Before Retiring Your CPA Status, Consider Tax Preparation

A CPA considers keeping her credential as she faces retirement

With a successful career behind you and retirement ahead, you may feel ready to let go of your CPA status. But keeping your CPA credential active after retirement offers options that you wouldn’t have otherwise. 

Reasons you may want to keep your CPA status

More options in retirement

Before you officially take on the CPA-Retired or CPA-Inactive designation, remember that keeping your CPA status active keeps a host of post-retirement activities open. If you ever plan to offer accounting, auditing, tax, or consulting services again after retirement – even just occasionally – you’ll have far more options if you still have an active CPA credential.

Donna Oklok of the Accountancy Board of Ohio says that the board advises each CPA before he or she signs the affidavit to surrender their CPA status: “They can’t perform or offer to perform services in accounting, auditing, financial statements management advisory, financial advisory or consulting services. They are not going to do things like tax return preparation or provide advice on tax matters as a CPA.” 

“Upon learning this,” she says, “Many CPAs choose to keep their status active even if they do retire from their job, keeping the door open for later opportunities.”

Avoid reinstating your CPA status

By keeping your CPA status active, you can avoid the hassle of reinstating it later. Reinstatement could involve catching up on CPE or even re-taking the CPA exam. Even if you never plan to work as a CPA again, keeping your credential active allows you to pursue work and passion projects you may discover later such as helping a family member with their business or offering seasonal tax preparation help.

Reasons to become a tax preparer after retiring as a CPA

You’re already highly qualified and sought after

Along with Enrolled Agents, CPAs are among the most qualified and sought after tax preparers. Your CPA title automatically gives you full representation rights before the IRS and credibility and trust among potential clients.

The flexibility of seasonal work

Whether your career is in audit, tax, or internal accounting, you’re likely already familiar with the ebbs and flows of seasonal accounting work. Tax preparation offers the chance to work for only a few months of the year and use the rest to pursue other interests and enjoy retirement.

Set your own work schedule

“Busy season” doesn’t have to be busy in tax preparation. You’ll have the ability to take on as many or as few clients as you want, working only as much as you want to.

Almost no barrier to entry

As a CPA, you have even less barrier to entry than other new professional tax preparers, as you already possess the education and credentials to succeed. With the rise of virtual meetings and distance-friendly tax software like the TaxesToGo mobile app, you can establish a viable tax practice even without an office. Your only necessary startup cost is professional tax software.

Earn additional income

Of course, professional tax preparation offers a way to supplement your retirement income, allowing you even more financial freedom to pursue hobbies and interests.

In short, even if you’re unsure about offering professional tax preparation or other services after retirement, maintaining your CPA status will leave you free to decide later – without having to reinstate your license.