While both EAs and CPAs are qualified to provide tax services, there are differences between the two. You may be somewhat familiar with both enrolled agents (EA) and certified public accountants (CPA), but knowing which one to choose when you need some help can be a challenge. While both can provide high-quality services, there are key differences to be aware of. CPAs can handle both accounting and tax matters.A CPA’s expertise mainly lies in accounting and auditing, but most can provide tax filing services as well. This combination is attractive to small businesses that need both audit and tax services, preferably from the same team.
Scope of Services
Another CPA Exam cost you must take into account is the application fee. You’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. To become an enrolled agent, you must either take the EA exam, also known as the Special Enrollment Exam (SEE), or have previous work experience at the IRS.
While many CPAs offer tax services, they might specialize in specific types of tax assistance. EAs are tax specialists with unlimited rights to represent taxpayers before the IRS. They can assist with tax planning and preparation and resolution of tax issues, such as audits, collections, and appeals. When deciding between working with an EA or a CPA, you can rest assured that both types of professionals are well-trained.
The primary difference between EAs and CPAs is their scope of work. While EAs primarily focus on tax-related issues, CPAs can deal with a host of financial subjects including taxation. The Uniform CPA Exam is a four-part exam, with each part enrolled agent vs cpa taken individually and in any order.
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To learn more about the pros, cons, differences, and similarities between these three tax pros, check out our post on EAs vs. CPAs vs. Tax Attorneys. The requirements for CPA licensing are demanding, and the exact rules vary from state to state. In most cases, obtaining this designation, first of all, requires a bachelor’s degree in either accounting, finance, or business administration. Generally, applicants have to have completed at least 150 credit hours of coursework as part of their education. Additionally, you must work in an accounting position for 1 to 2 years to meet the CPA work experience requirement. The CPA Exam has testing all year long, but it has a shorter period to pass all four exams.
- Both the EA and the CPA credentials come with a strict code of ethics and professional standards.
- A CPA’s expertise is based on accounting and auditing, but most CPAs provide tax filing services as well.
- You just need a Personal Tax Identification Number (PTIN) to schedule the 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.
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EAs clients encompass individuals, partnerships, corporations, estates, trusts, and other entities with tax-reporting requirements. Additionally, as we saw above, the process of earning an EA designation is substantially less expensive upfront. And these costs don’t take into account the additional education requirements for a CPA. Therefore, they may have a tax specialization, such as tax preparation or resolution. For this reason, a CPA specializing in tax should consider earning the EA to demonstrate their tax expertise.
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- You’ll need to decide for yourself which is a better fit for your skills and lifestyle.
- Whether you opt for a CPA’s comprehensive financial services or an EA’s specialized tax expertise, you can be confident that you are working with a knowledgeable and skilled professional.
- The Uniform CPA Exam is a four-part exam, with each part taken individually and in any order.
What is the CPA Exam? A complete guide.
In contrast, a CPA may better fit a business owner who needs more comprehensive financial planning and management services. Naturally, you should consider the qualifications and experience of any accounting professional you work with. An EA is a good fit if you just need help with tax preparation and planning. If you need help with financial planning and management, a CPA might be a better choice.
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Enrolled agents’ knowledge in the continually changing field of taxation enables them to effectively represent taxpayers at all administrative levels within the IRS. Choosing between an EA and CPA certification also depends on the career opportunities and flexibility you seek. EAs are tax experts who can represent clients before the IRS, making them highly valuable during tax season. Their expertise is particularly beneficial for individuals and businesses seeking specialized tax advice. CPAs, however, enjoy a wider range of career opportunities beyond tax preparation, including roles in auditing, management consulting and financial analysis. This versatility allows CPAs to work in various industries and positions, offering greater career flexibility.
The less time you take to get the designation, the sooner you and your clients can enjoy your improved status with the IRS. Since the IRS empowers enrolled agents with an unlimited right to practice on a federal level, enrolled agents can work with a client who may have filings across all states in the U.S. 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.
What can a CPA do that an EA can’t?
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. For tax purposes, a CPA’s main differentiator is the ability to attest an audit, which means it affirms to the IRS that financial statements are truthful. To accomplish that, a CPA will request bank statements and other proof, which limits the possibility of mistakes. With CPA you have to contact the state boards of accountancy anytime you move to validate your license before practicing.
The cost of a CPA license is $150 and this does not include the expenses of passing the exam such as the application fee and cost of study materials which can be as high as $1,700. Overall, it can touch $3k, excluding what it costs to complete the required continuing education of 120 hours over 3 years. Their state board of accountancy licenses them to provide a range of accounting and financial services, including tax services.
However, CPAs might offer additional services and depth of expertise that could be worth the higher cost. To become a CPA, a person must take 150 hours of public accounting courses, typically done at a college or university. CPAs look deeply into the financial equation, evaluate numbers, create projections and try to provide an overall picture, forecast, and recommendations based on internal and historical data.
CPA candidates usually choose a course like Becker CPA, Gleim CPA, or Surgent CPA. 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. Using a review course is just as essential to passing the CPA Exam as the EA exam (if not more so), and CPA Exam prep is also pricier.