How to find an Accountant
best way to find an
accountant is to determine exactly what services you will
need. Your needs may be straight forward and not that
complicated or you may have a business that you need you need tax
planning who can advise you in structuring an employee benefit plan and
retirement plans that offer your business the maximum in tax
savings. Once that is determined you can then ask for
referrals. A good place to start is with friends, business
acquaintances or other professionals that you may know. Are
you a member of a local Chamber of Commerce or a "service
club such as": Rotary Club? They are great sources for
what do I need?
We have listed information below to help you select the proper
person to do your taxes.
Certified Public Accountant
Public Accountant (CPA) is the statutory title of
accountants in the United States who have passed the Uniform Certified
Public Accountant Examination and have met additional state education
and experience requirements for certification as a CPA. Individuals who
have passed the Exam but have not either accomplished the required
on-the-job experience or have previously met it but in the meantime
have lapsed their continuing professional education are, in many
states, permitted the designation "CPA Inactive" or an equivalent
phrase. In most U.S. states, only CPAs who are licensed are able to
provide to the public attestation (including auditing) opinions on
financial statements. The exceptions to this rule are Arizona, Kansas,
North Carolina and Ohio where, although the "CPA" designation is
restricted, the practice of auditing is not.
Many states have a lower tier of accountant qualification (below that
of CPA), usually entitled "Public Accountant" (with designatory letters
"PA"). However the majority of states have closed the designation
"Public Accountant" to new entrants, with only about 10 states
continuing to offer the designation. Many PAs belong to the National
Society of (Public) Accountants.
Many states prohibit the use of the designations "Certified Public
Accountant" or "Public Accountant" (or the abbreviations "CPA" or "PA")
by a person who is not certified as a CPA or PA in that state. As a
result, in many circumstances, an out-of-state CPA is restricted from
using the CPA designation or designatory letters until a license or
certificate from that state is obtained.
Texas additionally prohibits the use of the designations "accountant"
and "auditor" by a person not certified as a Texas CPA, unless that
person is a CPA in another state, a non-resident of Texas, and
otherwise meets the requirements for practice in Texas by out-of-state
CPA firms and practitioners.
Many other countries also use the title CPA to designate local public
provided by CPAs
The primary functions CPA fulfill relate to
assurance services, or
public accounting. In assurance services, also known as financial audit
services, CPAs attest to the reasonableness of disclosures, the freedom
from material misstatement, and the adherence to the applicable
generally accepted accounting principles (GAAP) in financial
statements. CPAs can also be employed by corporations—termed
"the private sector"—in finance functions such as Chief
Financial Officer (CFO) or finance manager, or as CEOs subject to their
full business knowledge and practice. These CPAs do not provide
services directly to the public.
Although some CPAs serve as business consultants, the consulting role
is under scrutiny following the corporate climate in the aftermath of
the Enron scandal. This has resulted in divestitures in the consulting
divisions by many accounting firms. This trend has since reversed. In
audit engagements, CPAs are (and have always been) required by
professional standards and Federal and State laws to maintain
independence (both in fact and in appearance) from the entity for which
they are conducting an attestation (audit and review) engagement.
However, most individual CPAs who work as consultants do not work as
auditors. CPAs also have a niche within the income tax preparation
small to mid-sized firms have both a tax and an auditing department.
Whether providing services directly to the public or employed by
corporations or associations, CPAs can operate in virtually any area of
While some CPAs are
generalists and offer a range of services
(especially those in small practices) many CPAs specialize in just one
area and do not provide all the services listed above.
Assurance and Attestation
Corporate Finance (Merger
& Acquisition, initial public offerings, share & debt
(preventing, detecting, and investigating financial frauds)
especially as applied to accounting and auditing
Management Consulting and
Tax Preparation and Planning
In order to become a CPA in the United States, the
candidate must sit
for and pass the Uniform Certified Public Accountant Examination
(Uniform CPA Exam), which is set by the American Institute of Certified
Public Accountants and administered by the National Association of
State Boards of Accountancy. The CPA was established in law on April
Eligibility to sit for the Uniform CPA Exam is determined by individual
State Boards of Accountancy. Typically the requirement is a U.S.
bachelors degree which includes a minimum number of qualifying credit
hours in accounting and business administration with an additional 1
year study. This requirement for 5 years study is known as the "150
hour rule" and has been adopted by the majority of state boards,
although there are still some exceptions (e.g.California). This
requirement mandating 150 hours of study has been adopted by 45 states.
