CPA vs. Tax Preparer: Which Is Best for Your Business?

Whether you're hiring a new employee, selecting vendors, or collaborating with a strategic partner for taxes, you always want to do what's best for your small business. Choosing the right tax professional can save your business time, money, and compliance headaches throughout each tax year. 

Use this blog as your guide to learn everything you need to know about the differences between a certified public accountant (CPA) and a tax preparer in 2026 — and how to pick the right one to address your needs.

What is a CPA?

CPAs are state-licensed accountants with the highest level of tax authority and are often used by businesses and individuals to prepare taxes. They have unlimited practice rights, meaning CPAs can address all tax matters with the Internal Revenue Service (IRS), regardless of whom they represent.

CPAs can only practice in the states in which they are licensed and can provide additional tax-related services.

CPAs are qualified to handle:  

• Complex tax situations

• IRS representation

• Financial analysis

• Long-term tax planning

• Audit support

CPA certifications

CPAs must pass the Uniform CPA Examination, complete a study in accounting at a college or university, and meet the experience and good character requirements established by their respective boards of accountancy. CPAs also comply with ethical requirements and complete specified levels of continuing education to maintain an active license. 

CPA certifications by the numbers: 

• Bachelor’s degree + 150 credit hours

• They must pass all four sections of the Uniform CPA Exam

• 1 to 2 years of supervised professional experience

• 40+ hours of annual continuing education 

What is a tax preparer?

Anyone who prepares taxes for compensation and possesses an IRS Preparer Tax Identification Number (PTIN) can be a tax preparer. Skill levels vary among tax preparers, with some being highly experienced.

Enrolled agents (EAs) are licensed tax specialists with IRS-granted unlimited representation rights. They are required to pass the Special Enrollment Examination and complete 72 hours of continuing education every three years. Once all requirements are met, generic tax preparers become enrolled agents.

Tax Preparer Certification Levels

EAs must obtain more certifications than a standard tax preparer, but both are qualified to prepare your small business taxes.

1. Enrolled Agent (EA)

• Licensed by the IRS

• Passes three-part Special Enrollment Exam

• 72 hours CE every three years

• Unlimited IRS representation rights

2. Non-credentialed preparer

• Only needs a PTIN

• Cannot represent taxpayers in audits or disputes

Main Differences between a CPA and a Tax Preparer

If you've wondered what the difference between CPA and tax preparers is, review the following table. It will help you decide what's best: CPA vs. tax preparer 2026.

CPAs offer a comprehensive advisory approach, while tax preparers focus on accurate annual filing.

Which Tax Professional Should Your Small Business Choose?

Some small businesses may only require tax preparation services, while others would benefit from the comprehensive range of services and expertise offered by a CPA. Your business situation should guide your selection of a tax professional. 

Choose a CPA if:

• You need strategic tax planning

• You have a growing or complex business

• You need audit protection or IRS representation

• You want help with financial statements or payroll tax strategy

Choose a Tax Preparer or EA if:

• You mainly need annual tax filing

• Your business structure is simple

• You have limited transactions

• You’re looking for an affordable option

Why choose a CPA for your business?

Choosing a CPA would be optimal if your small business would benefit from a suite of accounting services beyond tax preparation, such as:

• Comprehensive tax analysis

• Industry-specific tax expertise

• Ability to identify long-term tax savings

• Support during audits and IRS disputes

Why choose a tax preparer for your business?

If your small business doesn't require services beyond tax preparation, you will benefit from choosing a tax preparer.

• Many tax preparers offer affordable annual filing.

• They're sufficient for straightforward tax situations.

• EAs can handle complex tax scenarios at a lower cost than CPAs.

How to Choose the Right Tax Professional

The tax professional you choose must possess the necessary skill set to prepare and file taxes on your behalf with the IRS. They will handle sensitive personal information, such as your marital status, income, and Social Security Number, so they must be ethical and trustworthy. 

Weigh these selection tips when choosing the right tax professional for your business: 

• Evaluate their credentials.

• Ask whether they offer year-round support or if their only focus is tax season.

• Confirm whether they specialize in small business taxation.

• Ask about pricing transparency.

• Ensure they can provide unlimited expert access, like 1-800Accountant.

Tax preparer vs. CPA FAQs 

Is a CPA always better than a tax preparer?

Not necessarily. CPAs have broader expertise, but EAs and experienced tax preparers may be ideal for basic returns. What's "better" comes down to your unique tax situation and business needs. There isn't a single best tax preparer for small businesses. 

Are CPAs more expensive?

Generally, yes, CPAs are more expensive than hiring an EA or tax preparer. CPAs offer more value and expertise beyond filing, such as year-round tax strategy. 

Do I need a CPA if I’m self-employed?

While CPAs aren't mandatory for self-employed individuals, they offer incredible insights and value. If you need planning, entity structure advice, or year-round tax support, consider using a CPA. 

Can tax preparers represent me before the IRS?

Not every single tax professional for small businesses can legally do this. A standard tax preparer cannot represent you before the IRS. Only CPAs and EAs have full representation rights.

Does 1-800Accountant offer both CPAs and tax preparers?

1-800Accountant's team comprises CPAs, EAs, bookkeepers, and experienced tax preparers, backed by innovative technology and our national tax platform. 

Work with a Tax Professional for Your Small Business

Whether you need a CPA for long-term planning or a tax preparer for fast and accurate filing, 1-800Accountant has a team of specialists who understand your business, state tax rules, and industry-specific requirements.

When you use our suite of professional accounting services, including business tax preparation, year-round advisory, bookkeeping, and audit defense, we match you with a tax expert or team who guides you through complex financial situations while maximizing your annual tax savings. Affordable, tax-deductible services guided by experts provide peace of mind and empower you to focus on your next small business milestone.