your state's board of accountancy. Most states offer CPA databases that allow you to search by name and find important information on a CPA's license status, issue and expiration dates, as well as disciplinary actions and suspensions.
- Consider their experience. While all CPAs are credentialed prior to offering their services, CPAs with several years of experience will more likely have a deeper understanding of the tax code than a newly certified individual. Find out if your CPA has experience electronically filing tax returns. The IRS requires tax preparers who file 11 or more tax returns per year to provide e-filing services, so if a CPA doesn't offer e-filing, they may not be very experienced.
- Confirm their willingness to sign. Verify that your CPA will sign your tax return and represent you before the IRS for any tax matter related to your return. If not, consider finding a CPA who will.
- Ask for advice. A good tax CPA won't only prepare and file your return for the current tax year, but can also offer year-round tax planning advice to help you maximize your tax savings for future tax years.
- Consider their fees. CPAs can charge by the hour, flat fee, or other payment options based on the complexity of your taxes—how many schedules and supporting forms you'll need to file with your return. Make sure to find out if their fees include filing both federal and state returns. CPAs aren't generally allowed to base their fees on a percentage of your tax refund, so you may want to avoid this type of pay arrangement.
- Make sure they e-file. The IRS lists several reasons why you should e-file your federal tax return. Chief among them are to ensure better accuracy and completeness for your return, but also because it adds safety and security for your information and results in faster refunds if you’re due one.
- Ask if they provide audit defense. No one wants to get audited, but they still happen. In that event, you’ll want a qualified tax professional like a CPA to represent you before the IRS or Tax Court. They can gather your documentation used to prepare your return and deal with the IRS directly if you authorize them to do so on your behalf. Having a licensed CPA discuss your tax return with the IRS is likely a better option than you doing it alone.
- Ask for referrals from other clients. Referrals often result in some of the best leads for businesses. The same is true when you’re a customer looking for a reputable business or service provider to meet your needs. Because receiving a referral from another client can lead to highly-qualified recommendations on who to hire (or who not to hire), asking other clients for referrals and reviews can improve the likelihood of finding a good CPA near you.
The types of tax preparers
You have three primary types of tax professionals you can hire to help you with tax work.
- Enrolled agent: An enrolled agent is a tax professional who's been federally licensed by the IRS. They're tax practitioners who are authorized to advise, represent and prepare tax returns for businesses and individuals. They must either pass a rigorous three-part exam or have experience through working as a former IRS employee. Enrolled agents must complete continuing education requirements to maintain their license.
- CPA: A certified public accountant (CPA) is an accounting professional who meets stringent educational and experience requirements. CPAs are licensed by their state and must complete continuing education requirements to maintain their license. You can approach a CPA for many reasons, but they're widely known for filing several types of tax returns, including for individuals and businesses. A CPA can help with finding relevant deductions and credits and also offers financial planning services.
- Tax attorney: A tax attorney is another type of tax professional who specializes in tax matters. In addition to tax preparation services, they can represent taxpayers before the IRS, as well as in civil and criminal tax court. If you have a need for someone to offer legal advice or representation before the IRS or court, you’d want to consider hiring a tax lawyer.
TurboTax Tip: When choosing a tax professional, it's important to consider what services they offer, their experience, and their fees. It's also important to make sure that they are licensed and insured.
What kind of tax preparer do I need?
If you need assistance with preparing your tax return, consider finding an Enrolled Agent (EA), Certified Public Accountant (CPA) or tax attorney. These income tax advisors can assist with tax returns varying from simple to complex as they’re well-trained and knowledgeable about the tax code, and how to claim relevant tax deductions and credits on your return.
Above all, you should trust your tax preparer. You'll share personal information with this person, such as your income, family, and residence.
Anyone can be a paid tax return preparer if they have an IRS Preparer Tax Identification Number (PTIN). Tax return preparers have various levels of skills, education, expertise, and credentialing.
In addition to searching for, “tax advisors near me,” consider consulting the IRS’ Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This is a searchable directory intended to help you by providing a listing of tax preparers near you who currently hold professional credentials recognized by the IRS and state boards of accountancy, or who hold an Annual Filing Season Program Record of Completion.
Do small businesses hire accountants?
Yes. Small businesses also hire CPAs for their business needs.
Often, small businesses don’t have the expertise to handle a lot of the tax matters related to their business. Accountants can do more than just taxes. They can also handle administrative tasks such as budgeting, bookkeeping, financial accounting and reporting, invoicing, tax planning, and tax preparation and filing.
These services are invaluable for small businesses, especially in their first year of business when they’re more focused on running the company and growing it into a profitable venture.
Choosing the right accountant
When it comes to financial planning and filing taxes, it's important to choose the right accountant for your needs. Enrolled agents, CPAs, and tax attorneys all have different qualifications and areas of expertise. All can handle your tax return needs, while CPAs and tax attorneys can provide other valuable services like representing you before the IRS or Tax Court, or even helping your business with other administrative tasks.
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