Accountant v/s Tax Preparer: The Ultimate Difference
We use different tools for the different tasks you perform in your daily life. The same concept is applied to taxes also. Therefore, there is a huge difference between Birmingham accountants and tax preparers. Also, it is very important to clear up all the misconceptions we have that all the accountants are tax preparers.
Birmingham accountants usually have a vast knowledge about the different functions of accounting and their expertise in particular areas. It takes four to five years in completing the bachelor’s and master’s degrees in accounting. In these years, you will get to know about different types of accounting. You also tend to focus on the type of accounting you want to pursue in your career.
Moreover, accountants come under three different fields: taxation, compliance, and managerial.
Accountants who focus on managerial accounting tend to learn about budget forecasting, variance analysis, and many other accounting metrics. They maintain and control accounts by preparing and recommending policies and procedures. These metrics are essential for running a business efficiently. They also monitor costs for their employer. This ideally makes them the Chief Officer of the company.
Accountants who want to opt for compliance as their career option generally learn auditing courses. These courses cover different types of accounting frauds, methods for uncovering fraudulent activities, the internal control that a company should have to save them from illegal activities as well as the steps are taken to expose fraud. The ultimate goal of this career path is to become an associate of the firm.
Another and the final broad category is Birmingham tax accountants. Accountants pursuing this field take years of training and experience in this field. Tax accounting is also very complex. While working with your clients, you have to constantly take care of the numerous tax implications. Birmingham tax accountants help their clients by preparing financials. This gives them the advantages of tax breaks and discounts. Usually, a bigger business with a higher earning hires tax accountants.
Tax Preparer is neither an accountant nor a CPA. People with no background or degree can also study tax codes and be certified tax preparers. However, you have to be updated with taxation rules and critical thinking.
Tax preparers have to follow certain rules and regulations before or while filling up the personal or business tax returns. Tax preparer with more experience has both advantages and complications at the same time. It is more likely to hire CPA/Tax accountants to handle your tax records. However, small businesses will not get any benefit from hiring an expensive tax preparer to justify the costs.
There are also some similarities between accountants and tax preparers. However, CPA and tax accountants can help you in filing your taxes. But the tax preparer will not help you with tax accounting/ tax advisory needs. With finances, you never want to cut corners. So, make sure you get the best and qualified professional whom you can trust blindly.
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