Like most small business owners, you are probably not sure how to choose a Raleigh tax accountant. The right accountant is vital for your business and will save you time and money year after year. Whether picking a certified public accountant (CPA) or a private accountant, it could be a difficult decision to take. Here is some explanation on the difference between a Public Accountant and Private Accountants. To make it clear and simple, C. E. Thorn, CPA, PLLC has shared a few of the most common differences below.
|Certified Public Accountant (CPA) – Public Accountant||Independent Non-Certified Accountants – Private Accountant|
|Education & Certification requirements||
Public Accountant Certification – licensed by a State.
Education requirements include 500 hours of auditing time, 2 years of work in an established accounting firm, knowledge in practice, theory, auditing and tax laws.
Educational continuance of 124 hours’ tax courses every 3 years to remain certified and licensed.
No educations and certification are required. However, to prepare taxes, most states require a certain number of qualified hours of study plus an educational continuance each year.
Several certifications are available for independent accountants but it is not an obligation to hold one.
|Financial Analysis|| A CPA is the only one able to prepare an audited financial statement and a reviewed one. These processes require high methodology examination and testing skills.
CPA’s provide support and advice on tax and financial matters.
Note: CPA designation doesn’t guarantee the quality on the advice.
Non-certified accountants review business financial records and prepare and analyze the financial reports (Balance Sheet and P&L).
|Industry expertise||Experience in multiple industries gained by clients||Limited knowledge: confined in a single industry|
|Taxes*|| Classified by the IRS as ‘enrolled agents’:
– More familiar with tax laws than private one (tax code is a big part of a CPA’s license)
– Stay update with tax laws to maintain their license. Note: Not all CPA’s are specialized in small business taxes.
| Classified by the IRS as ‘enrolled prepares’:
Are able to prepare and sign tax returns but do not provide assurance:
Eligible to represent you before the IRS.
| Not Eligible in representing you before the IRS. (Private Accountants can only represent clients in a very limited manner)
*If you hire a professional to prepare your tax, be sure his person has the full authority to represent you in an audit and to execute claims on your behalf.
*** The IRS requires all tax preparers to have a preparer tax identification number. The IRS distinguishes between preparers who are enrolled agents, CPA’s, or attorneys, and other preparers (considered unenrolled preparers). Accountants who are not CPA’s are considered unenrolled preparers. An unenrolled preparer’s ability to represent a client in a tax matter before the IRS is very limited.
If you own a small business in the Raleigh-Durham, NC area, we look forward to helping you with your tax filing and other small business services. Consider C.E. Thorn, CPA, PLLC for your personal and small business accounting needs. We invite you to schedule an appointment by calling 919-420-0092 or completing the contact form.