Tax preparation requires sound knowledge of federal and Texas state laws and regulations. Hence, it might be inconvenient for an individual to prepare taxes. Hiring a professional to prepare your taxes can save you time and headaches. However, deciding whether to hire a tax preparer or a CPA to prepare your taxes may be a challenge.
While both can prepare taxes, the knowledge and expertise of a CPA in Brownwood, TX, may be very beneficial for individuals seeking quick yet precise tax preparation solutions.
Key differences between a tax preparer and a CPA
While CPAs and tax preparers are both finance professionals, their roles and responsibilities differ.
A tax preparer’s expertise is unlimited to assisting in preparing and filing taxes only. However, a CPA is a licensed professional with a higher level of knowledge and skill set in tax, finances, accounting, auditing, etc.
Jobs and responsibilities of a tax preparer
- Collecting income, allowances, investment, and expense information from the clients.
- Fill out forms and file them as per state and federal codes.
- Organizing paperwork, operating accounting software, managing client data, etc.
- Offering tax-related advice, guidance, and recommendations to clients and computing taxes for them.
- Staying current with state and federal laws, credits, deductions, and adjustments.
- Auditing clients’ tax forms and signing tax returns on their behalf.
- Acting as a communication link between clients and tax authorities.
Primary responsibilities of a CPA
- Preparing and filing clients’ state and federal tax returns.
- Financial auditing and preparing financial statements.
- Assist clients with budgeting, taxation, auditing, investment, and other financial activities.
- Filing reports with the SEC (Securities and Exchange Commission).
- Help companies with professional insight on mergers and acquisitions.
- Provide estate planning and bookkeeping services to clients.
Hiring a CPA ensures better solutions.
Hiring a CPA for preparing and filing tax returns can be more beneficial due to the following reasons:
- CPAs are experts in minimizing tax liabilities, optimizing cash flow, and ensuring compliance with local, state, and federal taxes.
- They facilitate professional accounting solutions to maximize credits, deductions, and profits while minimizing penalties and liabilities.
- CPAs can provide expert guidance to clients on tax planning strategies, profit and loss, tax filing, and much more.
- A CPA is up to date with knowledge of tax laws and regulations and can easily handle all tax filing forms, such as Form 1120, 1120S, 1065, 1120-F, etc.
- CPAs can help businesses with help like payroll tax compliance, withholdings, miscellaneous calculations, tax returns, tax remittance, etc.
- CPAs act as tax audit representatives for their clients and aid in negotiation with the IRS audit process while also protecting the interest of the business.
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