CPA vs EA Enrolled Agent Top 7 Differences, Infographics

All four sections of the exam must be passed within an 18-month period in order to earn a CPA license. Once these steps are successfully completed, the CPA is ready to begin work in his or her financial field of choice. To maintain an active license, CPAs must complete certain levels of continued education. Comparatively, the EA exam questions are more detailed but contain less variety and complexity.

What can a CPA do that an EA can’t?

Unlike CPAs, EAs can’t certify financial statements and provide public accounting outside of tax, which limits their ability to work in a broader capacity. 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. As mentioned above, because of the flexibility of the CPA designation, these professionals can be involved in many different types of financial work. Enrolled Agents are generally free to provide these tax services to any tax-paying individuals or businesses they wish to represent.

EA Exam

Understanding the key differences between an Enrolled Agent vs CPA is crucial for making an informed decision. This article will break down the roles, qualifications, and areas of expertise of EAs and CPAs to help you choose the right tax professional for your needs. EAs work on tax matters only, so they can specialize in certain areas such as tax preparation or tax resolution. Therefore, CPAs who specialize in tax should consider obtaining the EA so they can display their tax expertise. If you pursue the enrolled agent designation via the EA exam, you don’t have to meet an experience requirement.

Enrolled Agent vs CPA: Which One Do I Need?

Whether it comes to business or individual accounting and tax planning, sometimes finding the right type of help can become another problem altogether. On the other hand, Certified Public Accountants work for businesses that require accounting and tax services. Typically, their responsibilities include Partnership Accounting preparing financial accounts, providing audit services, and offering tax expertise. And according to the above definition, CPAs also have unlimited representation rights before the IRS.

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This state-level regulation requires CPAs to adhere to specific guidelines and standards set by their respective states, adding a layer of complexity to their practice. CPAs engage in a multitude of roles that cater to diverse financial needs. They serve as auditors, ensuring that audited financial statements are accurate and comply with regulations. As financial planners, CPAs help clients develop strategies for managing their finances, optimizing tax liabilities, and planning for the future.

She oversees the financial aspect of New Sight in Hong Kong, including accounting, taxation, financial management, and compliance. Finally, if you’re wondering how the IRS views enrolled agents and CPAs, the answer is that the IRS puts them on the same level. You can also search the IRS’s online directory of tax preparer vs cpa tax return preparers to find both EAs and CPAs who hold professional credentials recognized by the tax agency. However, that fee will likely be based on the amount of time the tax preparer expects to spend on your return.

• But they’re not the only ones who can help people make sense of tax issues and concerns.
• Both EAs and CPAs provide valuable services, but understanding your unique requirements is key to making the best choice.
• As mentioned above, because of the flexibility of the CPA designation, these professionals can be involved in many different types of financial work.
• CPAs also tend to be in higher demand than EAs, but that’s probably only because CPA is a better-known license than EA.

This variety of employment sectors highlights the dynamic nature of their professions and the numerous pathways available. According to Payscale.com, enrolled agents typically make between $33K to $80K a year, while CPAs make between $49K to $115K per year. Enrolled agents also have the opportunity to earn extra money during tax season. I have a reader who actually made more during those few months than he usually earns for the year in retail. The CPA Exam has testing all year long, but it has a shorter period to pass all four exams. You must pass all four parts of the CPA Exam within a rolling 18-month period that begins as soon as you pass your first exam section.

Ultimately, even though both EAs and CPAs are extremely skilled tax experts, their training requirements, scope of practice, regulatory oversight, and career prospects differ. Therefore, students should develop a thorough understanding of each of these differences to make informed decisions about EA vs. CPA tax professionals. When preparing for the Enrolled Agent exam, candidates must delve into the intricate details of tax laws and regulations.

Enrolled Agents have the unique distinction of being the only federally-authorized tax practitioners who can represent taxpayers before the IRS without being an attorney or CPA. This authority allows EAs to assist clients in tax audits, collections, and appeals, providing comprehensive IRS representation. The complexity of your tax needs can greatly influence your choice between an EA and a CPA. While EAs are perfect for handling specific tax matters, CPAs bring a broader range of online bookkeeping skills that can be beneficial for more complex financial situations. Understanding these differences helps in making an informed decision about which professional to hire.