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I would like to know if a cpa license is required to open an accounting/income tax office that does little bit of bookkeeping, taxes and payrol.
thanks
Do I need to be a CPA to prepare taxes?
hi guys,
I would like to know if a cpa license is required to open an accounting/income tax office that does little bit of bookkeeping, taxes and payrol.
thanks
I am planning on starting the same kind of business you are interested in. I don't have a CPA though I do plan on taking the CPA exam some day. It depends on your state, for eg. in the state of california... people who prepare taxes for a fee are required to be registered with the state. I do have the CTEC registeration and I am also working this year as a paid tax preparer.
You need to have a CPA or EA license if you want to represent tax payers in front of IRS. So the simple answer to your question would be that you don't need to be a CPA to start an income tax/bookkeeping practice.
zahid
Google Plus: +Zahid Lilani | Twitter: @ZahidLilani
“Your time is limited, so don't waste it living someone else's life."
- Steve Jobs
IRS Circular 230 notice: In order to comply with requirements imposed by the IRS, I must inform you that any tax advice contained on this forum is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.
I'm planning to start a business eventually too, probably specializing in tax prep and perhaps offering other services during the rest of the year, bookkeeping, etc.
I would suggest looking into becoming an Enrolled Agent (EA), which is a tax specialist recognized by the IRS and able to represent taxpayers, as Zahi said. Other than that, you will need to check with your state to see what is required for this type of business.
As far as I know only if your client requests it. Good luck with the new business, seems like a lot of people are going it alone on here
Has anybody found not having a CPA a barrier to gaining credibility from clients or is this something that is only needed for the larger clients?
What is exactly is the difference between EA and CPA. Is the EA test as tough as the CPA test. I would guess EA has less authority and knowledge than a CPA.
EA is more versed in taxes than a CPA. CPA exam consists of 6%-10% taxes, EA exam has 3 parts and it is 100 taxes. A California CPA can only represent tax audit clients in California but on the other hand, EA can represent a client anywhere in the U.S.Originally Posted by sl19
CPAs learn by experience how to deal with IRS, EAs learn the nuts and bolts of it as they have to pass an entire exam that deals with dealing with the IRS.
zahid
Google Plus: +Zahid Lilani | Twitter: @ZahidLilani
“Your time is limited, so don't waste it living someone else's life."
- Steve Jobs
IRS Circular 230 notice: In order to comply with requirements imposed by the IRS, I must inform you that any tax advice contained on this forum is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.
Ea/cpa
Yeah, I agree that taxes are not the only focus of the CPA exam. I am unfamiliar with EA as I am from Washington and not sure we even have them up there. I would like to take a look at the EA test.
Theres 5 years of college education and 1 year of experience before you can get a CPA. I think for that reason it provides more credibility.
An Enrolled Agent (EA) designation is good throughout the country and takes MUCH less work than a CPA. To get an EA designation, you must pass several tests which are given once a year. However, (at least when I got my EA designation), there was no requirement for a specific amount of education or experience. Pretty much anyone can get the information (study materials) and study it on their own, then take the tests. However, the designation only allows you to practice taxes. There may also be additional requirements posed by your state before you can perform tax work in the state.
Doing bookkeeping does not require a specific designation, passing of exams, or much of any other requirements in most states. Thus, if you want to just do taxes and bookkeeping, an EA designation will give you everything you need, and it is a much shorter and less expensive path to take than going for a CPA. However, if you want to do other work such as accounting or auditing, you do need the CPA designation.
Caitlind Alexander, Author, 101 FAQs About Becoming an Accountant
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