What credentials should an accountant have?

For small-business work, the credential that matters is CPA (Certified Public Accountant) — state-licensed, requires a bachelor's degree plus 150 credit hours, the Uniform CPA Exam, and supervised experience. CPAs can sign tax returns, represent you before the IRS, and provide tax strategy. Enrolled Agents (EA) are federally licensed by the IRS and can also represent you in audits but cannot audit financial statements. 'Tax preparer' with no credential is unregulated — anyone can call themselves one. For most small businesses, a CPA who also does bookkeeping is the right answer.

What's the difference between a CPA, an EA, and a tax preparer?

A CPA (Certified Public Accountant) is state-licensed, can prepare returns AND audit financial statements AND advise on tax strategy AND represent you before the IRS. An EA (Enrolled Agent) is federally licensed by the IRS, can prepare returns AND represent you before the IRS, but cannot audit financial statements. A tax preparer with no credential is unregulated — anyone can charge for tax prep without any license, exam, or continuing education. For business returns or anything with strategy/planning complexity, hire a CPA. For straightforward W-2-only individual returns, an EA or qualified preparer is often fine.

How much should I expect to pay an accountant?

Three pricing models: (1) Per-return tax prep — individual 1040 from $200-$600, S-Corp 1120-S from $1,200-$3,000. (2) Monthly bookkeeping — independent bookkeepers $200-$500/month, CPA-managed bookkeeping $500-$800/month. (3) Hourly advisory — CPAs typically $200-$500/hour for one-off consulting. Watch for hourly billing on tax prep (incentive misaligned with you), free initial consultations dressed up as sales calls, and surprise year-end cleanup fees on top of monthly bookkeeping. Flat-fee engagements are almost always better for small businesses.

What are red flags when interviewing accountants?

Five red flags: (1) They can't tell you their CPA license number or it doesn't verify on the state board website (Florida: myfloridalicense.com). (2) They quote you a price before understanding your business — usually means a generic engagement letter that won't fit. (3) They guarantee a specific refund or specific tax savings — illegal under IRS Circular 230. (4) They want to be the only signatory on your bank account, or want to receive your IRS refund directly. (5) They won't tell you who else works on your file. Any one of these is reason enough to walk.

How to Choose an Accountant for Your Small Business

How to Choose an Accountant for Your Small BusinessBy Timothy LeGendre, CPA · Florida License #AC62625 · Last reviewed 2026-05-25A Florida CPA's honest guide to picking the right accountant — what credentials matter, what to ignore, the questions that actually surface fit, and the red flags that mean walk away.Picking an accountant is one of the highest-leverage hires a small-business owner makes — and one of the least well-shopped. The three credentials that matter: CPA (Certified Public Accountant, state-licensed by the Florida Board of Accountancy, requires bachelor's degree plus 150 credit hours plus Uniform CPA Exam plus 1 year supervised experience, can prepare returns, represent in IRS audits, audit financial statements, and advise on tax strategy); EA (Enrolled Agent, federally licensed by the IRS, can prepare returns and represent in IRS audits but cannot audit financial statements); and tax preparer (no credential, unregulated, anyone can call themselves one). Verify any credential before hiring — Florida CPAs at myfloridalicense.com, EAs at the IRS RPO directory. Five questions that surface real fit: (1) Will I work with you personally or get handed off to a junior associate, (2) Do you handle both bookkeeping and tax prep or just one, (3) What's your pricing model — hourly, flat monthly, or per-return, (4) Are quarterly tax-planning check-ins included or extra, (5) Can you tell me about a client situation similar to mine. Five red flags that mean walk away: license number that doesn't verify on the state board lookup, a price quoted before understanding the business (generic engagement letter), guarantees of specific refunds or specific tax savings (illegal under IRS Circular 230), requests to be the only signatory on your bank account or to receive your IRS refund directly, refusal to disclose who else works on your file. Three pricing models: flat monthly fee with planning included ($500-$800/month for CPA-managed engagements) — best for ongoing small-business work; flat per-return (individual 1040 from $200-$600, S-Corp 1120-S from $1,200-$3,000) — best for one-time tax prep; hourly ($200-$500/hour) — works for one-off advisory, fails for ongoing engagements because the incentive misalignment means the accountant calls less and you self-serve more. Five triggers for switching accountants: silence between January and April, two consecutive years of tax-return surprises, unreturned calls, missed deadlines that cost money, and surprise mid-engagement fee changes.

Frequently asked questions

What credentials should an accountant have?: For small-business work, the credential that matters is CPA (Certified Public Accountant) — state-licensed, requires a bachelor's degree plus 150 credit hours, the Uniform CPA Exam, and supervised experience. CPAs can sign tax returns, represent you before the IRS, and provide tax strategy. Enrolled Agents (EA) are federally licensed by the IRS and can also represent you in audits but cannot audit financial statements. 'Tax preparer' with no credential is unregulated — anyone can call themselves one. For most small businesses, a CPA who also does bookkeeping is the right answer.
What questions should I ask before hiring an accountant?: Five questions that actually surface fit: (1) Will I work with you personally, or get handed off to a junior associate? (2) Do you handle both bookkeeping and tax prep, or just one? (3) What's your pricing model — hourly, flat monthly, or per-return? (4) Are quarterly tax-planning check-ins included, or extra? (5) Can you tell me about a client situation similar to mine? The first question filters out firms where the partner takes the meeting and a junior does the work. The last question filters out anyone who's never seen a business like yours.
What's the difference between a CPA, an EA, and a tax preparer?: A CPA (Certified Public Accountant) is state-licensed, can prepare returns AND audit financial statements AND advise on tax strategy AND represent you before the IRS. An EA (Enrolled Agent) is federally licensed by the IRS, can prepare returns AND represent you before the IRS, but cannot audit financial statements. A tax preparer with no credential is unregulated — anyone can charge for tax prep without any license, exam, or continuing education. For business returns or anything with strategy/planning complexity, hire a CPA. For straightforward W-2-only individual returns, an EA or qualified preparer is often fine.
How much should I expect to pay an accountant?: Three pricing models: (1) Per-return tax prep — individual 1040 from $200-$600, S-Corp 1120-S from $1,200-$3,000. (2) Monthly bookkeeping — independent bookkeepers $200-$500/month, CPA-managed bookkeeping $500-$800/month. (3) Hourly advisory — CPAs typically $200-$500/hour for one-off consulting. Watch for hourly billing on tax prep (incentive misaligned with you), free initial consultations dressed up as sales calls, and surprise year-end cleanup fees on top of monthly bookkeeping. Flat-fee engagements are almost always better for small businesses.
What are red flags when interviewing accountants?: Five red flags: (1) They can't tell you their CPA license number or it doesn't verify on the state board website (Florida: myfloridalicense.com). (2) They quote you a price before understanding your business — usually means a generic engagement letter that won't fit. (3) They guarantee a specific refund or specific tax savings — illegal under IRS Circular 230. (4) They want to be the only signatory on your bank account, or want to receive your IRS refund directly. (5) They won't tell you who else works on your file. Any one of these is reason enough to walk.