What a small business CPA does
A small business CPA prepares business returns such as Schedule C for sole proprietors, Form 1065 for partnerships and multi-member LLCs, and Form 1120-S for S corporations, along with the owners’ personal returns.
The planning side often matters more: choosing an entity and deciding whether to elect S corp status, setting reasonable compensation, sizing quarterly estimated payments, and handling filings in more than one state.
A CPA can also represent you before the IRS and state agencies, and usually coordinates with your bookkeeper and payroll provider so the numbers on the return match the books.
How to verify a small business CPA’s license
- CPAverify. Search the CPA and the firm by name on NASBA’s CPAverify. It shows license status, type, dates, the issuing state and reported disciplinary actions, using official state board data.
- State board of accountancy. If the state is not on CPAverify, use the board listed in NASBA’s state board directory.
- IRS preparer directory. The IRS Directory of Federal Tax Return Preparers shows whether a preparer holds a CPA, EA or attorney credential. See also the IRS page on choosing a tax professional.
Questions to ask a small business CPA before hiring
- What share of your clients are businesses like mine in entity type, size and industry?
- Who prepares my return, who reviews it, and does a CPA sign it?
- Do you plan with me during the year or only file? When do we meet?
- How do you handle IRS and state notices, and will you represent me?
- Should I be an LLC, an S corp or something else, and what would change that answer?
- What do you need from me each month or quarter, and through what system?
- How are fees set, and what is included in the engagement letter?
Free checklist
Small Business CPA Interview Questions + Document Checklist
Red flags
- No license you can find on CPAverify or the state board.
- Will not sign the return as preparer, or will not put scope and fees in an engagement letter.
- A fee tied to the size of your refund. The IRS tells taxpayers to avoid this.
- Promises specific tax savings before seeing your books.
- Recommends an S corp election without discussing payroll, reasonable compensation and state taxes.
Why clients choose Your Virtual CPA
- Licensed CPA firm serving small businesses nationwide, virtually.
- Business returns and planning: tax preparation, tax planning, entity choice and multi-state filings.
- Books and returns that match: bookkeeping and tax under one CPA firm when you want it.
- Transparent fees quoted upfront, in writing.
- Free initial consultation before you decide.
How it works with us
Best for: sole proprietors, LLCs, S corps and partnerships that want a CPA for planning, not just filing.
- Free initial consultation. Tell us about your business, entity and what worries you.
- Fees quoted upfront, in writing. Scope and fees in an engagement letter before work starts.
- Review. We review prior returns, books and your entity setup.
- Plan and file. Estimates, entity decisions and your returns.
- Ongoing. Check-ins during the year and help with any notices.
DIY software vs seasonal tax preparer vs year-round small business CPA
| DIY tax software | Seasonal tax preparer | Year-round small business CPA | |
|---|---|---|---|
| Entity advice (LLC, S corp, partnership) | No | Sometimes | Yes |
| S corp reasonable compensation | You decide | Sometimes | Yes, with documentation |
| Tax planning during the year | No | Rarely | Yes |
| IRS representation | No | Limited or none unless credentialed | Unlimited |
| Multi-state filings | You figure out where to file | Varies | Yes |
| Accountability | You sign alone | Signs as paid preparer | Signs as a licensed CPA |
Expert CPAs. Personal attention.
Looking for a CPA for your small business? Request a free initial consultation and talk to a CPA about your entity, taxes and books.
Frequently asked questions
Verify the license on CPAverify or your state board, then look for a CPA who works with businesses of your entity type, size and industry. Ask who prepares and reviews your return, whether they plan during the year, and whether they can represent you before the IRS. Get scope and fees in an engagement letter.
Not by law, but most LLC owners benefit once there is real profit, payroll, more than one owner or sales in several states. A CPA can confirm how the LLC is taxed, whether an S corp election makes sense, and what you owe in estimated taxes, then prepare the return.
Most S corp owners use one. An S corp files Form 1120-S, issues K-1s, and must pay owner-employees reasonable compensation through payroll. Getting reasonable pay, distributions and basis right takes judgment that DIY software does not provide.
Bring the last two or three years of business and personal returns, current-year financial statements or bookkeeping access, formation documents and any S corp election letter, payroll reports, and any IRS or state notices. Our checklist on this page lists the rest.
Yes. CPAs have unlimited rights to represent taxpayers before the IRS under Circular 230. With your signed Form 2848, a CPA can talk to the IRS for you, respond to notices and handle audits.
It can be. What matters is the license, small business experience and responsiveness. Much of the work runs through shared files, e-signatures and video calls either way. Your Virtual CPA, a licensed CPA firm, works with small businesses nationwide.
It depends on your entity, number of states, payroll, how clean the books are and whether you want planning or just filing. Your Virtual CPA quotes transparent fees upfront, in writing, after a free initial consultation.
Sources
- NASBA CPAverify
- IRS: Choosing a tax professional
- Treasury Circular 230 (31 CFR Part 10)
- IRS: S corporations
- IRS Publication 334: Tax Guide for Small Business
General information as of October 20, 2026. Tax rules change; talk to a CPA about your situation.