The Colorado State Board of Accountancy allows Chartered Certified
Accountants (ACCA), together with Chartered Accountants from eligible
jurisdictions (Australia, South Africa, Canada, Ireland, New Zealand)
automatic eligibility to sit for the Uniform CPA Exam as a Colorado
candidate. As of December 9, 2009, ACCA members are not automatically
eligible to sit for the Uniform CPA Exam.
Certain overseas qualified accountants seeking to become U.S. CPAs may
be eligible to sit for the International Qualification Examination as
an alternative to the Uniform CPA Exam.
The Uniform CPA exam tests general principles of state law such as the
law of contracts and agency (questions not tailored to the variances of
any particular state) and some federal law as well.
licensing and certification requirements
Although the CPA exam is uniform, licensing and certification
requirements are imposed separately by each state's laws and therefore
vary from state to state.
requirements for the CPA qualification can be summed up as the
Three Es—Education, Examination and Experience. The Education
requirement normally must be fulfilled as part of the eligibility
criteria to sit for the Uniform CPA and the Examination component is
the Uniform CPA itself. Some states have a two tier system whereby an
individual would first become certified as a CPA—usually by
passing the CPA exam. That individual would then later be eligible to
be licensed once a certain amount of work experience is accomplished.
Other states have a one tier system whereby an individual would be
certified and licensed at the same time when both the CPA exam is
passed and the work experience requirement has been met.
Two-tier states include Alabama, Florida, Illinois, Montana, and
Nebraska. The trend is for two-tier states to gradually move towards a
one-tier system. Since 2002, the State Boards of Washington and South
Dakota have ceased issuing CPA "certificates" and instead issue CPA
"licenses," and Illinois plans to follow suit in 2012.
A number of states are two-tiered, but require work experience for the
CPA certificate, such as Ohio.
The experience component varies from state to state:
The two-tier states generally
do not require work experience for a CPA certificate(it is required for
a license to practice).
states, such as Colorado
and Massachusetts, will waive the work experience requirement for those
with a higher academic qualification compared to the state's
requirement to appear for the Uniform CPA.
majority of states still
require work experience to be of a public accounting nature. However an
increasing number of states, including Oregon, Virginia, Georgia
Kentucky will accept experience of a more general nature in the
accounting area. This allows persons to obtain the CPA designation
while working for a corporation's finance function.
majority of states require
work experience to be verified by a licensed CPA. This can cause
difficulties for applicants based outside the United States. However,
some states such as Coloradoand Oregon will accept work experience
certified by a Chartered Accountant as well.
Over 40 of the state boards now require
applicants for CPA status to
complete a special examination on ethics, which is effectively a Fourth
E in terms of requirements to become a CPA. The majority of these will
accept the AICPA self-study Professional Ethics for CPAs CPE course or
another course in general professional ethics. Many states, however,
require that the ethics course include a review of that state's
specific rules for professional practice.
Professional Education (CPE)
CPAs are required to take continuing education courses in order to
renew their license. Requirements vary by state but the vast majority
require 120 hours of CPE every 3 years with a minimum of 20 hours per
calendar year. The requirement can be fulfilled through attending live
seminars, webcast seminars, or through self-study (textbooks, videos,
online courses, all of which require a test to receive credit). As part
of the CPE requirement, most states require their CPAs to take an
ethics course during every renewal period. Again, ethics requirements
vary by state but the courses range from 2–8 hours.
An accountant is required to meet the legal requirements of any state
in which they want to practice. Also, the term "practice of public
accounting" and similar terms are given definitions PA status under
reciprocity to a CPA licensed in another state. CPAs from other states
with less stringent educational requirements may not be able to benefit
from these provisions. This does not affect those CPAs who do not plan
to offer services directly to the public. Moreover, most states would
grant the temporary practicing rights to a CPA of another state.
