For the well-traveled individual or business owner, you might be asking yourself where you can legally file your taxes. Should you file with an out-of-state accountant? Or, should you file with a CPA located where you conduct primary business? You might also be wondering, can a CPA do taxes in any state?
The short answer here is yes. Thanks to CPA mobility, you can do your taxes in any state other than Hawaii (unless you live there). CPA mobility allows firms to provide all services across state lines without having to register in each state. This provides individuals with an immense amount of freedom and flexibility when it comes time to file taxes.
Keep reading to learn how, why and what really matters when filing taxes with an out-of-state accountant and the value of having a CPA do your taxes.
(Wondering why you should consider Hiring a CPA to File Your Taxes instead of using a mass market provider? Read our blog here.)
What if I Live in a Different State?
So, what if you are an individual or a business that operates in one state but wants to hire an accountant from another? Well, there is good news here; it is possible. In fact, you can LEGALLY work with an accountant in another state to handle both your state and federal tax information.
Since federal taxes work the same across the board, it doesn’t matter where you live as long as it is in the USA. Of course, this consistency makes filing or paying federal taxes extremely easy for both the individual and the accountant. On the other hand, state regulations will always vary, so keep that in mind.
Always reach out to your prospective finance professional first to ensure they can actually help you from afar. They should be able to tell you how the process works and what to expect from their firm.
Can a CPA practice in any state?
If you are getting your taxes done by a CPA, the CPA must be licensed to practice in the state they are currently operating in. Each state has its own set of regulations and requirements for licensed professionals, which does mean that the rules for CPAs can vary from state to state. However, being a licensed CPA in any US state does enable a CPA to provide services in other states (with the exception of Hawaii). Proper licensing ensures they are a credible business and are authorized to perform tax-related services. Once a license has been gained, interstate mobility can be accessed, similar to how a driver’s license works.
If a CPA wanted to move to another state, reciprocity between jurisdictions would allow individually licensed CPAs to get a reciprocal license in another state. To offer services to clients in another state does not require any additional licensing thanks to CPA mobility.
CPA Mobility
CPA mobility is a relatively recent initiative that was passed in 2014 by the AICPA – NASBA. Its purpose was to allow out-of-state flexibility for practicing CPAs and accountants. That means a certified public accountant can provide services across all states without needing any additional licenses in the state where they will be serving a client or an employer. CPA mobility was enacted to help develop a uniform system across the United States that ensures strong regulatory protection and eliminates unnecessary burdens that do not protect the public interest.
So, thanks to this initiative, a CPA can do taxes in any state. That means your Wisconsin business can hire a CPA in Utah if you desire. There are no boundaries unless you are dealing with Hawaii who does not adhere to CPA mobility.
Is In-State or Out of State Better?
That depends on your financial needs and personal preference. We live in a digital age, so it is quick and easy to email your CPA and correspond that way. So, opting for a local accountant purely for communication purposes is not 100% necessary.
You might feel more comfortable working with someone within your state since they will be more familiar with its inner workings. However, any CPA or accountant from any state can quickly search for tax laws and regulations that are specific to any location.
No matter where you do your taxes, you’ll always have to follow the laws that correspond to your home state as well.
Do you need a CPA to do taxes?
Most states do not require professionals to have a CPA license to perform tax preparation or other services related to taxes. However, there are distinct advantages to having a CPA do your taxes, especially for businesses.
Three Benefits of hiring a CPA to do your taxes
- Maximize your tax deductions
- Peace of mind
- Knowledgeable on changes to the tax code and tax laws
Do you still have questions about this topic or another? Ask away. Or you can give us a call at 319-396-5660. The entire accountants Cedar Rapids team here at John Freeman CPA is here to help.