How to Choose the Right Tax Professional for Your Business

Managing taxes is one of the most challenging tasks for any business owner. Even small errors can lead to fines, penalties, or missed opportunities for deductions.

According to the IRS, in 2021, paid return preparers prepared 53% of individual income tax  returns, with approximately 58% of those prepared by non-credentialed return preparers. Business taxes are even more complex, often involving multiple revenue streams, employee payroll, and industry-specific deductions.

This article will guide you through understanding the different types of tax professionals and how to choose them wisely.

Types of Tax Professionals

Before you can pick the right tax professional for your business, it’s important to understand the different types available. Since each specializes in different areas, knowing who does what will make your decision much easier.

1. CPA (Certified Public Accountant)

Certified Public Accountants, or CPAs, are licensed by state boards of accountancy and have passed rigorous exams to earn their designation. They provide a broad range of services, from preparing complex tax returns to auditing financial statements and offering strategic financial planning advice. CPAs are especially useful for businesses that deal with multiple income sources, inventory management, or complicated accounting needs.

2. EA (Enrolled Agent)

Enrolled Agents are federally authorized tax practitioners specializing in tax matters, including representing clients before the IRS. They have passed a three-part IRS exam or have significant experience as former IRS employees.

EAs are especially skilled in resolving complex tax issues, negotiating payment plans, and ensuring compliance with ever-changing tax codes. Understanding the difference between an enrolled agent versus a CPA is key when deciding which professional fits your business needs. Some businesses prefer EAs for hands-on IRS representation or when facing specific tax challenges. Companies like DelReal Tax can help you evaluate whether a CPA, EA, or other tax professional best suits your business, ensuring accurate filings and peace of mind.

3. Tax Preparer

Tax preparers assist with preparing and filing tax returns but typically do not offer auditing, planning, or representation services. They are ideal for small businesses or startups with straightforward financial situations. While they may have less formal training than CPAs or EAs, many tax preparers hold valid Preparer Tax Identification Numbers (PTIN) issued by the IRS. Evaluating your business’s complexity will help determine if a tax preparer is sufficient or if a CPA or EA would be a better fit.

With these distinctions in mind, you’ll have a clearer picture of which professional best fits your business needs, making it easier to move forward with confidence.

Understand Your Business Needs

Before hiring any tax professional, it’s essential to clearly understand your business’s needs. Consider the size of your company, the volume of transactions, and whether you operate in an industry with unique tax rules.

Some businesses only need assistance filing annual returns, while others require ongoing tax planning, audit support, or strategic financial advice. Seasonal businesses may have fluctuating requirements, whereas year-round operations might benefit from continuous oversight. Mapping out your specific requirements ensures that you hire someone with relevant expertise.

Knowing exactly what services you need also prevents overpaying for unnecessary assistance or working with someone who cannot handle your tax complexity.

Set Your Budget

Cost is always a consideration when hiring a tax professional. CPAs generally charge higher fees because of their extensive expertise and range of services. EAs may offer specialized services at a lower cost, and tax preparers usually have the most affordable rates for basic filing.

However, focusing solely on price can be misleading. Consider the value provided — accurate filings, savings from deductions, and avoiding IRS penalties often outweigh initial fees. Setting a budget aligned with your business’s needs helps you evaluate options effectively.

Sometimes investing slightly more in a qualified professional can save significant time, money, and stress in the long run.

Check Credentials & Experience

Ensuring your tax professional has proper credentials is crucial. Verify licenses, PTIN numbers, and any relevant certifications. Experience in your industry is also highly valuable — an accountant familiar with manufacturing, retail, or service businesses will better understand industry-specific deductions and challenges.

Checking reviews, references, or professional affiliations provides additional reassurance. Experience combined with credibility ensures that your financial data is in safe hands. The right professional will not only file taxes accurately but also provide strategic advice tailored to your business operations and goals.

Communication & Availability

Even a highly qualified tax professional is only useful if they communicate effectively. Choose someone who explains tax rules in clear, understandable terms and responds promptly to questions. A proactive professional will alert you to potential issues before they become problems.

Accessibility is key — your tax advisor should be available during crucial filing periods and for ongoing consultations. Good communication builds trust and ensures you can make informed decisions without confusion or delays. Businesses benefit when their tax professional acts as a partner rather than just a service provider.

Conclusion

Choosing the right tax professional can significantly affect your business’s financial health. CPAs, EAs, and tax preparers each play distinct roles, and understanding their differences ensures you select the best fit. For businesses seeking guidance, considering your needs, budget, credentials, and communication style is crucial. When deciding between a CPA, EA, or another tax professional, understanding the difference helps clarify the best choice. Experts assist in navigating these decisions, ensuring your business stays compliant, efficient, and well-prepared for any tax challenge.