Tax accountant for a small business: what they do, credentials and representation rights

What a tax accountant does for a small business

The Bureau of Labor Statistics groups tax accountants with accountants and auditors. Its list of their duties includes computing taxes owed, preparing tax returns and making sure taxes are paid properly and on time.

The same profile lists work beyond the return itself. Accountants examine financial statements to make sure they are accurate and comply with laws and regulations. They inspect account books and accounting systems for efficiency and accepted accounting procedures, and identify potential fraud risks. They also suggest ways to reduce costs, enhance revenues and improve profits.

BLS says some public accountants concentrate on tax matters, advising corporations about the tax advantages of certain business decisions or preparing individual income tax returns.

• BLS: Accountants and auditors (Occupational Outlook Handbook)

CPA, enrolled agent or PTIN preparer: what each can do

The IRS says any tax professional with a PTIN is authorized to prepare federal tax returns. The big difference between them is representation rights: who can speak for the business when the IRS has questions.

Enrolled agents are licensed by the IRS. They pass a suitability check and a three-part Special Enrollment Examination covering federal tax planning, individual and business return preparation, and representation, and they complete 72 hours of continuing education every 3 years. The IRS charges $317 per exam part, and the enrollment application on Form 23 costs $140.

CPAs are licensed by state boards of accountancy, the District of Columbia and U.S. territories. They have passed the Uniform CPA Examination, completed a study in accounting at a college or university, and met experience and good character requirements. BLS adds that all states require CPA candidates to complete 150 semester hours of college coursework, 30 more than a usual 4-year bachelor's degree. The IRS notes that CPAs offer a range of services and some specialize in tax preparation and planning.

• IRS: Understanding tax return preparer credentials and qualifications
• IRS: Enrolled agents frequently asked questions
• BLS: Accountants and auditors

How to check a tax accountant

• PTIN: everyone paid to prepare a federal return must have one. The IRS says to make certain your preparer has one and enters it on the return filed with the IRS, though it isn't required on the copy they give you
• Annual renewal: all PTINs expire on December 31 and must be renewed. Renewal opens in mid-October for the following year, and the fee is $18.75 for both 2026 and 2027
• Signature: on a business return such as Form 1120, a paid preparer signs the return, includes their PTIN and gives the taxpayer a copy
• IRS directory: the IRS runs a public, searchable directory of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, enrolled actuaries and Annual Filing Season Program record holders
• Training: the IRS says preparers with PTINs who aren't in the directory may still do quality work, and to always ask about their education and training

• IRS: Understanding tax return preparer credentials and qualifications
• IRS: PTIN application and renewal FAQs
• IRS: Instructions for Form 1120

The business tax work a tax accountant handles

The IRS says your form of business determines which income tax return you file. The most common forms are the sole proprietorship, partnership, corporation and S corporation.

• Self-employed owners: generally file an annual return and pay estimated tax quarterly, including self-employment tax and income tax. A return is required with $400 or more of net earnings from self-employment. Business profit or loss goes on Schedule C, and Form 1040-ES is used to figure estimated tax
• LLCs: an LLC with more than one owner is generally treated as a partnership and files Form 1065. A single-member LLC is generally disregarded and reported on the owner's return. An LLC can file Form 1120 only if it has filed Form 8832 to be taxed as a corporation
• Corporations: unless exempt under section 501, every domestic corporation must file an income tax return whether or not it has taxable income. Form 1120 is generally due by the 15th day of the 4th month after the tax year ends. S corporations file Form 1120-S instead
• Estimated tax for corporations: installments are required if the corporation expects $500 or more of tax for the year, due by the 15th day of the 4th, 6th, 9th and 12th months of the tax year
• E-filing: a corporation that files 10 or more returns of any type in a calendar year must e-file Form 1120
• Extensions: Form 7004 requests an automatic extension of time to file and generally must be filed by the return's regular due date
• Records: records that support an item of income, deduction or credit usually must be kept for 3 years from the date the return is due or filed, whichever is later

• IRS: Self-employed individuals tax center
• IRS: Instructions for Form 1120

What late or missed filings cost

Much of a tax accountant's value is getting returns and payments in on time. The IRS penalties show why.

• IRS: Instructions for Form 1120
• IRS: Failure to file penalty

What tax accountants earn

BLS reports a median annual wage of $83,680 for accountants and auditors in May 2025. The lowest 10% earned less than $56,020 and the highest 10% more than $144,090. In the accounting, tax preparation, bookkeeping and payroll services industry, the median was $81,490.

BLS projects employment of accountants and auditors to grow 5% from 2025 to 2035, with about 115,300 openings a year on average. These are wages for the job, not what a firm charges a client. The official sources don't publish client fees.

Aldro's team prepares and files business returns for one flat yearly price that covers everything tax, including Schedule C, Form 1065, Form 1120-S, Form 1120 and their state returns.

• BLS: Accountants and auditors