Different Types of Tax Preparers, and When to Use Each

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Hello, my name is Elona. Welcome to my site about tax services. When I started my own crafting business, I was unsure how to handle my profits and losses. I tallied all of the information and eventually took the documents down to my local tax professional. I learned a lot about the process of preparing and filing taxes during that visit. I would like to help other people handle their business tax documents and work effectively with a qualified professional. I would be honored if you could use my information to handle your taxes with confidence. Please come back again soon.

Different Types of Tax Preparers, and When to Use Each

26 August 2022
 Categories: , Blog

Several different professionals are qualified to prepare taxes. Listed below are different types of tax preparers, and when you might hire each one.

Non-Credentialed Tax Preparers

A non-credentialed tax preparer is the lowest level of tax professional. They don't have any certifications from national professional organizations, but they do have some training from the Internal Revenue Service. The IRS's Annual Filing Season Program requires 18 hours of coursework initially, and a 6-hour refresher each year.

Many non-credentialed preparers work for large companies that offer low-cost tax preparation services. These preparers might be found in their employer's office, or at major stores and similar places. 

You might use a non-credentialed preparer if you have a simple tax situation. These preparers should be able to easily file taxes if you have only one or two jobs, and no other complicating matters. Non-credentialed preparers often work on personal taxes.

Enrolled Agents

Enrolled agents are licensed by the IRS, and they're approved to assist with both personal taxes and business taxes. To become an enrolled agent, a professional must pass more rigorous training and examination than what non-credentialed preparers are required to complete.

In addition to preparing taxes, enrolled agents are also allowed to represent clients before the IRS. Agents are thus able to guide clients through audits, including automated and non-automated audits.

You might hire an enrolled agent if you have a more complex tax matter, such as self-employment income or rental income. An enrolled agent could also assist with small business taxes if you're a business owner.

Certified Public Accountant

A certified public accountant is certified by their state, which allows them to offer accounting services to the general public. Becoming a certified public accountant requires extensive schooling and substantial ongoing coursework. As such, these are generally the most qualified tax preparers that people use.

You might hire a certified public accountant for the same matters that an enrolled agent would handle. A public accountant will have more expertise, and thus be able to more easily handle complex matters. For instance, you may prefer a public accountant if you have a C corporation or S corporation business -- especially if it's in multiple states.

In addition to preparing taxes, a certified public accountant can also help you navigate federal and state audits, payment and collection issues, and tax ruling appeals. They also provide general accounting services and can assist with financial planning and management beyond taxes.