Do You Need a CPA for Your Small Business?

By Bill Stilwell · Last reviewed October 16, 2026

The short answer

Most small businesses benefit from a credentialed tax professional, especially in the first year. A certified public accountant (CPA), an enrolled agent (EA), or a tax attorney can advise on your business structure and taxes and can represent you before the Internal Revenue Service (IRS) on any matter. The IRS says anyone with a Preparer Tax Identification Number (PTIN) can be a paid preparer, so check credentials before you hire.

What this means

Tax help comes in several types:

CPA. Licensed by a state after passing the CPA exam. Many also help with financial controls and planning.
Enrolled agent. Licensed by the IRS after passing an IRS exam. EAs focus on tax.
Tax attorney. A lawyer who focuses on tax law.
Other paid preparers. They have a PTIN but no professional license. Skills vary a lot.

An IRS fact sheet explains that CPAs, EAs, and attorneys have unlimited representation rights. That means they can represent you on any tax matter, including audits, payment and collection issues, and appeals. Other preparers have limited rights or none.

Say a new roofing company forms a limited liability company (LLC) and starts making good money. A CPA or EA can explain whether an S corporation election makes sense (see 8.6.5 S Corporation Tax Election), set up quarterly estimated tax payments (see 10.1.5 Estimated Taxes), and flag whether any of the roofer’s work is subject to sales tax in that state.

Why it matters

Early choices are hard to undo. Business structure and tax elections affect every year after.
Missed deadlines bring penalties. Payroll taxes, estimated taxes, and sales tax all have their own calendars.
Bad preparers cost more than good ones. The IRS warns about “ghost” preparers who don’t sign returns and may disappear with your money.
You stay responsible. The IRS says you’re responsible for what’s on your return, no matter who prepares it.

Who this applies to

Every business that will file a business tax return, pay estimated taxes, run payroll, or collect sales tax. That’s nearly all of them.

A very small sole proprietor with simple income may be fine with a good preparer for the return. Still talk to a CPA or EA once before you choose a structure.

How to do it

Write down what you need: structure advice, tax returns, estimated taxes, payroll, sales tax, or all of these.
Ask other owners, your attorney, or your banker for names.
Search the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications for CPAs, EAs, and attorneys near you.
For a CPA, confirm the license with your state board of accountancy.
Interview 2 to 3 people. Ask how many clients they have in your industry and state.
Ask how they charge: per return, hourly, or a monthly fee for year-round help. Get it in writing.
Make sure they’ll sign the return and include their PTIN. A preparer who won’t sign is a red flag.
Sign an engagement letter that lists the work and the fees.
Agree on how your bookkeeper and tax pro will share records (see 6.3.3 Bookkeeper).
Add all tax deadlines they give you to your financial calendar (see 10.9.1 Financial Calendar).

What proof to keep

The signed engagement letter
A screenshot of the IRS directory or state board lookup showing their credential
Copies of every return they prepare, with their signature and PTIN
Their written advice on structure and tax elections

Keep these in your tax records folder.

Common mistakes

Waiting until tax season. The best advice comes before the year starts, not after it ends.
Hiring by price alone. Cheap returns can cost more in penalties and missed deductions.
Not checking credentials. A PTIN alone doesn’t show training.
Mixing up bookkeeping and tax work. A bookkeeper records transactions. A tax pro plans and files. You may need both.
Signing a return you didn’t read. Ask about anything you don’t understand.

When to get help from a pro

This page is about choosing that pro. When you interview a CPA or EA, ask:

Which business structure and tax election would you look at for a business like mine, and why?
Which federal, state, and local tax deadlines will I have this year?
Can you represent me if the IRS or my state contacts me?

Bill’s note

[Bill: add a short story or opinion here. For example, when you brought in a tax pro for SiteSmarty and what you’d tell a new owner about timing.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: how I found and checked my tax pro]
[What it cost and how long it took: fee type and first-year cost]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: the credential lookup and engagement letter]
[Result so far:]

Questions people ask

What’s the difference between a CPA and an enrolled agent? A CPA is licensed by a state and may offer accounting and tax services. An EA is licensed by the IRS and focuses on tax. Both can represent you before the IRS on any tax matter.

How do I check a tax preparer? Use the IRS preparer directory, and check a CPA’s license with your state board of accountancy.

Do I need a CPA right away? Talk to one before you choose your structure and before your first tax deadline. Ongoing help depends on how complex your business is.

Is a bookkeeper the same as a CPA? No. A bookkeeper records your money day to day. A CPA or EA advises on taxes and files returns.

Audit check

Question: Does the business use a credentialed tax professional whose credentials were checked and whose engagement is in writing?
Pass looks like: A CPA, EA, or tax attorney found in the IRS directory or state board lookup, a signed engagement letter, signed returns with a PTIN, and tax deadlines on the financial calendar.
Fail looks like: No tax professional. Credentials never checked. Unsigned returns. Tax deadlines tracked from memory.
Evidence to collect: The credential lookup screenshot, the engagement letter, and signed returns.

Where this fits

Do this first: 6.3.1 Business Attorney

Do this next: 6.3.3 Bookkeeper

Sources

Internal Revenue Service, "Choosing a tax professional" (checked October 16, 2026)
Internal Revenue Service, "Choosing a paid tax return preparer" (fact sheet FS-2018-5, marked archival by the IRS) (checked October 16, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.