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After you pass the CPA Exam, you will probably also have to take the ethics exam, which usually costs $130. Finally, you must pay the CPA licensing fees, the mid-range of which comes to about $150. And yes, there are also a few other CPA Exam fees you’ll need to budget for, depending on your situation and testing track record. Another CPA Exam cost you must take into account is the application fee.

EA vs. CPA: How they compare

Their primary area of expertise lies in tax law, including tax planning, preparation of tax returns, and offering tax advice. EAs specialize in all aspects of taxation, making them a resource for navigating the federal tax code. Certified Public Accountants (CPAs) are highly skilled financial professionals recognized for their expertise in accounting, taxation, auditing, and financial planning. CPAs can provide various services to individuals, businesses, and organizations, such as tax preparation, auditing, financial reporting, consulting, and more.

Deciding Which Professional Suits Your Needs

If you start with the CPA Exam and struggle with the REG section, you can temporarily change course by passing the EA exam and earning the EA designation. Then, with your improved understanding of tax accounting, you can come back to REG, pass the CPA Exam, and, ultimately, get the CPA license as well. Most people consider Part 1 (Individuals) and Part 3 (Representation, Practices, and Procedures) to be the easiest. In fact, some experienced tax professionals can pass these parts without much studying. They attend workshops, seminars, and courses relevant to their practice areas to stay enrolled agent vs cpa updated on changing tax laws, regulations, and industry trends. In this blog post, we’ll explore the defining characteristics of EAs and CPAs, delineating their roles, qualifications, services offered, and more.

Understanding these distinctions is important for making informed financial and tax decisions. EAs work on tax matters only, so they can specialize in certain areas such as tax preparation or tax resolution. Therefore, CPAs who specialize in tax should consider obtaining the EA so they can display their tax expertise. So if an EA is a surgeon, a CPA is like a general practitioner, handling everything from tax return preparation to financial planning, auditing, and business consulting.

EA vs CPA: What’s the Difference and Which Do You Need?

Enrolled agents, or EAs, are tax preparers the IRS has authorized to represent taxpayers. Enrolled agent clients include individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. NAEA (the National Association of Enrolled Agents) states that they can represent, prepare tax returns, and do tax consulting for just about anyone. In plain language, think of an EA as a tax specialist who works with the precision of a surgeon—carefully navigating tax laws, maximizing deductions, and resolving IRS issues. According to salary.com, enrolled agent salaries typically range between $44,657 and $62,255 a year. In general, CPAs earn more than EAs, and CPAs also benefit from increased earning potential as time goes on.

Am I Running a Hobby or a Business?

Once they’ve done so, they can use their expanded tax knowledge to return to the CPA Exam, pass it, and get their CPA license as well. The EA exam has three parts, and most people find the first and third parts to be the easiest because some experienced tax professionals can pass these parts with minimal studying. Conversely, almost everyone must work hard to pass the second part–Businesses– so it’s naturally considered the hardest.

• CPAs can provide various services to individuals, businesses, and organizations, such as tax preparation, auditing, financial reporting, consulting, and more.
• On the other hand, many CPAs start off in audit firms, but as they accumulate experience, they can launch their own practices and acquire their own clients.
• There are three sections to the exam, which cover individuals, businesses and representation and practices and procedures.
• Once you pass your first section, you have 18 months to pass the remaining three sections.

Their specialized focus on taxation enables them to offer competitive pricing for tax preparation, planning, and representation services. EAs ensure clients’ tax compliance by meticulously preparing accurate tax returns and adhering to current tax laws and regulations. Their focus on tax-related matters ensures thorough compliance, reducing the risk of errors and potential penalties. EAs pass a comprehensive three-part Special Enrollment Examination (SEE) covering individual and business tax matters, ethics, and representation.

It’s not a matter of simply passing a test to become a CPA; it requires detailed knowledge of accounting, auditing, tax law, and financial management. When you employ an enrolled agent (EA), you’re getting a tax professional who’s put in serious effort to master tax laws. To earn their credential, they must pass the Special Enrollment Examination (SEE)—a three-part, rigorous examination on individual and business return tax laws, IRS procedures, and regulations. 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. Typically, their clients are businesses that need both accounting and tax services.

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Depending on your tax situation, you may want to work with an Enrolled Agent or a Certified Public Accountant. When deciding between an EA or a CPA, you will see that both types of professionals are well-qualified. They can both deliver the financial guidance you may need for your taxes. However, which one you should consult depends on which issue you want to resolve. In conclusion, choosing between EAs and CPAs hinges on your specific tax and financial needs.

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.

CPA vs EA

In other words, a CPA is the go-to if you’re looking for a broad scope of expertise. An enrolled agent, or EA, is a tax professional who focuses on managing tax arrangements for business or private entities. EAs boast a wide range of knowledge in tax-related subjects such as income, estate, gift, payroll, levies, returns, inheritance, non-profit and retirement taxes.

• You must then pass that section and any other unpassed sections within 18 months of the time you passed your second section.
• Generally speaking, EAs tend to charge lower fees compared to CPAs, particularly for routine tax preparation and consultation.
• An EA or CPA who is nearby might also have a network of local professionals, such as lawyers and bankers, that you can tap into if you need additional financial services.
• However, enrolled agents have the opportunity to earn extra money during tax season.

If you’re primarily looking for someone to prepare your income tax return, either an EA or CPA will likely be able to meet your needs. However, as your taxes become more complex or sophisticated, a CPA might be more suitable. Certified public accountants, or CPAs, have a more flexible and expansive repertoire than EAs. They deal in all sorts of realms within the tax world, making them a great choice if your questions involve multiple topics.

CPAs can also help clients with strategic planning, budgeting, forecasting, decision-making, and problem-solving. CPAs typically do most of their work for public accounting firms of all sizes. They could be specifically licensed as auditors, financial planners, corporate and executive accountants and tax consultants. So, CPAs could assist in all accounting, tax and financial services for the businesses, individuals and other organizations they may represent. Both certifications are viewed with equal standing in the eyes of the IRS. Both CPAs and EAs have unlimited practice rights, which means there are no restrictions on the types of tax issues they can tackle.

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. Each of the exam’s four sections costs about $200, depending on the state. There is also a continuing education component, but the exact number of credit hours varies by state.