Key Takeaways
- 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 accounting professionals 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.
CPA education & training
CPAs generally complete at least 150 semester hours of college coursework, including specific accounting courses, 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 coursework requirement. Some, but not all, CPAs have a Masters in Accounting or a related field.
CPA exam
The CPA exam consists of four individual tests the CPA candidates 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
CPA training
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. This includes:
- accounting services
- management advisory
- financial advisory
- tax
- consulting skills
Due to the intense requirements an accountant 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 also help to answer questions you might have around tax planning and provide personalized advice on tax-saving strategies.
Finding a CPA for your taxes
Finding a nearby CPA that fits your needs can be done with a combination of online research and telephone interviewing. Since tax preparers need to register with the IRS, the agency’s Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a great place to start your search. You can search by country, zip code, and distance in miles. Since CPAs typically are licensed by their states, most state societies of CPAs will have a searchable database. You can often narrow your search by area of expertise (taxes), location, and keywords.
You may also want to use your network of friends and colleagues to find a CPA in your area. Your banker, financial advisor, and even your workplace may be able to recommend someone right for you.
Once you have a CPA to contact, you’ll want to ask them some questions to find out if they will be a good fit for you. Here are a few questions you might want to ask when you’re deciding which CPA to use for your taxes:
What’s your 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. For a small business CPA near you, look for a business tax specialist.
What’s your 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.
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.
Is your license current?
CPAs are licensed by individual states, 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 any disciplinary actions or suspensions.
How many years of experience do you have?
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.
Are you willing to sign my tax return?
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.
Can you give me tax 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.
What’s your fee structure?
CPAs can charge by the hour, flat fee, or other fee options based on the complexity of your taxes— such as based on the 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. For ethical reasons, 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.
Do you e-file?
The IRS lists several reasons why you should e-file your federal tax return. Chief among them is 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.
Will you 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. 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.
Do small businesses hire CPAs?
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 CPA
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