Certified Public Accountants, or CPAs

A CPA is licensed by a state agency, and required to maintain proficiency through continuing education. CPAs are usually well informed on a variety of financial issues, and can often provide useful financial planning advice in addition to tax preparation. Not all CPAs are tax specialists, however. On average, their advice costs the most.

 

Enrolled Agents

An Enrolled Agent is certified by the IRS (many are former employees of the agency). Enrolled Agents usually specialize in taxes, and like CPAs, are authorized to speak for taxpayers in IRS hearings and audits. They also have continuing education requirements to maintain their practice.

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Tax Preparers

A tax preparer may be a financial planner, retired accountant, or someone who prepares returns on a temporary or part-time basis. Whether independent practitioners or working in 'storefront' tax preparation centers, they have no licensing or education requirements other than those set by their establishment. Their rates are generally less expensive than Enrolled Agents or CPAs.

 

Who provides the best fit for your tax preparation needs?

Like many financial questions, the answer is 'it depends.' If you're looking mainly to save time by having someone else fill out the forms, any of these individuals should be able to help you, with preparers usually offering a cost advantage. If you want more in-depth or long-term analysis of your finances and future tax picture, or if you want to make sure that the person who prepared your taxes can represent you in the event of an audit, an Enrolled Agent or CPA is the way to go.