Differences in Hiring a Tax Preparer vs. a CPA

If you’re like most taxpayers, you may not need either a tax preparer or a certified Read this page public accountant (CPA). There are exceptions, though. Maybe you’re self-employed, own a small business or have lived in several jurisdictions. In these cases you might need some help. If so, here’s your rule of thumb: Hire a tax preparer if you generally understand your finances and just want to make sure your taxes get done right. Hire a CPA if your financial questions extend beyond simply preparing and filing tax forms.

A certified public accountant, or CPA, is a full-service financial professional. The title of CPA is a formal credential issued by the American Institute of Certified Public Accountants, or AICPA. It means that this person is a professional accountant who has also met the standards for CPA certification. This requires two elements:

National – A CPA must pass the AICPA’s national licensing exams and qualifications;
State – A CPA must also meet the requirements set by any state licensing board in which they practice.
To meet the national requirements, an accountant must pass the national CPA exam issued by the AICPA each year. In addition to this exam, each state has its own requirements. Typically these state requirements include:

Minimum educational credentials, such as a degree or a minimum number of credit hours
Minimum relevant educational credentials, meaning that you must have dedicated a minimum amount of your studies to accounting and finance
Professional experience, meaning that you must have worked in the field as an accountant or financial professional for a minimum number of years
Residency, meaning that you must have lived and worked in the state for a minimum number of years
For example, New York sets the following requirements to receive a CPA license:

You must be 21 or older;
You must have a bachelor’s degree and 150 credit hours of post-secondary education. In the alternative, you may waive this requirement if you can show 15 years of related experience under the supervision of a qualified professional;
Of your credit hours, at least 33 must have been in directly related financial fields, and another 36 must have been in generally related business or financial fields;
At least one year of relevant work experience.