An Enrolled Agent
(or EA) is
a tax professional recognized by the
United States federal government to represent taxpayers in dealings
with the Internal Revenue Service (IRS). The profession has been
regulated by Congress since 1884.
To become an Enrolled Agent an applicant must pass the Special
Enrollment Examination or present evidence of qualifying experience as
an Internal Revenue Service employee. A background check, including a
review of the applicant’s tax compliance, is conducted. The
IRS also requires Enrolled Agents to complete 72 hours of continuing
professional education every three years.
The position of Enrolled Agent was created as a reaction to fraudulent
war loss claims in the wake of the American Civil War. Unlike the
highly trained, tested, and continually educated professionals of
today, the first "EAs" were appointed with little or no qualifications
other than a minimal background in bookkeeping. According to the
National Association of Enrolled Agents there are
currently about 46,000 practicing EAs in the United States.
The right to practice before the Internal Revenue Service is regulated
by Federal statute, and persons authorized to practice are known as
"Federally Authorized Tax
Practitioners," or "FATPs".
The FATP status
is granted to attorneys, Certified Public Accountants, Enrolled Agents,
Enrolled Actuaries, and to persons in a few other categories.
Enrolled Agents, like other FATPs, are subject to a set of procedures
and regulations described in Treasury Department Circular No. 230,
Regulations Governing the Practice of Attorneys, Certified Public
Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before
the Internal Revenue Service (or Circular 230). FATPs are allowed to
represent taxpayers in all proceedings before the Internal Revenue
Service including audits and appeals.
United States Tax Court
Enrolled Agent status does not automatically allow the enrollee to
practice before the United States Tax Court. That practice is limited
to members of the Bar of the Court. The Internal Revenue Code states
that "no qualified person shall be denied admission to practice
before the Tax Court because of his failure to be a member of any
profession or calling." Bar membership for non-attorneys requires that
the applicant pass a Tax Court examination. Attorneys are admitted to
the Bar of the Tax Court without having to take the examination.
Practice before the United States district courts, bankruptcy courts,
courts of appeal, and Supreme Court of the United States is limited to
Tips for Choosing a
If you pay someone to prepare your tax return,
choose that preparer
wisely. Taxpayers are legally responsible for what’s on their
own tax returns even if prepared by someone else. So, it is important
to choose carefully when hiring an individual or firm to prepare
personal returns. Most return preparers are professional,
honest and provide excellent service to their clients. Here are a few
points to keep in mind when someone else prepares your return:
It’s important for taxpayers to find
professionals if they need help preparing and filing their tax returns.
Unqualified tax preparers may overlook legitimate deductions or credits
that could cause clients to pay more tax than they should. Unqualified
preparers may also make costly mistakes causing their clients to incur
assessed deficiencies, penalties, and interest. Here are some
suggestions to consider when hiring a tax professional:
A Paid Preparer is required
law to sign the return and fill in the preparer areas of the form. The
preparer should also include their appropriate identifying number on
the return. Although the Preparer signs the return, you are responsible
for the accuracy of every item on your return. In addition, the
preparer must give you a copy of the return. Review the completed return
ensure all tax information, your name, address and Social Security
number(s) are correct. Make sure that none of these spaces is left
Review and ensure you
understand the entries and are comfortable with the accuracy of the
return before you sign.Never sign a blank return,
never sign in pencil.
If you have provided specific
authorization in a power of attorney filed with the IRS, you may have
copies of notices or refund checks mailed to your preparer or
representative; but only you can sign and cash your refund check.
A Third Party Authorization
Check Box on Form 1040 allows you to designate your Paid Preparer to
speak to the IRS concerning how your return was prepared, payment and
refund issues and mathematical errors.
A paid preparer must sign the
return as required by law.
Avoid preparers who claim
can obtain larger refunds than other preparers. If your returns are
prepared correctly, every preparer should derive substantially similar
- Beware of a preparer who
guarantees results or who bases fees on a percentage of the amount of
the refund. A practitioner may not charge a contingent fee (percentage
of your refund) for preparing an original tax return.
