The profession is long established, having first been created in 1884 following fraudulent Civil War-era tax claims. This includes preparation of taxes for individuals and business entities as well as advising clients. You will find job opportunities at tax preparation franchises or working for a CPA. Any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns. However, tax professionals have differing levels of skills, education and expertise.
- In fact, the amount of shared content can help candidates earn both certifications at the same time.
- To get one, you must create an account on the IRS’s website and complete the application.
- In case you’re not familiar with Revenue Procedure 81-38, this was the original Revenue Procedure covering limited practice without enrollment.
- Keep in mind these are minimum costs – they don’t take retakes or more expensive prep materials into account.
As you may recall, the EA exam has one fewer part (three total) than the CPA Exam (four). Therefore, most candidates only need a few months to study for and pass the EA exam. The less time you take to get the designation, the sooner you and your clients can enjoy your improved status with the IRS. 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.
CPA vs EA: Cost of Licensing
An enrolled agent, or EA, is a kind of tax professional who focuses narrowly on managing tax arrangements for business or private entities. EAs boast a wide range of knowledge in such tax-related subjects as income, estate, gift, payroll, levies, returns, inheritance, non-profit and retirement taxes. Once EAs passed their qualifying exam, the federal government recognizes them as tax specialists. An EA’s typical responsibility includes representing his or her clients—businesses or individuals—before the IRS on issues of audits, appeals or tax collection. A professional with this designation typically makes $15,000 to $20,000 more than CPAs annually. You’ll want to seek out an EA for any and all tax-related issues, as they’re the uncontested experts on such topics, according to the IRS.
- It takes about 8-9 years to become a CPA because of all the requirements.
- CPAs are licensed at the state level which limits their scope of practice to within those jurisdictions.
- However, tax professionals have differing levels of skills, education and expertise.
- Those that specialize in tax preparation can also typically help you with tax and financial planning, accounting needs, and most other financial tasks that you might have.
- Whether you require info about income tax, tax returns, tax planning, or IRS representation, an EA will be up to date on tax laws and will be there to help you with tax-related matters.
- There are also only three parts – individuals, businesses, and representation/procedures.
However, becoming a CPA gives you the opportunity to earn more money and enables you to pursue many lucrative career paths that help you live a fulfilled life. If you pursue a college education in business administration or finance as a stepping stone to the CPA certification, you’ll also have options in a wider array of fields for your career. The truth is, comparing CPA vs EA is like comparing apples vs oranges.
CPA vs EA: Estimated Costs
To prove it, let’s start by looking at how enrolled agents add value and then consider the assistance CPAs can provide. 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. Once you pass your first section, you have 18 months to pass the remaining three sections. You must then pass that section and any other unpassed sections within 18 months of the time you passed your second section.
EAs and CPAs
When examining the EA vs. CPA choice, you can rest assured both types of professionals are well-trained. They must pass rigorous exams and can do difficult and demanding work for clients. Be sure that if you choose to consult with either type of professional that you go in with realistic expectations and a solid handle on your finances. Tools like SmartAsset’s SmartAdvisor matching tool can set you up with a financial advisor in your area.
Business Info
Typically this is 1 year of accounting-based work under the supervision of an active CPA. Once you have passed the EA exam, you are federally recognized as a tax specialist. To understand the difference between an enrolled agent and a CPA, we must look at what each of them actually does. This month, we’re exploring the key differences between CPAs and Enrolled Agents, the two most common professional tax designations. Sure, you can put yourself through the stress of doing your taxes…on top of running a business.
EA Exam Topics
In general, CPAs tend to work for public accounting firms, but they also work independently, for large corporations, and in other settings. EAs, on the other hand, deal directly with the IRS as they represent taxpayers regarding audits, collections, and appeals. Complex tax issues, tax code, and tax planning are their specialties. You’ll also need to pass all four sections of the CPA exam within 18 months to earn the certification. Some states also require tax professionals hoping to become CPAs to pass an ethics exam before the certification can be granted.
At MyRQB, we offer outsourced bookkeeping services for small-to-midsize businesses who need time to focus on the fundamentals of running a company. Our highly-trained team of professionals take on the complexities of financial management and record keeping, working closely with the businesses https://personal-accounting.org/enrolled-agent-vs-cpa-3/ we serve. Additionally, CPAs are licensed by state boards of accountancy, including U.S. territories and the District of Columbia. Tax return preparers who have PTINs but are not listed in the directory may provide quality return preparation services, but choose any return preparer wisely.