However, if your practice is focused on tax and you want to be able to have tax clients from anywhere in the US, the EA option is a very effective option that is also very economical. All tax professionals are not created equal—and knowing the differences could be an advantage in managing your tax liability. Registered tax return preparers have even fewer requirements and need only pass a minimal competency test.
User reviews of professionals are based solely on objective criteria. The CPA is an accounting professional who is certified within stringent standards after at least three years of a college education. A CPA licensee must also have taken a state Enrolled Agent Vs Cpa accountants exam that lasts 14 hours, and an additional 40 hours of annual professional training for the maintenance of the license. In many states, anyone can hang a sign that says “tax preparer” with no experience or education required.
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There is also a continuing education component, but the exact number of credit hours vary by state. Certified Public Accountants and Enrolled Agents are both required to take continuing education classes. Lastly, both can represent a taxpayer before the IRS with letter, audits, offers and compromises, etc. When business owners think about services CPAs can provide, preparing tax returns may be on the top of their lists. There are a number of other services CPAs offer that are relevant and can be very helpful. Enrolled agents have advanced knowledge of tax issues, which makes them an excellent resource for tax advisory and filing needs. Much like CPAs, enrolled agents are also subject to ongoing educational requirements.
- CPAs provide more financial services than enrolled agents, like reviewed, audited financial statements if needed.
- Education for public accounting is vital to mention when answering the question, what is a PA?
- Be sure that if you choose to consult with either type of professional that you have a solid handle on your finances and measure your expectations.
- While not necessarily the right move for everyone, closing or opening a business before year end has some advantages.
- It really all boils down to what your career aspirations are.
The following article explains the differences between two of the most commonly confused job titles; Enrolled Agent and CPA. Enrolled Agent vs CPA for Business Tax Preparation As you know, running your own business is not a simple or straightforward process. It requires a whole lot of hard work, motivation, dedication, and sacrifice. They must also pass the four-part Uniform Certified Public Accountant Examination. Requirements can vary from state to state, but typically CPAs must have completed studies in accounting at university or college. Should I hire an Enrolled Agent vs CPA In this next section we’re going to be taking a look at how the two are similar to each other.
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There typically is a registration fee and separate fees for each section of the exam. (Re-takes require additional fees.) On top of that will be the cost of the license itself, which averages around $150. A CPA’s bread and butter is performing tax, accounting, and financial services to businesses. 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.
The CPA exam is four 4-hour tests that cover Financial Accounting and Reporting , Auditing and Attestation , Business Environment and Concepts , and Regulation . There are pros and cons attached to each type of certification. Both EA and CPA certifications can enhance any accountant’s career, but it’s important to look at the differences between them to properly compare. If you are deciding between becoming an enrolled agent or a CPA, you should weigh the pros and cons for each job. Once you have passed the EA exam, you are federally recognized as a tax specialist.
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EA certification appropriate fee structure is given in the below table. The duration of each exam is 4 hours with Multiple Choice Questions and Task-Based Simulations . Along with MCQs and TBS, the BEC section consists of written communication tasks. You know both these certifications are great options, but confused about choosing the best one? This article helps you to give the complete details and differences of EA and CPA certifications. Enrolled agents also focus on preparing taxes and many specialize in tax resolution.
What is an Enrolled Agent (EA)?
An enrolled agent is a tax professional who is given permission to represent taxpayers before the Internal Revenue Service.
According to ZipRecruiter.com, enrolled agent salaries typically range between $43,300 and $65,600 a year. A CPA salary is usually between $52,800 and $83,800 per year.
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They are fluent in the special tax rules surrounding startups, various revenue recognition methodologies, and asset acquisitions, which makes them a key resource for business owners. Because the CPA Exam is so expensive to take, candidates usually invest quite a bit more in their review courses so that they are better able to pass the exam on the first attempt. 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. However, comparing the taxation section of REG to that of the EA exam reveals quite a lot of overlap.
- Well, there isn’t a straight answer for this one because of all the different factors.
- The exam is the same no matter which state it’s taken in, but every state has its own education and experience requirements.
- Along with our staff of talented bookkeepers and CFO advisors, we have everything you need to help your organization grow.
- A highly-touted tax credit in the recently-passed Inflation Reduction Act is meant to incentivize Americans to purchase electric vehicles or other clean burning fuel vehicles.
- The bottom line, however, is that practically speaking YOU CAN’T GET IT.
- Therefore, they may have a tax specialization, such as tax preparation or tax resolution.
- 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.
The Special Enrollment Examination exam consists of three parts with 100 Multiple Choice Questions in each part. On the other hand, the CPA Exam has four parts and much broader content. The section https://www.wave-accounting.net/ equivalent to the EA exam is Regulation , and only about 70% of the REG content directly relates to the EA exam. Both of these licenses are great options, but which one should you get.