EA vs CPA Tax Professionals: Whats the Difference?

Additionally, there is a higher demand for CPAs than EAs among the general public. Working with an EA can be the best option for you if you have accounting requirements with a micro focus. When it comes to tax preparation, they can also support you in locating tax credits and deductions to reduce your tax bill. Although the variety of services the two categories of professionals provide varies, they are equally equipped to carry out comparable jobs.

Gain relevant experience

According to the people who have taken both the EA and CPA exam, the CPA is more difficult to pass. This is primarily because of the extent of studies required for each exam and the topics covered. Both the EA and the CPA credentials come with a strict code of ethics and professional standards. However, the EA license is regulated enrolled agent salary at the federal level while the CPA is at the state level. A Form 1040 return with limited credits is one that’s filed using IRS Form 1040 only (with the exception of the specific covered situations described below). If you need help with an IRS issue, such as a collection problem or an audit, then an EA might be your best bet.

• This is primarily because of the extent of studies required for each exam and the topics covered.
• Therefore, they may have a tax specialization, such as tax preparation or resolution.
• The continuing education for Enrolled agents as per IRS requirements is 72 hours every 3 years.
• They could be specifically licensed as auditors, financial planners, corporate and executive accountants and tax consultants.
• Plus, the EA designation signals a high level of expertise that will cement your status as a valuable expert on tax topics.
• The larger the company, the higher the pay for a given role, and the better defined your career path will be.
• When deciding between an EA or a CPA, you will see that both types of professionals are well-qualified.

Tax Preparer CPA vs Enrolled Agent – FAQ

• Additionally, EAs can also provide tax advice, tax return filing and more.
• Candidates seeking enrollment must complete a suitability assessment, background check, and tax compliance assessment.
• Take a look at our Enrolled Agent Salary Guide to get an idea about industry salary range.
• These courses can span a broader range of topics, including financial accounting, auditing, ethics, and even specialized areas like forensic accounting or cybersecurity.
• However, you have two years to finish all three sections and receive a passing grade as long as you schedule one within a year of the date of registration.
• Certified public accountants, or CPAs, have a more flexible and expansive repertoire than EAs.

The Enrolled Agent (EA) credential is a nationally recognized certification offered by the IRS for tax professionals. There is no specific education or work experience requirement, although candidates should have well-established tax knowledge before taking the exam. 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. EAs can assist you with a collection issue or an IRS audit and provide bookkeeping services that may be helpful to firms filing tax returns.

Enrolled Agent vs CPA

• To obtain the EA license, an individual must have either worked for the IRS for a few years or completed a tough three-part exam covering individual and corporate taxes and ethics.
• With CPA you have to contact the state boards of accountancy anytime you move to validate your license before practicing.
• They deal in all sorts of realms within the tax world, making them a great choice if your questions involve multiple topics.
• So CPAs could assist in all accounting, tax and financial services for the businesses, individuals and other organizations they may represent.
• While CPAs earn more, many tax professionals find the EA path more fulfilling due to its micro focus on tax issues and less rigorous exam cycle.
• The following is a detailed overview of the responsibilities and qualifications of an enrolled agent (EA) and additional resources for those interested in becoming one.
• In general, CPAs earn more than EAs in all career levels; however, the CPA credential requires significantly more schooling, time and up-front costs than the EA credential.

To take the enrolled agent exam, you must pay a testing fee for each exam part. The exam has three parts, and the testing fee is $206, which comes to a total of $618. To pass the exam, you’ll also need to https://www.bookstime.com/articles/absorption-costing purchase an enrolled agent course that provides study materials covering the exam content. The most popular EA course, Gleim EA Review, costs between $380 and $630, depending on your course package.

Costs and Processes of Becoming an EA and CPA

Therefore, we highly recommend candidates review the best CPA review discounts before purchasing their course as a way to keep more money in their pockets. Your choice between becoming an EA or CPA should be based on a nuanced understanding of what each role entails, from tax preparation to financial planning and business consultation. Both are highly respected roles with their own sets of challenges and rewards, tailored to meet varying individual needs and career aspirations. As of October 2021, the Bureau of Labor Statistics (BLS) recorded the national median salary for CPAs in the U.S. as $73,560. Jobs paying $58,500 or less are in the 25th percentile range, while jobs paying more than $83,000 are in 75th percentile.

Jobs Similar to Accounting

Staff accountants handle various financial duties such as ensuring financial statements are prepared correctly and that companies follow the laws and regulations for financial practices. They handle balancing the budget and must use budgeting and auditing software programs. Office managers oversee several ongoing projects at once and work with staff to ensure that operations run smoothly. They must stay up to date on a wide variety of projects and report directly to higher-level executives.

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Take a look at our Enrolled Agent Salary Guide to get an idea about industry salary range. On top of that, 55% of master’s degree-holders have debt from both their undergraduate and graduate studies, owing an average total of over $69,000. Comparing IRS Enrolled Agent vs CPA cost of a license, CPA is much higher. If all the costs are taken into account for CPA vs EA, for CPA it comes to around $3,000 while for EA it’s about $1,300. Another factor to take into account for EA vs CPA is the cost of taking the exam. That of the CPA is higher than the EA simply because it has more parts.

I’ve been told it’s rarely an issue to get a reciprocal license other than you might have to take a different ethics exam. If you think about what is an EA vs CPA, one of the main points of difference is the cost to get the license and set up practice. An EA has first-hand knowledge of working with the IRS and this can be a huge plus point. On the other hand, for the CPA exam, four different subfields of accountancy have to be covered and hence more study materials have to be absorbed by the candidates.

Tax Preparer Vs. CPA