How Working with a CPA Differs from Working with a Tax Preparer
When it’s time to get your taxes done, it’s important to understand the different types of professionals that are qualified to help you, and the qualifications that they hold. Different types of tax professionals can provide you with a different level of service and expertise on your tax return. CPAs in particular are the most highly qualified individuals for handling tax planning and preparation. Keep reading to learn more about how working with a CPA differs from working with a tax preparer on your return.
Education, Qualifications, and Experience
If you see an individual advertising themselves as a tax preparer, there is not guarantee that the individual has any specialized training, education, or experience in tax preparation. In fact, any person can present themselves as a tax preparer, since there are no certification requirements to complete a tax return (hence why you can prepare your own if you wish to). If you’re taking your return to a large tax preparation company, be aware that most of their tax preparers are seasonal employees that obtain minimal training in tax preparation before working on your return. While this is certainly better than no training at all, it’s simply not the same level of knowledge and experience that you’ll get from a CPA.
A CPA must obtain a Master’s degree in at least one area of finance, obtain firsthand experience in the field, and pass several complex exams pertaining to tax preparation in order to receive their certification. Additionally, CPAs must receive a certain number of hours of continuing education to maintain their license. This means that, when you work with a CPA, you’re passing your taxes off to someone who has proven themselves a financial expert, and who continues to reeducate and retrain themselves on changing tax laws every year.
Complex Tax Matters
If you have a complicated tax situation—for example, if you own a business—a tax preparer without any specialized knowledge or certification likely won’t know how to properly handle your taxes. Items like business income and expenses require a more in-depth knowledge of taxes and finances in order to ensure that deductions are being claimed properly, and all income in appropriately reported. For taxes that go beyond a simple W-2, it’s best to work with a CPA, who will have more thorough knowledge of relevant tax laws and how to handle your financial circumstances appropriately when filling out your return.
IRS Audit Representation
Receiving an audit notice from the IRS is never something people hope for, but it happens to many taxpayers each year. If you receive a notice that you’re being audited, it’s natural to feel anxious, but that anxiety can be lessened by having a tax professional on your side to guide you through your audit. Unfortunately, if you used a tax preparer without any specialized certifications, they will not be able to communicate with the IRS on your behalf. While they may have prepared your return, they won’t be able to defend any of the information they put on that return for you—that responsibility will fall to you. This is a stressful situation to find yourself in.
If you work with a CPA, however, they can represent you during the audit and communicate with the IRS on your behalf. They can provide the necessary information and documentation to verify the numbers they put on your return, and if adjustments are needed, they can refile the return for you. Of course, they will do all of this while maintaining open communication with you, so you can remain informed on the audit process without any of the stress of having to directly handle submitting supporting documents to the IRS.
The simple fact of the matter is that experience and education matter when it comes to taxes. Tax law is complex, and working with a tax preparer who has not been thoroughly educated on the matter and is not required to maintain a certification through continuing education often means that important details get overlooked. This leads to mistakes that make you more likely to face an audit or other complications related to your taxes. At the very least, you’re likely to miss out on deductions that you should have qualified for, which means you’re paying more in taxes than you should.
Working with a CPA provides you with a higher level of service and knowledge in preparing your tax return. Contact Demian & Company CPAs today to schedule a tax consultation with one of our experienced and knowledgeable CPAs.