Tax preparers, accountants,and certified public accounts (CPA) all work in the business of interpreting financial data and transactions. While they may seem synonymous, there are many differences to consider when choosing one of these professionals. Here is a quick overview of what sets each of them apart.
A Tax Preparer is someone who focuses on ensuring that tax compliance is achieved when you file your taxes each year. The level of expertise can vary substantially since there is little regulation on who can be a tax prepare. Some can help with strategy but they typically focus on making sure tax returns are filed correctly. These are the two main types of tax preparers:
Non-credentialed Tax Preparer – Can only prepare tax returns
Enrolled Agents-Can prepare tax returns and represent taxpayers before the IRS
No formal education required
No prior experience required
EA’s Must pass IRS Enrolled Agent Exams
Three sections that focus on preparation & procedures of Individual and Business returns.
An Accountant is someone who records and/or analyzes business transactions on behalf of organizations. They can come with many different specializations. You can have Revenue Accountants, Cost Accountants, Non-Profit Accountants, Inventory Accountants, Tax Accountants etc. They however cannot be titled “certified accountants” without the proper qualifications.
Typically have at least a bachelor’s degree in a business related field
Certified Public Accountant
A CPA is someone who can function in many different roles not limited to Accounting. They can be tax preparers, managers, advisors etc. They also have the ability to issue Audited and Reviewed financial statements.
Must have a Bachelor’s Degree (120 credit hours) and a total of 150 credit hours of formal education
These total hours must cover specific business and accounting topics
Must work under a CPA for 2000 hours before a license will be issued
Must pass the CPA Examination Sections
Financial Accounting & Reporting
Regulation(Tax & Law)
Business Environment & Concepts