Understand that the most
reputable preparers will request to see your receipts and will ask you
multiple questions to determine your qualifications for expenses,
deductions and other items. By doing so they have your best interest in
mind and are trying to help you avoid penalties, interest or additional
taxes that could result from an IRS examination.
Choose a preparer you will be
able to contact and one who will be responsive to your needs. Ask who
will actually prepare the return before engaging services. Avoid firms
where your work may be delegated down to someone with less training or
some unknown worker. You should know exactly who works with your tax
matters at all times and how to contact him or her; after all, you are
paying for it. Determine if the preparer is exporting your return to a
foreign country for preparation. Foreign countries do not have the same
security and privacy laws as the United States nor is there any
recourse should your information be compromised as a result of lax or
nonexistent privacy procedures.
Investigate whether the
preparer has any questionable history with the Better Business Bureau,
the state’s board of accountancy for CPAs, the
state’s bar association for attorneys or the IRS Office of
Professional Responsibility (OPR) for enrolled agents or the oversight
agency in states that license or register tax preparers.
Determine if the
preparer’s credentials meet your needs or if your state
mandates licensing or registration requirements for paid preparers. As
of 2008, California and Oregon are the only two states that regulate
paid tax preparers. Is he or she an Enrolled Agent, Certified Public
Accountant (CPA) or Tax Attorney? Only attorneys, CPAs and enrolled
agents can represent taxpayers before the IRS in all matters including
audits, collection actions and appeals. Other return preparers may
represent taxpayers only in audits regarding a return that they signed
as a preparer.
Find out if the preparer is
affiliated with a professional organization that provides or requires
its members to pursue continuing education and holds them accountable
to a code of ethics.
Check IRS.gov for information
regarding abusive shelters and other tax schemes and scams. Remember,
if it sounds too good to be true, chances are it is.
The IRS can help many
taxpayers prepare their own returns without the assistance of a paid
preparer. Before seeking a paid preparer, taxpayers might consider how
much information is available directly from the IRS through the IRS Web
site. Check out these helpful links:
Unfortunately, unscrupulous tax return preparers
do exist and can cause
considerable financial and legal problems for their clients. Examples
of improper actions by unscrupulous preparers include the preparation
and filing of false paper or electronic income tax returns that claim
inflated personal or business expenses, false deductions, unallowable
credits or excessive exemptions.
Tax evasion is both risky and a crime, punishable by up to five years
imprisonment and a $250,000 fine. Remember, no matter who prepares a
tax return, the taxpayer is legally responsible for all of the
information on that tax return.
Report suspected tax fraud and abusive return preparers by completing
Form 3949-A and mailing it or a letter with similar information to:
Fresno, CA 93888
IRA, or Individual
Retirement Account is an arrangement allowing individuals to save money
for retirement in a tax-advantaged manner. You can put practically
anything into your IRA—stocks, CDs, mutual funds, cash,
bonds—but not options and other derivatives. Anyone who
works, whether self-employed or as an employee of a company, can set
aside funds in an IRA for the previous tax year.
What is an IRA?
IRA Income Limits for 2011
In 2011, the modified adjusted gross income or AGI contribution limits
for traditional IRAs were raised. If you are covered by a
retirement plan at work, then your tax-deductible contribution to a
traditional IRA is phased-out if:
If your tax
filing status is married filing separate
returns, then your
deductible phase out starts at under $10,000.
Your filing status is married
filing jointly, and your AGI is more than $90,000 but less than
Your filing status is single
or head of household, and your AGI is more than $56,000 but less than
IRA Contribution Limits in 2010 and 2011
In 2010, the employer salary-reduction contribution that applies to
SIMPLE IRAs remained at $11,500. For workers that are age 50
and older, your employer can make additional "catch up" contributions
of $2,500, bringing the total contribution limit in 2010 for SIMPLE
IRAs to $14,000. In 2011, the employer salary-reduction
contribution remains at $11,500, keeping the total contribution limit
Unlike pensions and 401(k) plans, your employer does not run IRAs. Just
ask a bank, brokerage, or other financial institution for an
application and make a contribution. Your IRA account will grow
tax-free until you withdraw the money—generally after you
retire. With a traditional IRA, you may even be able to deduct the
contribution from your taxable income for the same year the
contribution was made.
