EA vs CPA Which Should I Hire?

The two finance professionals have many similarities and differences that we will explore in the following sections. Before analyzing these two financial professionals, let’s start with some brief definitions. Making the best career choice in the increasingly complex world of finances is complicated. Taxfyle connects you to a licensed CPA or EA who can take time-consuming bookkeeping work off your hands. Here’s a $30 coupon to access to a licensed CPA or EA who can do all the work for you. Set your business up for success with our free small business tax calculator.

What are the similarities of CPA vs enrolled agents?

CPAs and EAs need to renew their practicing licenses after a specified amount of time. CPAs and EA professional career paths often cross, and there is considerable overlap in their duties. The salary range for the two professions largely depends on the location, industry, and years of experience. Typically for CPAs, one to two years of supervised mentoring by a practicing CPA is enough to get a CPA license. Each section of the EA exam contains 100 multiple choices tested over 3.5 what does ea stand for in accounting hours.

Additionally, you will petition the IRS regarding your client’s rights, privileges, and liabilities as per the US tax code. You will liaise with the IRS to create practical tax plans, estimation, payments, and settlements on behalf of taxpayers. To practice as a CPA, you need to satisfy some experience requirements. The CPA licensing exam is a four-part exam offered by a state’s board of accountancy.

How Do You Register for the EA License Exam?

Although not all CPAs prepare taxes, this does not diminish the expertise of a tax specialist who is a CPA. There is a misconception that all CPAs do is “account” for the numbers that go into a return but that is not true. CPAs that specialize in tax offer services such as advance tax planning, trust and estate planning, and financial planning.

Starting in 2013, the IRS will require tax preparers to pass a tax exam and obtain 15 hours of continuing education every year. Those that specialize in tax preparation can typically help you with tax and financial planning, accounting needs, and most other financial tasks that you might have, too. The EA credential requires passing a three-part exam administered by the IRS before applying for licensure.

Simply put, EAs can do all the things that CPAs can do when it comes to tax. Estimated Annual, also known as EA, is a crucial concept in accounting that helps businesses determine their annual income or revenues. It is an accounting term used to estimate a company’s expected annual profits or losses, based on past performance and current economic conditions. The EA questions are more in-depth but less varied and complicated, so they are easier.

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The exam covers topics such as Individual and Business Tax Returns, Representation, Ethics, and Federal Tax Law. Enrolled agents must also meet continuing education requirements to maintain their status. EAs are not licensed by the state and do not have to meet state-specific education or experience requirements. However, they must meet the IRS’s requirements for enrolling as an EA and pass a background check.

Period of heavy reliance on credentials is nearing end, Mike Rowe says

They’re qualified to provide a wide range of accounting services, like financial planning, audits, and business consulting. They’re often the go-to for individuals and businesses with more complex financial needs. People who don’t have the resources to pursue a taxation attorney often hire EAs instead for civil resolution cases, according to David Miles, an enrolled agent with 20/20 Tax Resolutionin Broomfield, Co.

• The primary difference between an EA and CPA is that EAs specialize in taxation, and CPAs can specialize in taxation and typically have a broader knowledge of accounting and taxation.
• The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations.
• Enrolled agents are licensed by the IRS and are authorized to represent taxpayers before the agency, including in matters related to audits, collections, and appeals.
• Your renewal date depends on the final digit of your Social Security number.

Candidates are required to pass a series of exams, known as the IRS Special Enrollment Examination, before they are awarded with the EA credential. To maintain status with the IRS, EAs must attend continuing education classes throughout the year covering federal tax law and ethics. There is a code of conduct outlined in Circular 230 that all EAs must adhere to in their practice. Enrolled Agents specialize in taxation but may choose to specialize in a niche group of taxpayers. Once certified, EAs are federally licensed, allowing them to practice in any state.

And because tax attorney fees can often climb well into the four figures, both CPAs and EAs are also an affordable alternative for those who need help figuring out tax obligations. Be sure that if you choose to consult with either type of professional you have a solid handle on your finances and measure your expectations. A 2024 National Association of Enrolled Agents (NAEA) analysis noted favorable labor market demand for EAs. Fewer CPAs are emerging to fill vacancies, and employers are increasingly turning to EAs to address ongoing demand for taxation expertise.

• We strive to provide correct information using strict editorial processes, article editing and fact checking for all of the information found on our website.
• Each section of the EA exam contains 100 multiple choices tested over 3.5 hours.
• There is a code of conduct outlined in Circular 230 that all EAs must adhere to in their practice.
• This means an EA is unrestricted when it comes to which clients they can represent, what types of tax matters they can engage, and which IRS offices they can represent clients before.
• Depending on your tax situation, you may want to work with an Enrolled Agent or a Certified Public Accountant.

This tax season, make the hardest part of filing your tax return be logging in to an app. 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. EAs stay in tax and primarily deal with collections, appeals, bookkeeping and tax prep for individuals.

Most people are familiar with the CPA credentials, but what about an EA? The acronym CPA stands for Certified Public Accountant while EA stands for Enrolled Agent. Enrolled Agents specialize in taxation, and Certified Public Accountants can specialize in taxation or several other concentrations, like audits, forensic accounting and more. Likewise, an EA that specializes in tax may offer these same services.

And with TurboTax Live Full Service, you can enjoy tailored assistance from a tax expert near you who’s well suited to handle your specific needs. Although the requirements differ by state, CPAs generally need 40 hours of CPE per year. The National Association of State Board of Accountancy (NASBA) estimates that there are 665,612 actively licensed CPAs as of August 24, 2022. Additionally, if you have broader accounting needs — for instance, your bank requires a reviewed financial statement to comply with loan covenants, A CPA may be your better choice. Many EAs are also members of the National Association of Enrolled Agents, which has even higher standards for continuing education, as well as its own Code of Ethics. To become an EA, candidates must pass a three-part test, apply to the IRS, and pass a background check.

It tests your comprehensive knowledge of the federal U.S. tax code, covering individual and business taxation, along with professional procedures and practices. 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.

According to the IRS, Enrolled Agent (EA) status is the highest credential the IRS awards. EAs have unlimited practice rights like attorneys and certified public accountants (CPAs). This means an EA is unrestricted when it comes to which clients they can represent, what types of tax matters they can engage, and which IRS offices they can represent clients before. Certified public accountants are licensed by the state and are qualified to perform a wide range of accounting, tax, and financial tasks. This may include preparing and reviewing financial statements, performing audits, providing tax advice, and managing financial operations.