Life as a tax professional can be rewarding, especially when your work positively impacts your clients. But if you’re just starting out, choosing the right career path can be tricky.  

It doesn’t matter if you’re still in college or considering a career shift. The question is often the same: Do I become a tax preparer or a CPA? Both help people with their taxes, but the entry requirements and day-to-day work look pretty different. 

Tax preparers focus specifically on preparing and filing tax returns. Certified public accountants (CPAs) are licensed accounting professionals with a much broader scope, including audit, financial advisory, and tax planning. 

This article breaks down the key distinctions and similarities between CPAs and tax preparers to help you decide which path might be best for you. 

Key Points

• CPAs provide a wide range of services, including accounting, audits, and financial advising. Many CPAs work as public accountants or auditors. 
• The median annual wage for accountants and auditors is $83,680, compared with $54,920 for tax preparers, according to the US Bureau of Labor Statistics (BLS).  
• CPAs adhere to much stricter education and experience requirements than tax preparers. They must also pass the CPA exam for their license. 
• You could start as a tax preparer and learn on the job (or through free online training programs) before pursuing CPA licensure. 

What Is a Tax Preparer?

A tax preparer is someone authorized to prepare and file federal tax returns on behalf of individuals or small businesses. Their main goal is to lower clients’ tax liability and find the biggest tax breaks possible. They also work to file taxes correctly so clients are less likely to get audited. 

The barrier to entry is generally low. Most employers don’t require an advanced degree or certification. In fact, you could potentially become a tax preparer straight out of high school. You will need an IRS-issued Preparer Tax Identification Number (PTIN), though. 

Key Responsibilities

One of the biggest differences between a tax preparer and a CPA is what they do. There’s some overlap, but tax preparers generally have a narrower scope of practice. Their responsibilities typically include: 

• Meeting with clients to gather income and expense information 
• Preparing and reviewing tax returns 
• Identifying eligible deductions and credits 
• E-filing tax returns 
• Answering client questions during tax season 
• Corresponding with tax authorities on behalf of their clients 
• Offering financial guidance to clients 
• Keeping current on current federal and state tax codes 
• Providing basic bookkeeping services or year-round tax planning 
• Using bookkeeping or tax software (like TurboTax or Intuit QuickBooks) to run calculations and tax-planning scenarios 

Tax preparers, especially those specializing in small business tax, often work in accounting firms. Some start in junior roles and work their way up to more senior or management positions. 

How to Get Started

To become a tax preparer, you’ll need a PTIN from the IRS. This is required for anyone preparing federal returns for compensation. The online application takes about 15 minutes and costs $18.75. 

Entry-level tax preparers don’t need a college degree, and many employers offer on-the-job training. That said, candidates with some tax-related education behind them tend to stand out. 

You can boost your credibility (and chances of getting hired) by: 

• Completing coursework like Intuit Academy’s free tax preparation program 
• Pursuing enrolled agent (EA) certification; requirements include getting a PTIN, passing an exam, and completing 72 hours of continuing education every 3 years 
• Completing the IRS’s Annual Filing Season Program (AFSP), a voluntary IRS program for non-credentialed preparers who complete annual continuing education 

What Is a CPA?

A CPA is a state-licensed accounting professional who has met rigorous education, exam, and experience requirements. They also adhere to a strict code of ethics. 

CPAs can do everything tax preparers can do, and more. Since they receive specialized training, their career options are typically more expansive than those of a tax preparer. Many CPAs go on to become: 

• Accountants (general, corporate, forensic, government) 
• Compliance auditors 
• Tax advisors 
• Chief financial officers (CFOs) 
• Controllers 

Some CPAs run their own accounting firms, while others work in business or corporate environments. 

Key Responsibilities

So, what does a CPA do that a certified (or non-certified) tax preparer doesn’t? On top of everything a tax preparer handles, CPAs typically: 

• Audit financial statements 
• Analyze financial data for legal proceedings (forensic accounting) 
• Provide financial consulting and advisory services to support business decisions 
• Ensure regulatory compliance with IRS regulations 
• Represent clients before the IRS with unlimited representation rights 
• Offer individual and corporate tax planning 
• Prepare regulatory filings, such as Securities and Exchange Commission (SEC) reports for public companies 
• Provide risk consulting and business management services 

How to Become a CPA

Becoming a CPA requires more time and dedication than becoming a tax preparer. The specific requirements vary by state, but in general, you’ll need to: 

• Earn a college degree. Most states require a bachelor’s degree in accounting, finance, or a related field, plus additional coursework. The traditional path calls for 150 semester hours total, but a growing number of states now offer alternative pathways that let you substitute work experience for some of those credits. 
• Gain work experience. Most states require 1–2 years of supervised experience under a licensed CPA. States that allow the 120-hour pathway typically ask for an additional year. 
• Pass the 4-part CPA Exam. The Uniform CPA Exam has 4 parts — 3 Core sections plus 1 Discipline section you choose based on your area of focus. You’ll need a score of 75 or higher on each part. 
• Apply for your state license. Once you’ve met the education, exam, and experience requirements, you can apply through your state board of accountancy (application fees apply). 
• Follow American Institute of Certified Public Accountants (AICPA) ethical standards. CPAs are expected to act with integrity, serve the public interest, stay objective, and perform their work with due care. In some states, you also have to pass an ethics exam. 
• Complete continuing professional education (CPE) requirements to maintain licensure. Most states require around 40 CPE credits per year to maintain your license, though the exact number varies. 

Key Differences Between a CPA and a Tax Preparer

Choosing between becoming a CPA and a tax preparer is easier once you know what to expect from each. Here’s how the 2 roles stack up. 

