Is a CPA the Same as a Tax Preparer?

Your taxes are due, and you want them to be done the right way. When choosing to use a tax professional, there are a few options out there. Two of the most popular options to prepare your taxes are a Certified Public Accountant (CPA), or a tax preparer. These are not the same, and the most important difference between the two is that the CPA is a licensed tax professional, while the tax preparer is generally unlicensed. 

There are some other differences between the two, and understanding those differences will go a long way helping you decide what is the best fit for your unique tax situation. Both of these are suitable for filing your taxes, but depending on the complexity of your return, one might be a better fit than the other when looking for tax services in Wichita, Kansas

What Makes a CPA Different?

CPAs have to go through a challenging set of requirements to earn that licensing designation. In Kansas, potential CPAs have to complete 150 semester hours of college-level coursework that concentrates on accounting. Then they have to complete and pass multiple exams before they can apply for the CPA certificate. They also must accumulate the required hours of experience, and once all those steps are completed, can apply for a license.

Because of these guidelines, CPAs generally have a much more extensive background in accounting. Some CPAs specialize in specific accounting fields, but if they focus on tax accounting, they’re going to bring extensive knowledge to the table. Also, if your tax return has anything out of the ordinary, or is more complex than simply filing your W-2, the CPA is going to be better equipped for those situations.

What Can CPAs Do That Tax Preparers Can’t?

Tax preparers are typically less expensive than CPAs when filing tax returns, but an unlicensed tax preparer could essentially be anybody that advertises themselves as one. CPAs are well equipped to perform any number of tax returns, no matter the complexity. CPAs are also generally more focused on providing ongoing services in other areas of accounting, which can provide assistance with other financial matters.

It’s also important to note that non-licensed tax preparers cannot represent you in the event of an audit by the IRS. CPAs are always approved to represent their clients through the audit process, and that can reduce a lot of stress for the taxpayer. Tax preparers can take some extra steps to earn distinction as an Enrolled Agent (EA), which allows them to represent their clients in the case of an audit. However, if your tax preparer hasn’t taken these steps, the taxpayer is on their own in that audit.

CPAs are the more knowledgeable and certified option in most cases, but tax preparers might be all that’s needed in the case of some of the simpler tax filings. For more information on the differences between a tax preparer and a CPA – and to help determine which is right for you – reach out to the experts at Wichita Tax Advisor today.