The job of an enrolled agent is not as well-known as that of a CPA. However, EAs are as good (if not better) at handling income tax matters. If you would like to specialize in income tax and desire the flexibility of working at home with your own clients, I encourage you to explore the EA path further. As you may recall, the EA exam has one fewer part (three total) than the CPA Exam (four). Therefore, most candidates only need a few months to study for and pass the EA exam.
Enrolled Agent vs. CPA: Which Will You Choose?
The EA exam focuses heavily on the US tax code, which prepares you for the Tax and Regulation portion of the CPA exam if you choose to go this route. EAs and CPAs are highly qualified professionals with expertise in financial matters. However, their focus and areas of specialization differ, making them suitable for different needs.
However, if you currently meet the EA requirements, it may benefit you to continue on this path before working on your CPA license. Some professionals also specialize in certain areas such as real estate, investments, or international taxation. You might also run across an EA or CPA using a per-form pricing model, which is a type of flat-fee approach.
You will know that you’re getting value for money as EAs specialize in taxes. CPA candidates must also meet various state education and experience requirements, typically 150 hours of education and one to two years of supervised experience. CPAs usually have a bachelor’s degree in accounting or a related field, complete a specified number of accounting and business courses, and pass the Uniform CPA Exam. There are four sections of the Uniform CPA Exam, including auditing and attestation, financial accounting and reporting, regulation, and business environment and concepts. Above all, it’s important to remember that while both professionals can provide a host of taxation services, CPAs generally offer a much wider scope of financial services.
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CPAs cover a wide range of accounting services, including tax, auditing, financial reporting, and business tax consulting. They may specialize in specific areas like business valuation or forensic accounting. Additionally, EAs can provide tax planning and tax advice, guiding clients through tax strategies and helping them plan for future tax obligations. Choosing an EA for your tax preparation and representation needs can be a wise decision that helps you easily achieve your financial goals.
Enrolled Agent vs CPA
CPAs, or Certified Public Accountants, are licensed individuals with the statutory privilege to sign an audit report. They can prepare financial accounts, provide audit services, and offer tax expertise. Typically, their clients are businesses that need both accounting and tax services. EAs, or enrolled agents, are tax preparers authorized to represent taxpayers before the IRS.
Obtaining both an EA and CPA designation can be great for your career trajectory, but both require significant study hours and exam prep. Becoming a licensed CPA requires passing the 4-part Uniform CPA Examination and meeting other state-specific requirements. This means that the rules and regulations around being a CPA differ from state to state, so be sure to check the laws and regulations in your area. With a license to work on any area of accounting, you’ll have the flexibility to work anywhere that needs strategic financial management. For those with greater professional ambitions, being a CPA is the jumping block to leadership and executive roles.
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- An EA is the highest credential awarded by the IRS for tax professionals.
- Enrolled agent status is the highest certification given out by the IRS.
- On the other hand, as a CPA, you’ll have a broader outlook on the various aspects of the accounting and finance field.
- CPAs have a broader scope of practice that extends to auditing, financial accounting, and business consulting.
Both CPAs and EAs have comprehensive knowledge of the United States tax codes and can use their knowledge to represent their clients in audits, appeals and other matters with the IRS. They’re also a great option if you need tax preparation and planning advice for an individual or business. You may be able to find what you’re looking for with either type of professional, as both types of professionals enrolled agent vs cpa are equally qualified to perform similar tasks. However, there can be differences in the range of services offered. CPAs can provide a much wider scope of tax services than an EA can. What’s more, the general population demand is greater for CPAs than EAs.
Many aspiring EAs pursue formal education or specialized training programs to prepare for this challenging exam. After passing the SEE, you must maintain 72 hours of continuing education (CE) credit every three years. Tax professionals, like doctors and attorneys, have many specialized acronyms and designations. Two of the most recognized in the finance world are enrolled agents (EAs) and certified public accountants (CPAs).
CPAs also tend to be in higher demand than EAs, but that’s probably only because CPA is a better-known license than EA. CPAs can also provide money management and financial planning services to clients. Whether you’re looking to establish a financial route, open your own business, or build savings for a new home, CPAs are a fantastic option when you need a broad scope of financial expertise. CPAs tend to do most of their work for large and small public accounting firms. They may work as auditors, financial planners, corporate and executive accountants, and/or tax consultants.
Bookkeeping vs. accounting: Differences and similarities
There are no preconditions to appear for the exam and you can do so as soon as you obtain a Personal Tax Identification Number (PTIN), even if you’re still in college. Now you know the differences between an EA and a CPA, you can decide which is best for your business. Do your research, including reading reviews and asking people you trust for referrals. EAs do not need a college degree, but many come from an accounting or finance background. For a more detailed look at the EA versus CPA Exams and a direct comparison of CMA vs CPA vs EA exams, check out our post on the difficulty of the EA exam. This chart presents the totals for the Enrolled Agent exam and the CPA Exam costs.
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- The exam has three parts, and the testing fee is $267, which comes to a total of $801.
- All four sections of the exam must be passed within an 18-month period in order to earn a CPA license.
- The requirements for CPA licensing are demanding, and the exact rules vary from state to state.
They’re specifically licensed to prepare tax returns, provide taxpayers, and represent taxpayers in collections, audits, and appeals. While an enrolled agent is a highly knowledgeable tax professional, they are not licensed to provide services outside the realm of taxation. A CPA can provide auditing, financial planning, and many other services in addition to helping with tax issues.
Being licensed at the state level, though means that the scope of work is limited to those jurisdictions. An Enrolled Agent and a CPA are both tax experts and the work done is somewhat similar but there are several areas of differences too. When you have a complex tax situation that requires expertise beyond taxation, choosing an EA may result in missed opportunities or inaccurate financial reporting. Conversely, if you have a simple tax situation and hire a CPA, you may pay for services you don’t need.