What is a Roth IRA?
work differently than traditional IRAs. While you generally deduct
contributions to traditional IRAs and pay tax when you withdraw the
money, the opposite is true for Roth IRAs. With Roth accounts, you
can’t deduct your contributions. But when you retire, you can
withdraw both contributions and earnings tax free—your money
grows for free. There is no age limit to open a Roth IRA, but there are
some income limitations.
Roth IRA Income Limits
From 2010 to 2011, the allowable income limits for making a Roth IRA
contribution changed for each tax filing status.
Those Married and Filing Jointly can contribute a maximum of...
$6,000 if you're over 50 and
your combined earned income is
$169,000 or less
$5,000 if you're under 50 and
your combined earned income is
$169,000 or less
$0 regardless of age if your
combined earned income is more
If your earned income is somewhere between $169,000
and $179,000, your 2011 maximum contribution limit phases out.
Those who are filing as Single or Head of Household can contribute a
$6,000 if you're over 50 and
your combined earned income is
$107,000 or less
$5,000 if you're under 50 and
your combined earned income is
$107,000 or less
$0 regardless of age if your
combined earned income is more
If your earned income is somewhere between $107,000
and $122,000, your 2011 maximum contribution limit phases out.
Roth IRA Contribution Limits
While the IRS theoretically limits your ability to make a Roth IRA
contribution based on your taxable income, anyone can fund a Roth IRA
Because in January 2010, Congress abolished the $100,000 adjustable
gross income (AGI) limit on Roth IRA conversions. This means anyone,
regardless of income, can convert to a Roth IRA.
And since anyone, regardless of income, can make non-deductible
contributions to a Traditional IRA - this enables anyone to max out
contributions to their Traditional IRA and then convert to a Roth IRA.
This effectively eliminates the Roth IRA contribution income limits for
2011 and all future years.
Roth IRA Maximum Contribution
From 2010 to 2011, the maximum contribution limits for a Roth IRA did
Assuming you qualify to make the maximum contribution, the amounts you
can contribute are as follows:
However, keep in mind that these amounts fluctuate
according to your personal level of adjustable gross income (AGI). If
your income surpasses the established IRS threshold, your max
contribution amount phases out.
$5,000 if you're under age 50
$6,000 if you're over age 50
Consumers' Research Council of America has compiled a list of Top
Accountants throughout the United States by utilizing a point
value system. This method uses a point value for criteria that we
deemed valuable in determining top financial planning
criteria that was used and
assessed a point value is as follows:
Each year the Accountant
has been in practice
A bachelors degree;
Minimum of 20 semester units in accounting and business related subjects
||Membership in professional Accounting related
associations and/or organizations
and Continuing Education:
Completing advanced accounting
courses of study and meeting all
requirements and resulting in receiving a professional accounting
designation and/or title. Completing continuing education
put, Accountants that have accumulated a certain amount
of points qualified for the list. This does not mean that Accountants
did not accumulate enough points are not good Accountants. They
merely did not qualify for this list because of the points needed for
qualification. Since this is a subjective call, there is no study that
is 100% accurate. As with any profession, there will be some degree of
variation in opinion. If you survey 100 clients using a particular
accounting firm on their satisfaction, you will undoubtedly hear that
some are very satisfied, some moderately satisfied and some
dissatisfied. This is really quite normal.
that a point value system takes out the personal and emotional factor
and deals with factual criteria. Wehave
made certain assumptions. For example, we feel that more years in
practice is better than less years in practice; more education is
better than less education and completing a rigorous course to obtain
an Accounting designation and certification is better that not having
Accountants list that we have compiled is current as of a
certain date and other Accountants may have qualified since that
date. Nonetheless, we feel that this list of Top Accountants is
a good starting point for you to find a qualified specialist.
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