Education and Qualifications

Tax preparers don’t require a college degree. The 1 mandatory credential is the IRS-issued PTIN, which you can apply for online. From there, optional training programs (like the AFSP) and certifications (like the EA) can boost your credibility and open more doors. 

CPAs have a steeper climb. Most states require a bachelor’s degree with specific accounting coursework, 1–2 years of supervised work experience, and a passing score on the Uniform CPA Exam. The traditional path includes 150 college credit hours, though a growing number of states now offer alternative pathways that trade extra coursework for additional experience. CPAs also need to complete continuing professional education each year to keep their license active. 

Scope of Work

Tax preparers focus on preparing and filing tax returns for individuals and small businesses. CPAs do all of that, plus audits, regulatory filings, financial advising, and year-round tax planning. CPAs, EAs, and tax attorneys have unlimited rights to represent clients before the IRS. 

Earning Potential

Pay for tax preparers largely depends on experience and location. According to the Bureau of Labor Statistics (BLS), the median annual wage in the US is $54,920, with experienced preparers and EAs earning more. 

CPAs tend to earn more across the board. According to the BLS, the mean wage for accountants and auditors is $83,680, and experienced CPAs can earn well into the 6 figures. 

Career Timeline

Tax preparers can often start working within weeks or months of completing a training program and obtaining a PTIN. Taking free tax courses online can help make landing that first job easier. 

It might take 5–7 years to become a CPA. This accounts for the time it takes to earn a bachelor’s degree (or higher) and obtain 1–2 years’ work experience. If you’re looking to get started quickly, tax preparation might be a better path, at least for now. 

CPA vs. Tax Preparer: At a Glance

	CPA	Tax Preparer
Education	120–150 semester hours (bachelor’s or master’s)	High school diploma or GED
Credential/licensure	CPA license (state-issued)	PTIN
Exam	4-part CPA Exam	None
Experience	1-2 years of supervised work experience	None
Scope of work	Preparing and filing tax returns, audit, advisement, regulatory filings, financial planning, IRS representation	Preparing and filing business and individual tax returns
IRS representation rights	Unlimited	Limited to none
Median annual salary (BLS)	$83,680	$54,920
Time to get started	5–7 years	Few weeks or months

Can You Go From Tax Preparer to CPA?

Yes, starting as a tax preparer is a perfectly good steppingstone toward CPA licensure. Here’s what that path can look like: 

• Get hired as a tax preparer to start building real-world experience. 
• Enroll in a bachelor’s degree program (full or part time). 
• Pick up additional credentials along the way, like Intuit Academy’s free tax preparation program, the AFSP, or EA certification. 
• Start studying for the CPA Exam once you’re close to meeting your state’s education and experience requirements. 

And you can do all of this while continuing to work in the field. 

Build Experience First

Starting as a tax preparer gives you a working knowledge of tax law and filing processes that’s hard to replicate in a classroom. You’ll also build confidence working with clients throughout complicated, sometimes stressful tax situations. 

This pays off in 2 ways. For starters, it makes you better at the job day to day. But it can also count toward your work experience requirement for CPA licensure in several states. 

Pursue Education Alongside Work

Plenty of bachelor’s programs run online or part time, which means you can earn credit hours at a pace that works with your schedule and budget. Some employers even offer tuition assistance for accounting-related coursework.

Level Up With Credentials Along the Way

Intermediate certifications like the AFSP or EA can boost your earning potential and credibility while you work toward the CPA. Online coursework, like Intuit Academy’s tax planning strategy track and Intuit Academy badges, is another way to keep building skills between bigger milestones. 

How to Decide Which Path Is Right for You

Choosing between the CPA and tax preparer path ultimately depends on how you want to take your career in tax and accounting. Here’s a quick way to think about it. 

Start as a Tax Preparer if…

You want to start working quickly without a degree, start here. You might also want to begin as a tax preparer if you’re not quite ready to commit to years of education. Tax preparers also tend to work seasonally, after all, making it a flexible entry point into the tax profession.  

Pursue CPA Licensure if…

Pursuing your CPA license might be better if you want the broadest range of career options in finance and accounting. This includes audit, advisory services, and client representation. 

The CPA is also a good choice if you’re willing to invest several years in education and exam prep. While there is a greater upfront investment, becoming a CPA does set you on the path to higher earning potential and leadership roles. 

Start Your Tax Career Today

Whichever path you choose, the outlook is strong. The BLS projects employment for accountants and auditors to grow 5% through 2034—faster than the average for all occupations. Tax preparers are projected to see similar 5–6% growth over the same period. 

And no matter which direction you go, building tax-related credentials along the way can help expand your expertise. Intuit Academy offers free, self-paced tax preparation training to help you get started. 

Enroll in a tax preparation course today. And when you’re ready to take your career a step further, check out tax jobs at Intuit. 

FAQs

Is becoming a tax preparer a good first step to becoming a CPA?

Starting out as a tax preparer can be a great way to gain on-the-job experience (which could eventually count toward CPA licensure requirements). You can also earn an income while pursuing further education or training. Plus, getting hands-on experience is a great way to determine if the tax industry is a good fit for you. 

Can tax preparers earn a solid living without becoming a CPA?

While the earning potential is higher for CPAs than for tax preparers, preparers can still earn a solid living. In fact, tax preparers earn a median annual wage of $54,920. The top 10% of earners bring in a median annual wage of $99,270. 

Do tax preparers also have CPE requirements?

CPAs are required to complete continuing professional education to keep their license active. Tax preparers don’t have a baseline CPE requirement just for holding a PTIN. But if you pursue additional credentials, continuing education comes with the territory: 

• Enrolled agents need at least 72 hours of CPE every 3 years (with a minimum of 16 hours per year). 
• AFSP participants need 18 hours of CPE each year to keep their Record of Completion (15 hours for exempt preparers).