One of the biggest payroll advantages of hiring an Enrolled Agent (EA) is cost savings. EAs are typically more affordable than CPAs or tax attorneys while still offering IRS expertise. For instance, if you receive an IRS notice, an EA can often settle it with a single response letter, avoiding hours of billable research. Unlike CPAs or attorneys, whose expertise spans broader financial or legal scopes, the primary responsibility of an enrolled agent is to represent clients before the IRS. Their entire credential hinges on passing a rigorous IRS exam covering audits, collections, and appeals. Plus, they’re also ethically required by law to prioritize your interests before any other thing.

• The program is taught in a cohort format to facilitate optimal faculty interaction and networking with other tax professionals, and it has options to learn online or in person.
• Websites like Google My Business, Yelp, and industry-specific directories provide reviews and ratings that help gauge an advisor’s reputation and reliability.
• Here’s a breakdown of when you might hire a tax preparer and when hiring a CPA makes more sense.
• Depending on your needs, you might find one more suitable than the other.
• This authority allows EAs to assist clients in tax audits, collections, and appeals, providing comprehensive IRS representation.

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A CPA might be a better fit if your taxes are more complex or you want advice beyond filing. Let’s break down what each one does and see which option is best for you. CPAs must complete continuing education hours every year so they stay updated on new tax codes, regulations, and industry best practices.

Why choose a tax preparer?

• Their deep understanding of tax laws and regulations ensures that clients receive accurate and efficient tax services, whether dealing with past tax compliance or preparing for future tax obligations.
• Auditors constantly work with others, meeting new clients’ accounting teams and integrating as they conduct their audits.
• In contrast, consultants help businesses, usually on a limited-time basis, which requires a flair for project management.
• But aside from being knowledgeable, you want to hire someone you feel good about working with.
• His Main Street Certified Tax Advisor Program now equips CPAs and agents to share these insights with clients.
• Most often, tax consultants have more education than tax preparers, such as in the areas of accounting, business, finance or tax law.

Anyone can be a paid tax return preparer as long as they have an IRS Preparer Tax Identification Number (PTIN). However, tax return preparers have differing levels of skills, education and expertise. The second difference when comparing a tax advisor versus a CPA is their certification.

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For businesses aiming to maximize tax efficiency and ensure ongoing compliance, a tax advisor’s expertise is often more beneficial. Tax advisors can integrate financial strategies that align with your business goals, providing continuous oversight and strategic recommendations that go beyond simple preparation and filing tasks. Any tax professional with an IRS preparer tax identification number (PTIN) is authorized to prepare federal tax returns. However, tax professionals have differing levels of skills, education and expertise.

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On the flip side, if you just need tax consultant vs cpa basic tax filing or IRS representation, an Enrolled Agent (EA) can be a cheaper and more tax-focused option. CPAs can represent you before the IRS, but if you’re dealing with serious IRS issues like tax fraud allegations, liens, or litigation, you need a tax attorney. Tax attorneys are better suited and trained to handle legal tax disputes and can represent you in court if necessary.

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Certified Public Accountants, with their broader expertise, find opportunities in public accounting firms, corporate finance, and even as corporate and executive accountants. Their ability to handle diverse financial tasks makes them indispensable in various professional settings. Tax season is here, and you’re probably wondering whether you should hire an Enrolled Agent (EA) or a Certified Public Accountant (CPA). Understanding the key differences between an Enrolled Agent vs CPA is crucial for making an informed decision.

Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. Additionally, they must meet a Online Bookkeeping mandatory experience requirement, typically working under a licensed CPA for several years. Notably, they are licensed by their state board of accountancy and are authorized to represent taxpayers before the IRS.

Key Differences Between Tax Consultants and Tax Accountants

• The benefit of enrolling in the program is that IRS includes AFSP participants in its public directory of tax preparers.
• Most importantly, they could save you thousands of dollars and help you implement a tax plan to minimize taxes for future years.
• Always shop around and get pricing upfront from a potential tax preparer.
• They generally have no limits on who they can represent, and they can appear before any IRS office.
• Regardless of the title, their primary aim is often to help clients navigate the complexities of tax regulations to ensure compliance and optimize financial outcomes.
• However, a CPA’s background typically extends into auditing, financial analysis, and business advisory.

For instance, a start up exploring international expansion would benefit from a tax consultant’s expertise in international tax law. Conversely, an individual simply looking to file annual tax returns accurately would likely need the services of a tax accountant. A CPA is a full-service financial professional who is generally better suited to provide year-round accounting services and tax planning. A tax preparer is someone who is licensed to prepare and file taxes, and is generally the right choice for someone who specifically needs help when it comes time to file. Employing the expertise of a tax consultant can dramatically streamline your tax strategy and financial standing. At Milestone, we’re committed to offering tailored accounting services, leveraging years of experience to address your needs effectively.

• If you’re operating or even starting a small business, you’ll quickly discover that tax preparation is just one piece of the puzzle.
• Her work has been featured in Yahoo Finance, Bankrate.com, SmartAsset, Black Enterprise, New Orleans Agenda, and more.
• A CPA can be beneficial for individuals and businesses dealing with complex financial matters.
• The 55 US state boards or (BOA) have the statutory authority to issue the CPA license.
• This service is crucial for ensuring transparency, identifying discrepancies, and compliance with accounting standards and regulations.
• Enrolled Agents are recognized as tax specialists, focusing exclusively on taxation and tax law.

When a CPA might be a better choice than a tax attorney

To understand the difference between an EA and a CPA, it’s helpful to start with the responsibilities and day-to-day work of each. Our team of bookkeepers prepared a Year-End Financial Package with everything you need to file, including your income statement, balance sheet, trial balance, journal entry summary, and general ledger. Our team is ready to learn about your business and guide you to the right solution.