Can An Out of State Accountant Do My Taxes? (Must Knows)

Want to find a CPA but don’t know where to look? Aside from CPA that may be near you, you can often hire one online or in a different state. While there are some requirements, usually an out of state accountant can do your taxes. We’re going to go over the must knows before engaging an out of state accountant or CPA to file your taxes. Sometimes it can even be beneficial to hire an out of state CPA, we’ll explain that too.

hiring out of state accountant

Can You Hire an Out-of-State Accountant? (Yes!)

It would be pretty difficult if CPAs couldn’t file returns for other states. You’d be locked to having a CPA in the same state as you. Luckily due to CPA mobility, you can have a CPA in any state complete your state taxes. The responsibility is on them to make sure they comply from state to state but technically they can and it is legal to file tax returns for other states.

The one issue is Hawaii. You need a Hawaii CPA when it comes to Hawaii state returns or a CPA needs a temporary permit before providing tax services.

From a federal perspective, there is no question. Any CPA can file your federal returns, it doesn’t matter which state they are from.

Read More:

How to File a Tax Extension (The Steps You Need to Know)

What is CPA Mobility?

Thankfully, back in 2014, AICPA- NASBA passed a ruling that could allow CPAs to work out of state. This is what makes it legal for a Maryland CPA to fill out Pennsylvania taxes or numerous other states.

It doesn’t just apply to taxes though. CPAs can perform audits, reviews, examinations and engagements under PCAOB standards too. NASBA went ahead and set up a tool post the ruling so CPAs can be sure where they have mobility. For taxes, it is less stringent. The only state where there is a hurdle is Hawaii as mentioned previously.

Can a CPA Operate in Any State? ( Not Necessarily) 

If you are strictly talking about taxes then yes, a CPA can operate or practice in any state except for Hawaii where the CPA needs to check on a temporary permit or you could just use a Hawaii CPA.

For other services like audits, mobility is more limited. Places like Hawaii offer zero mobility to CPAs outside of Hawaii when it comes to audits. It’s important that CPAs look at each service, assess their home state and where they will be providing services before accepting work in any state.

Pros of Hiring an Out of State Accountant/CPA

Several benefits come to mind when hiring an out of state accountant to do your taxes:

Knowledge – An out-of-state accountant may have expertise in tax issues that your local accountant does not. Some accountants specialize in taxes for online entrepreneurs. Others are great in estate taxes. There are CPAs that work with actors and athletes. Just because there is a CPA down the street doesn’t mean they are the best choice if you have a complex situation.

Convenience – The internet has obviously made it easier than ever to work with an out-of-state accountant. You can share documents securely and get in touch with your CPA at any time. Gone are the days when you need to drive to an office just to get your tax return done.

Living Outside the U.S. –  Need your U.S. taxes completed but are an expat? Then you have to settle for an out of state accountant. Often the best course of action is to use a CPA who is willing to meet virtually. 

You’ve Moved –  Maybe in the prior year you lived in Utah but now you live in Texas. Thanks to CPA mobility you can keep your accountant that you had in the prior year. It actually makes a lot of sense to hire an accountant outside of your current state.

Read More:

Can You File Taxes Without W2? Here’s How You Can

What to Know Before Hiring an Out of State CPA

out of state cpa

Even though you basically have a green light to hire an out of state CPA for your taxes, there are a few things to keep in mind:

Technology – Ask the potential CPA how they onboard a new client. Do they use calls, emails or virtual calls? Can they accept scanned documents or do they need mailed originals? They are all important technology questions to ask an out of state CPA.

State Tax Laws – Every state has different tax laws, and it’s important to make sure that the CPA you are in touch with is familiar with the tax laws in your state. If they aren’t then usually it isn’t a deal breaker as they can get up to speed and do use professional tax software but it is something to consider.

Communication – When you are working with a CPA that is far away, how will you get in touch? It goes back to technology but make sure you clarify their preference for communicating, your preference and expected response times.

Fees – Before you hire on an accountant or CPA, make sure you clarify if they charge by the hour or flat fees. Are overruns applicable? It’s good to ask.

Credentials – The last thing you need to ask and check, is if the accountant is a CPA. Just because they may be an accountant doesn’t mean they can file taxes. Only s a certified public accountant (“CPA”) or an enrolled agent (“EA”) can file taxes. CPAs and EAs have met the education and experience requirements set forth by the IRS. General accountants have not. 

A CPA should be able to verify themselves or you can even verify them.

Which is Better, an In State CPA or Out of State CPA for Taxes?

So is an in state or out of state CPA better for taxes? It really depends on your situation. If you are a business owner or someone with a complex situation then you may be able to find a better out of state CPA or CPA virtually.

For most people, a nearby, small firm or in state CPA can get the job done and do it well. After all, they all have the same qualification.

Is a CPA Even Needed for Taxes? 

Speaking of qualifications, do you even need a CPA? CPAs are professionals when it comes to filing taxes but EAs can file taxes as well. If you have a basic tax situation then you might even want to explore the route of using online filing software.

As soon as you start having questions, then it’s time to get a real human, brains and hire a CPA. Even the best online software isn’t comparable to speaking to a real CPA about your tax situation.

Can An Out of State Accountant/CPA Do My Taxes? Conclusion

If you are exploring the option of an out of state CPA doing your taxes, give it a try. You may even find that virtually meeting with a CPA is all you need. At the end of the day, it’s allowed for CPAs to file taxes out of their home states. Find a CPA you can work with for a long time and you can have a great business relationship.

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