Consider this a “watch-list” item.
A few years ago, I would have said that physical proximity was important.
If an accountant is a certified public accountant, they must be licensed to practice by the state in which he/she is practicing.
If Mr. Roy wants to have his accounting done in some state other than the one in which he is currently located I would argue that he can do so.
The rules of engagement would then be the rules of the state in which the accounting was being carried out – the state in which the accountant is licensed and does business.
If the accountant is an Enrolled Agent (EA) it would probably make no difference at all. Enrolled Agents are licensed by the Federal Government (IRS).
Can Accountants do Out-of-State Taxes?
Of course! you can use an out-of-state accountant if you want him to do the books, but if you need an audited statement, you should get someone licensed in your state.
That is because, you would need to email, fax, or mail him your invoice data, payroll information, bank information, etc.
If there is a large volume, you would be better off hiring a local bookkeeper and using a CPA to review books and prepare tax returns.
My only out-of-state clients have always had their own bookkeepers on-site and they send me their financial statements from which I provide year-end adjusting entries and prepare their tax returns.
However, If you want a good accountant to do your corporate taxes, it doesn’t really matter. It should be easy for them to access the state tax laws.
ALSO SEE: Can Accountants Work For Themselves?
Are CPAs allowed to Prepare Your Income Tax Return If You Live in a Different state than the CPA?
Yes, a CPA can prepare your income tax return, regardless of the state either of your live in.
My friend lives and works in Canada. She is an Illinois and Ontario CPA with staff and partners qualified in various states and provinces. Together, they prepare returns for people living in all 50 states and countries across the globe.
Personally, as a CPA, I do prepare a tax return for any state. And yes, while it is true that a local CPA would have a better understanding of your local state rules.
We all use the same 3 or 4 different tax programs and they for the most part take care of State/ federal differences. They don’t do it 100% but for most people, it works fine
I do returns for people in the following states: Michigan, Ohio, Illinois, Indiana, Wisconsin, Virginia, Texas, Florida, Georgia, New York, California, Arizona, New Hampshire, North Dakota, Missouri, and probably some others that I can’t think of off-hand.
Frankly, Pennsylvania is one of those states where you want someone who lives in PA (or at least is very experienced and knowledgeable in PA taxation, meaning does lots of PA returns) and knows PA taxation because even PA tax practitioners come up against arcane local/regional PA tax things where they need help. You don’t necessarily need a CPA either.
Is In-State or Out of State Better?
There are a few options for how to work with taxes, depending on your needs and preferences.
Checking in with an accountant by email can be done quickly, so you don’t need to go out of state for the sole purpose of communicating face-to-face.
However, there may be benefits to choosing someone that is local to your state because they would be more knowledgeable about local tax codes and regulations.
We’re happy to help – use the comment section to reach out to us if you have any questions on taxes!
Can an Out of State Accountant Do My Taxes?
Whether you’re an individual or a business, you can get your taxes done in any state other than Hawaii. All you need to do is hire a CPA that has mobility..
Worrying about hiring an accountant in the same state or a different state? Working with an accountant in a different state is LEGAL, so you have nothing to sweat.
As long as they are licensed in the United States, federal taxes work the same across the board. On the other hand, state regulations will always vary, so keep that in mind.
Always ensure that the financial professional you are contacting can help from a distance. They should be able to explain how their service is delivered and answer any questions you may have.
CPA Mobility; Is it even a Thing?
If you look for a qualified tax professional, you will need to be sure they are licensed in the state they are currently operating in. Once they reach this goal, mobility between states is possible.
CPA mobility is relatively new and allows certified public accountants to work in any state without needing to register in their home state.
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.
This is good news for certified public accountants since it lets them provide their services across all states without needing to register in each one.
So, thanks to this initiative, your Wisconsin business can hire a CPA in Utah if you desire. There are no boundaries unless you are dealing with Hawaii which does not adhere to CPA mobility.
Truth is – Hawaii does not have mobility. All other states mentioned in this blog post adopted mobility. CPAs are still licensed by state, and must abide by rules particular to those states.
There is no “national” CPA license.
Plus, lots of states now demand that tax preparers register with that state if the preparers perform any number of returns.
I believe Oregon is one such state, but that is only what I have read in passing. Some of the preparers doing taxes in 30 or 40 states may be relying too heavily on state tax software plug-ins that are not accurate.
Representation before the IRS is available from any CPA, attorney, or Enrolled Agent of the IRS (as well as people in a few other specialized occupations) who has filed a written statement with the Service that you have given them authority to represent you, which may include tax filings.
Normally this is the Form 2848. Since that is “federal”, a state cannot prohibit a CPA or attorney from another state from being the designate.