Why You Should Choose a CPA For Your Tax Preparation
Saved in: Accounting Services, Tax NewsThe majority of people think that the terms “Accountant”, “CPA” and “tax preparer” are synonymous. They are not. The truth is that each represents a specific level of capability and licensing. Even though a CPA is an accountant and a tax preparer, an accountant or a tax preparer is not necessarily a CPA. Confused? Please don’t be. This article will clarify the terms for you.
#1 – Let’s define the different terms:
A tax preparer is professional who works as an employee for a company as an independent contractor or freelancer preparing taxes. They are required to be registered with the IRS, to obtain a PTIN, (Preparer Tax Identification Number) and to comply with the requirements of continuous education. A license is not required and usually a person with a vocational course or a minimum of a high school diploma can do the job. Having a business formal education is generally not required to be a tax preparer.
An accountant performs bookkeeping functions, but usually they prepare financial statements, record accounting transactions, and do research for the fairness presentation of the financial statements. Accountants normally have a higher education degree in Accounting, like an Associate Degree or a Bachelor Degree in Business Administration with a Major in Finance or Accounting. The IRS classifies an accountant as an “unenrolled tax preparer”. This means that an accountant that chooses to be a tax preparer has limited practice rights before the IRS. An “unenrolled tax preparer” may only represent clients whose tax returns are prepared and signed by them. This representation is only at the initial audit level.
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A CPA is a professional who is license by the state board of accountancy and has passed the CPA Uniform Exam. This is the most prestigious designation an accountant can have. The CPA license denotes the accounting profession higher standards of competence and a symbol of assurance of quality. The CPA must meet education, experience, and good character requirements. They also must comply with ethical requirements and complete specified levels of continuing education in order to not only maintain an active CPA license, but also to assure their knowledge and expertise is update and current.
#2 – Why should I choose a CPA to prepare my taxes?
A CPA has unlimited representation rights before the IRS. They can represent their clients not only on audits but also in payments or collections issues and appeals. A tax preparer or an accountant does not have these rights. Other aspects to consider are the professionalism and the accuracy of the tax return calculations. What happens if your tax preparer makes a mistake that cost you penalties or interest? What is going to happen if you are audited by the IRS? Who is going to represent you or who is going to be responsible for that? Because of the ethics standard of the CPA profession they will be responsible and will respond and support you if these scenarios arise.
Khaled Hazzouri is a Certified Public Accountant with over 16 years of experience operating in the area. If you are looking for a CPA in Wayne County, Michigan with a history of working with individuals and businesses in the region then you need only look at his Google Reviews to see the high level of service he provides. If you would like to schedule a consultation please call us today at 734-844-1614. The 2014 tax season is approaching quickly, are you prepared? We look forward to speaking with you.