Tax preparation and tax advice are two different services that can help individuals and businesses with their taxes. A tax preparer is best for people who want their taxes to be settled as quickly as possible, while a tax advisor is best for those who want to prepare their taxes as efficiently as possible and pay the lowest amount of taxes. Tax accountants have different qualifications and levels of experience than income tax preparers, and they are qualified to provide longer-term assistance. Certified public accountants (CPAs) have the autonomy to practice in the field of accounting, as well as to prepare income taxes for compensation, without being subject to the same IRS guidelines for income tax preparers. CPAs must earn an appropriate degree, pass a complicated exam, gain professional experience, and face regulation by a state board.
Without completing the proper degree, tax preparers won't have the basic accounting skills needed to prepare business tax returns. The lack of licenses also provides tax preparers an opportunity to adopt aggressive (and sometimes illegal) tax positions without regulatory agencies taking disciplinary action. The tax preparer category generally includes unlicensed professionals who are subject to minimum regulation, if any. Some of the experienced tax preparers actually do a good job of preparing error-free tax returns based on information provided by the customer. In addition to preparing taxes, tax accountants help individuals and businesses with financial and wealth planning. The IRS provides tips to avoid unscrupulous tax preparers and is committed to investigating paid tax return preparers who act improperly.
As a result, public accountants who choose to specialize in taxes tend to have more experience with certain tax topics than the typical tax professional. Whether you should hire a tax preparer or a tax advisor depends on your tax situation and your needs. If you simply need help with filing your taxes, then a tax preparer may be sufficient. However, if your company is preparing to be audited or needs guidance to structure investments to improve its tax situation, then you should consider hiring a tax advisor. Anyone can prepare a paid tax return as long as they have an IRS Tax Preparer Identification Number (PTIN). If you run into a tax preparer whose fee is based on the amount of your refund or who says they can give you a larger refund than anyone else's, that's a warning sign. Whether you simply need the help of an enrolled agent or are looking for broader tax planning support, Paro's fractional tax service professionals can provide you with flexible solutions that fit your level of need.