CPAs have the privilege to represent clients in the states where they are licensed, covering a wide range of financial and auditing services. The enrolled agent vs CPA journey both require relevent work experience, passing an exam and fulfilling continued professional education enrolled agent salary (CPE) requirements. Where they vary is in the time nad effort needed to cross their respective finish lines. Unlike CPAs, EAs can’t certify financial statements and provide public accounting outside of tax, which limits their ability to work in a broader capacity.

Enrolled Agent vs CPA: What’s The Right Choice?

• In addition to looking at criminal history, such as the presence of felony convictions, the IRS also considers your tax compliance history when reviewing your candidacy.
• A wide range of roles and handsome salaries are offered based on your experience and skills.
• Top earners (90th percentile) are estimated to make $107,500 annually.
• For example, one of my readers earns more during tax season than he typically earns in a year working in retail.
• Hiring an EA might be the more affordable option because their services are more limited.

So, while a degree may not be required, most Enrolled Agents do have a formal background in finance or accounting to gain the foundational knowledge to fulfill the role. Earning your Enrolled Agent credential opens the doors to wider career opportunities than you would otherwise have. In addition to opening your own tax firm or consultation company, you can also pursue government careers and may be highly sought after by businesses and corporations. Opportunities also exist for EAs in educational roles, such as Tax Educators or Instructors in professional tax courses. They first must obtain a PTIN (Personal Tax Identification Number) from the IRS, which costs $21.

Navigating the World of Tax Professionals and Certified Public Accountants

• CPAs generally have a broader education in accounting and finance.
• Once you pass the EA exam, you only need to take a few more steps to receive the designation.
• Generally speaking, interested candidates should have a background in public accounting.
• But they are as good, if not better, at serving clients with income tax issues.
• However, the CPA is regulated on the state level, and the EA is regulated on the federal level.
• While EAs and CPAs can work in similar environments and industries, the EA career is more specialized and applies more to tax professionals as opposed to the accounting profession as a whole.

However, CPAs might offer additional services and depth of expertise that could be worth the higher cost. Your timing and location can impact https://www.bookstime.com/ the cost of tax preparation, too. If you’re trying to line up an EA or CPA at the peak of tax season, then you might have to pay more.

EA vs. CPA: The Difference Is in the Details

However, you can specialize in an area like tax preparation or tax resolution. That being said, CPAs who also specialize in tax should think about earning the EA title to further demonstrate their expertise. But EAs do have an opportunity to significantly boost their salaries during tax season. For example, one of my readers earns more during tax season than he typically earns in a year working in retail.

Other Exams

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. Comparatively, the EA exam questions are more detailed but contain less variety and complexity.

Enrolled Agent vs CPA vs Tax Preparer

Offering excellent job security and the opportunity to have jurisdiction throughout the United States, the position of enrolled agent can provide a good salary along with a rewarding career. Although CPAs may have a greater earning potential, that salary comes with the need to spend longer in school, gain more work experience, and take a much more in-depth exam. An entry-level enrolled agent with up to five years of experience can typically expect to earn an average of $42,000 per year. An enrolled agent usually works on a year-round basis helping clients. As part of an EA’s job responsibilities, he or she often develops a strategy for handling matters with the IRS. In this capacity, enrolled agents work to reach satisfactory agreements regarding plans, payments, estimations, and settlements.

• They must pass rigorous exams and can do difficult and demanding work for clients.
• Job opportunities for you may be found at tax preparation franchises or working for a CPA.
• CPA candidates must also meet various state education and experience requirements, typically 150 hours of education and one to two years of supervised experience.
• They need to comply with the documentation process as requested by IRS.
• If you pursue the enrolled agent designation via the EA exam, you don’t have to meet an experience requirement.
• Becoming a CPA is challenging, but earning your license can offer career-long benefits, including more engaging work and a higher earning potential.
• For your own piece of mind, you’ll want to check the credentials of an EA or CPA before making a final decision on who to hire.

Scope of work

Be sure to consider additional factors alongside salary when planning your professional path. Enrolled agents must pass the Special Enrollment Examination (SEE), a comprehensive three-part exam the IRS administers. Additionally, candidates must demonstrate their knowledge of individual and business tax returns, including specialized returns. Frequent changes and increasing complexity in tax law mean there is a growing demand for Enrolled Agents (EAs).

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. Take into consideration not just the EA vs CPA salary, but also the educational qualifications, continuing education requirements, and the kind of work-life balance each profession offers. If you have a more complex business environment or need extensive accounting services beyond taxes, a CPA is your go-to professional. CPAs can offer a holistic approach to your business and personal financial needs, from tax planning to strategic financial planning. To become an enrolled agent you should focus your studies on taxation and take the SEE. To become a CPA, you will have to satisfy specific educational requirements first, take a specialized exam, gain work experience and then become licensed in the state in which you intend to work.

Certified Public Accountant Exam