Accountant questions, answered plainly

A CPA is licensed by a state after passing the Uniform CPA Exam and meeting education and experience requirements, and can offer a broad range of services including audits and financial statements. An enrolled agent (EA) is licensed federally by the IRS specifically in tax matters and can represent any taxpayer before the IRS in any state. Both can represent you in an audit; a CPA's scope is simply broader.

It depends on what you actually need done. A bookkeeper handles ongoing recordkeeping — categorizing transactions, reconciling accounts — but most don't prepare or file tax returns. If you just need clean books, a bookkeeper may be enough; if you need a tax return filed or tax strategy advice, you need a CPA, EA, or qualified tax preparer as well.

Generally no, unless that same person also holds a separate credential such as a PTIN as a registered tax preparer, or is also a CPA or EA. Many small businesses use a bookkeeper for monthly records and a separate CPA or EA for the annual return — ask directly which services a specific bookkeeper actually offers.

Only a CPA, an enrolled agent, or an attorney has full representation rights before the IRS under federal rules. A non-credentialed tax preparer who simply holds a PTIN generally cannot represent you in an audit beyond the return they personally prepared, and only under limited circumstances.

It varies widely by service and complexity. Simple individual tax returns are often priced as a flat fee, ongoing bookkeeping is usually a monthly retainer, and more complex or advisory work is frequently billed hourly. Ask for the fee structure in writing before work begins so you're comparing like for like.

For a simple return — one job, standard deduction, no business income — software is often genuinely enough. Once you have self-employment income, multiple income sources, rental property, or a business, the complexity and the cost of a mistake both rise, and a professional usually earns their fee.

A Preparer Tax Identification Number confirms someone is registered with the IRS to legally prepare federal tax returns for compensation. It does not verify their skill level, experience, or whether they hold any additional credential like a CPA or EA license — that's a separate check.

Pressure to sign a return before you've reviewed it, refusal to share a PTIN or license number, promising a specific refund amount before seeing your documents, and basing their fee on a percentage of your refund are all worth taking seriously.

Yes. You're entitled to your own financial records at any point, and a professional switch is usually straightforward outside of the busiest weeks of tax season. Our guide on switching accountants covers what to request and how to hand off records cleanly.

No. The licensing categories, IRS representation rules, and fee structures described here are specific to the United States and won't transfer directly to other countries' systems.

Last year's tax return, this year's income documents (W-2s, 1099s, or business records), a summary of any major life or business changes, and a written list of questions. Being prepared changes how efficiently that first meeting goes.

Not automatically. Price often tracks credential and complexity handled, not necessarily quality of service. A simple return doesn't need the most expensive CPA in town, while a complex business situation may be underserved by the cheapest preparer available. Match the professional to the complexity of your situation.