PayUYou’ll have to pay this fee the first time you apply to your state board, and it ranges from $30 to $200, depending on the state board. There’s also a registration fee for each section of the exam each time you take it. This fee typically runs from $30 to $150, and if you have to retake an exam section, you may have to pay it each time. The CPA Exam used to have a stricter timeline than the EA, with scheduling “windows” throughout the year.
Enrolled Agent vs CPA: How Do You Choose the Right Tax Professional for You?
CPAs are qualified to provide opinions on financial statements, a service often required for public companies or for securing certain types of financing. This broad training allows them to address a wide array of financial challenges. The AICPA and NASBA jointly administer a four-part exam on auditing, business, financial accounting, and regulation that CPAs must pass. CPAs must also complete at least 40 hours of continuing education per year, with four hours covering ethics.
- Both designations offer rewarding career paths with distinct focuses and opportunities.
- While EAs have unlimited representation rights due to their federal licensure, CPAs also possess broad representation privileges before the IRS.
- To earn their credential, they must pass the Special Enrollment Examination (SEE)—a three-part, rigorous examination on individual and business return tax laws, IRS procedures, and regulations.
- Understanding what each of them does will enable you to determine who’s best for your tax needs.
Additionally, the questions on the REG CPA Exam section are harder than those on the EA exam. The REG questions don’t go into as much detail about tax, but they are more varied and complicated, partially because the CPA Exam contains multiple-choice questions and task-based simulations. The EA questions are easier, so most candidates only need a few months to pass the EA exam as opposed to the months typically needed to pass the CPA Exam. In this case, the benefit of the EA exam is that the sooner you can get licensed, the sooner you and your clients can enjoy your improved status with the IRS.
Should I hire an EA or CPA near me?
Once EAs have passed their qualifying exam, the federal government recognizes them as tax specialists. Typical EA responsibilities include representing business or individual clients in tax audits, tax appeals and tax collections. Additionally, EAs can also provide tax advice, tax return filing and more. LUCA Bookkeeping and Taxes is a full-service accounting firm based in the Kansas City Area.
Working with an EA
Enrolled agents, or EAs, are tax preparers the IRS has authorized to represent taxpayers. Enrolled agent clients include individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. NAEA (the National Association of Enrolled Agents) states that they can represent, prepare tax returns, and do tax consulting for just about anyone. In plain language, think of an EA as a tax specialist who works with the precision of a surgeon—carefully navigating tax laws, maximizing deductions, and resolving IRS issues. According to salary.com, enrolled agent salaries typically range between $44,657 and $62,255 a year. In general, CPAs earn more than EAs, and CPAs also benefit from increased earning potential as time goes on.
Additionally, EAs may be more cost-effective for basic tax filing, while CPAs’ comprehensive financial services might command higher fees. A CPA is a licensed accounting professional who works in both tax and outside of tax services. CPAs provide tax advice, tax planning, and bookkeeping services but are also involved in broader financial areas like auditing, financial planning, and working with public accounting firms. Enrolled Agents (EAs) are tax professionals the Internal Revenue Service (IRS) licenses to represent taxpayers in various tax-related matters.
Their specialized focus on taxation enables them to offer competitive pricing for tax preparation, planning, and representation services. EAs ensure clients’ tax compliance by meticulously preparing accurate tax returns and adhering to current tax laws and regulations. Their focus on tax-related matters ensures thorough compliance, reducing the risk of errors and potential penalties. EAs pass a comprehensive three-part Special Enrollment Examination (SEE) covering individual and business tax matters, ethics, and representation.
Accessibility and Response Time:
But if you’re in need of basic tax preparation, hiring an Enrolled Agent, who has earned the highest tax credential offered by the IRS, could be the way to go. An EA can handle any tax situation you throw their way, and would also prove to be an invaluable resource in the event of an audit. An enrolled agent (EA) is a tax professional licensed by the IRS to represent taxpayers regarding audits, collections, and appeals. Unlike the majority of tax preparers, EAs have unlimited representation rights before the IRS on behalf of taxpayers with personal and business tax returns. For broader financial and accounting requirements, a Certified Public Accountant is generally the more suitable choice.
You’ll need to decide for yourself which is a better fit for your skills and lifestyle. 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. Although these courses are expensive, savvy candidates can find discounts and promotional codes to reduce the costs. 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.
On the other hand, if you are interested in accounting practices that have nothing to do with taxes, such as auditing, then the CPA option may be best. Each of the exam’s four sections costs about $200, depending on the state. There is also a continuing education component, but the exact number of credit hours varies by state.
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. CPAs are state-licensed professionals who provide accounting, tax, financial planning, and consulting services to individuals, businesses, and other organizations.
- Overall, you must pass each exam part within a rolling two-year window.
- Two of the most common options are Enrolled Agents (EAs) and Certified Public Accountants (CPAs), who offer tax expertise, but hold distinct strengths and cater to different needs.
- They represent taxpayers before the Internal Revenue Service (IRS) in all tax matters, including audits, appeals, and collection issues.
- Aspiring CPAs generally need a bachelor’s degree, often requiring 150 semester hours of college coursework.
EA vs. CPA: How they compare
CPAs can also help clients with strategic planning, budgeting, forecasting, decision-making, and problem-solving. CPAs typically do most of their work for public accounting firms of all sizes. They could be specifically licensed as auditors, financial planners, corporate and executive accountants and tax consultants. So, CPAs could assist in all accounting, tax and financial services for the businesses, individuals and other organizations they may represent. Both certifications are viewed with equal standing in the eyes of the IRS. Both CPAs and EAs have unlimited practice rights, which means there are no restrictions on the types of tax issues they can tackle.
In other words, a CPA is the go-to if you’re looking for a broad scope of expertise. An enrolled agent, or EA, is a tax professional who focuses on managing tax arrangements for business or private entities. EAs boast a wide range of knowledge in tax-related subjects such as income, estate, gift, payroll, levies, returns, inheritance, non-profit and retirement taxes.
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. The distinctions between Enrolled Agents and Certified Public Accountants are evident in their scope of practice and licensing authority. Enrolled Agents specialize in tax law and IRS procedures, focusing on tax preparation, planning, and representation before the IRS.
Otherwise, you can take the exam enrolled agent vs cpa parts at any other time and in any order you like. We will happily offer you a free, no-obligation initial phone/zoom consultation & basic tax problem investigation to determine how we can best serve you. Providing strategic tax planning advice to optimize financial decisions and minimize tax liabilities.
