what is an enrolled agent vs cpa

A person may be an EA and a CPA; however, one appointment does not necessarily qualify the person to serve as the other. When it comes to the type of services offered, both EAs and CPAs are tax professionals capable of assisting with tax preparation, tax appeals, and dealing with federal and state tax agencies. Additionally, both of these designations can work with individuals and businesses, although it is more common for CPAs to work primarily with businesses.

  • As you weigh the two options, consider differences in salary, job function and career path.
  • CPAs can also provide money management and financial planning services to clients.
  • If you can get clear about the nature and extent of your own needs, you’ll be much better placed to make the right decision for you or your business.
  • Enrolled agents’ knowledge in the continually changing field of taxation enables them to effectively represent taxpayers at all administrative levels within the IRS.

Information about enrolled agents

The EA questions are more in-depth but less varied and complicated, so they are easier. Because the CPA Exam is so expensive to take, candidates usually invest quite a bit more in their review courses to better pass the exam on the first attempt. tax preparer vs cpa CPA candidates usually choose a course like Becker CPA, Gleim CPA, Wiley CPAexcel, Roger CPA, Yaeger CPA, or Surgent CPA. Although these courses are expensive, savvy candidates can find discounts and promotional codes to reduce the costs.

EA vs CPA: Comparing the Requirements, Salaries, and Careers of Enrolled Agents and CPAs

  • Enrolled Agents are generally free to provide these tax services to any tax-paying individuals or businesses they wish to represent.
  • Former IRS employees with at least 5 years of experience as field tax professionals.
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  • A CPA needs to have a 4-year degree from a qualified university, then pass the CPA Exam in order to earn the CPA credential.
  • In Massachussetts, for example, CPAs need 80 hours of continuing education every two years.
  • This combination of skills is attractive to small businesses needing both audit and tax services, preferably coming from the same team.

Top earners (90th percentile) are estimated to make $107,500 annually. According to ZipRecruiter.com, the national average salary for an Enrolled Agent as of February 2023 is $60,725. Jobs paying $47,500 or less are in the 25th or less percentile range, while jobs paying more than $70,500 are in the 75th or more percentile range. If you own a small business, hiring a CPA with a bookkeeping and reporting background can help you get organized and on track for the next year. “When you have a couple million dollars in business, some of the accounting can get complicated. We make sure everything is in the right bucket,” says Irene Wachsler, a CPA with Tobolsky & Wachsler CPAs in Massachussetts.

Enrolled agents: Frequently asked questions

In general, the EA’s job is to help their clients with a variety of tax matters, from tax preparation, to representation during hearings or conferences, to helping them through audits. EAs can be seen in an office, in front of the IRS, or sitting down with https://www.bookstime.com/ clients. They work in accounting firms of all types and sizes, with many EAs starting their own businesses. Our enrolled agents are tax professionals who have demonstrated technical competence in the field of taxation.They are authorized by the U.S.

  • There is no specific education or work experience requirement, although candidates should have well-established tax knowledge before taking the exam.
  • But how does the enrolled agent (EA) role stack up against being a CPA?
  • This privilege allows them to represent taxpayers in matters relating to the Internal Revenue Service (IRS), such as tax collections, audits, or appeals.
  • Once EAs have passed their qualifying exam, the federal government recognizes them as tax specialists.

A certified public accountant is a licensed accounting professional who meets the education, experience, and examination requirements set by the state’s Board of Accountancy. CPAs are qualified to offer a range of accounting, tax, and business services to individuals, businesses, and organizations. CPAs have a broader knowledge base in all facets of accounting while EAs only focus on tax. Not only is this reflected in their background, even their credentials limit their scope. CPAs are granted unlimited representation rights to assist clients in tax-related matters as well as with audits, risk assessment, business valuation and financial planning. However, CPAs are only allowed to practice in the state where their current license is held except for states that accept CPA mobility for limited practice.

What is a CPA (Certified Public Accountant)?

A CPA’s bread and butter tends to be performing tax, accounting and financial services to businesses. Not a ll specialize in taxation, and some specialize in more than one service. Most states/jurisdictions require at least a bachelor’s degree, two years public accounting experience and a passing score on the CPA exam to obtain a license. The IRS does not require attorneys and certified public accountants to complete continuing education, but some state licensing offices have added additional requirements. In Massachussetts, for example, CPAs need 80 hours of continuing education every two years.

what is an enrolled agent vs cpa

Most people consider Part 1 (Individuals) and Part 3 (Representation, Practices, and Procedures) to be the easiest. In fact, some experienced tax professionals can pass these parts without much studying. Think about the kind of tax services you need, like tax preparation, tax planning, or IRS representation. EAs can’t perform audits, but they’re highly qualified to handle tax-related issues and are a popular choice among small business owners and self-employed individuals. CPAs have a well-earned reputation for being experts in accounting, compliance and finance management.

what is an enrolled agent vs cpa

This means EAs can represent any taxpayer, whether they prepared their income tax return or not. They can also represent any tax matter, as well as appeal to any office of the IRS. The hiring of tax examiners is projected to decline 4% from 2020 to 2030 as the growth of the tax examiner industry is closely tied to changes in federal, state, and local government budgets. The growth of the enrolled agent industry depends on industry rule changes and the demand for tax services.

What is a Certified Public Accountant (CPA)?

what is an enrolled agent vs cpa

If you fail an EA exam part, you can take it three more times (a total of four) during the testing window. The best way to pass the EA exam in a timely manner is to use an EA review course and stick to a study schedule. This study schedule should include taking all three parts in two years. When you’re looking to hire a tax professional, you want someone knowledgeable — someone you can trust to get the job done and keep your personal information secure.

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