If you’re a business owner or an individual who needs help with filing your taxes, you might be wondering if you should hire an accountant. Accountants are professionals who specialize in preparing, analyzing, and auditing financial records. They can also provide advice on tax planning, compliance, and strategy. But do accountants do taxes? And if so, what are the benefits of hiring one?
In this blog post, we’ll answer these questions and more. You’ll learn:
- What are the different types of accountants and what they do
- How accountants can help you with your taxes
- How to choose the right accountant for your needs
- How much does it cost to hire an accountant for taxes
What are the different types of accountants and what they do
There are many types of accountants, but the most common ones are:
- Certified public accountants (CPAs): These are accountants who have passed the Uniform CPA Examination and met the education and experience requirements of their state. CPAs can provide a wide range of accounting services, including tax preparation, auditing, consulting, and financial reporting. CPAs are regulated by state boards of accountancy and must adhere to ethical and professional standards.
- Enrolled agents (EAs): These are accountants who have passed a comprehensive exam administered by the Internal Revenue Service (IRS) and have unlimited rights to represent taxpayers before the IRS. EAs can prepare tax returns, handle audits, appeals, and collections, and offer tax advice. EAs are regulated by the IRS and must complete continuing education courses every year.
- Bookkeepers: These are accountants who record and summarize financial transactions, such as sales, purchases, payments, and receipts. Bookkeepers can also prepare financial statements, reconcile bank accounts, and perform other basic accounting tasks. Bookkeepers are not required to have any formal education or certification, but they may have some training or experience in accounting software and principles.
How accountants can help you with your taxes
Accountants can help you with your taxes in many ways, such as:
- Preparing and filing your tax returns: Accountants can help you prepare and file your federal, state, and local tax returns, ensuring that you report your income and expenses accurately, claim all the deductions and credits you’re eligible for, and pay the correct amount of tax. Accountants can also help you file any extensions, amendments, or corrections if needed.
- Planning and saving for your taxes: Accountants can help you plan and save for your taxes throughout the year, by estimating your tax liability, advising you on how to reduce your taxable income, and recommending the best ways to save and invest your money. Accountants can also help you with tax strategies for specific situations, such as retirement, inheritance, business ownership, or charitable giving.
- Dealing with the IRS: Accountants can help you deal with the IRS if you have any issues or questions regarding your taxes, such as audits, notices, penalties, or disputes. Accountants can communicate with the IRS on your behalf, negotiate settlements, request waivers, or appeal decisions. Accountants can also help you with tax compliance, such as filing reports, making payments, or meeting deadlines.
How to choose the right accountant for your needs
Choosing the right accountant for your needs depends on several factors, such as:
- Your tax situation: Depending on the complexity and specificity of your tax situation, you may need an accountant who has the appropriate qualifications, experience, and expertise. For example, if you have a business, you may need a CPA who can handle your accounting, bookkeeping, and tax needs. If you have foreign income, you may need an EA who can handle the international tax issues. If you have a simple tax situation, you may only need a bookkeeper who can prepare and file your tax returns.
- Your budget: Depending on the level and quality of service you need, you may have to pay different fees for hiring an accountant. Generally, CPAs and EAs charge more than bookkeepers, and accountants who specialize in certain areas or industries may charge more than generalists. You should also consider the value and benefits of hiring an accountant, such as saving time, money, and stress, and avoiding mistakes, penalties, or audits.
- Your preferences: Depending on your preferences, you may want to hire an accountant who is local, online, or both. You may also want to hire an accountant who is available, responsive, and trustworthy. You may also want to hire an accountant who has a good reputation, reviews, and referrals from other clients.
How much does it cost to hire an accountant for taxes
The cost of hiring an accountant for taxes varies depending on the type of accountant, the type of service, and the type of client. According to a survey by the National Society of Accountants, the average fee for preparing and filing a Form 1040 (the standard individual tax return) with a Schedule A (itemized deductions) was $294 in 2020. The average fee for preparing and filing Form 1120 (the standard corporate tax return) was $819 in 2020. The average fee for preparing and filing Form 1065 (the standard partnership tax return) was $594 in 2020.
However, these are only average fees, and the actual fees may vary depending on the complexity, length, and time of the tax return, as well as the location, experience, and reputation of the accountant. Some accountants may charge by the hour, by the form, by the project, or by the value. Some accountants may also charge extra for additional services, such as consultations, audits, or extensions.
Conclusion
Accountants are professionals who can help you with your taxes, whether you’re a business owner or an individual. Accountants can prepare and file your tax returns, plan and save for your taxes, and deal with the IRS. Accountants can also provide other accounting services, such as auditing, consulting, and financial reporting.
However, not all accountants are the same, and you should choose the right accountant for your needs, based on your tax situation, your budget, and your preferences. You should also compare the cost and value of hiring an accountant, and make sure you get the best service and results for your money.
