Once certified, EAs are federally licensed, allowing them to practice in any state. Their primary focus is what does ea mean in accounting taxation, enabling them to prepare tax returns, represent clients during audits, and provide expert tax advice. This specialization in taxation makes EAs uniquely qualified to navigate complex tax issues for individuals and businesses. An enrolled agent (EA) is a tax professional licensed by the IRS to represent taxpayers regarding audits, collections, and appeals. Unlike the majority of tax preparers, EAs have unlimited representation rights before the IRS on behalf of taxpayers with personal and business tax returns. A general tax preparer is someone who assists with filing tax returns, but they may have limited formal training compared to CPAs or EAs.
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- Generally speaking, EAs tend to charge lower fees compared to CPAs, particularly for routine tax preparation and consultation.
- The company’s finances need to be in top shape, and financial statements need to be audited.
- The two finance professionals have many similarities and differences that we will explore in the following sections.
- If you want to specialize as a tax professional but don’t want to tackle the CPA exam or licensure requirements, the EA route is perfect for you.
- Matching your situation with the right professional is in your best interest.
- The exam is the same no matter which state it’s taken in, but every state has its own education and experience requirements.
The exam is the same from state to state, but every state has its own education and experience requirements. Most states require at least a bachelor’s degree and some previous public accounting experience under the supervision of a licensed CPA. CPAs are federally approved to represent you in all matters before the IRS. 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.
EA vs CPA: The requirements
To understand the difference between an EA and a CPA, it’s helpful to start with the responsibilities and day-to-day work of each. When you’re a Pro, you’re able to pick up tax filing, consultation, and bookkeeping jobs on our platform while maintaining your flexibility. Now that you know the differences between a CPA and an EA, now it’s time to find the right person to help you file your taxes. EAs and CPAs both can be tax experts, and the work they do is often similar, but there are some differences between an EA vs CPA.
If you’re trying to line up an EA or CPA at the peak of tax season, then you might have to pay more. 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. Each state’s board of accountancy also has ethical rules and regulations that CPAs must follow. In addition, a certain number of the required continuing education hours typically must cover ethics. EAs and CPAs can both be tax experts, and the work they do is often similar, but there are some clear differences when you do an EA vs. CPA comparison.
Once you click “continue,” you will be brought to a third-party website. Please be aware, the privacy policy may differ on the third-party website. Adtalem Global Education is not responsible for the security, contents and accuracy of any information provided on the third-party website. Note that the website may still be a third-party website even the format is similar to the Becker.com website. If you want to take it a step further, you can take the Non-Attorney Exam, which would authorize you to represent clients in Tax Court.
Most require at least a bachelor’s degree and at least two years of public accounting experience. Choosing an enrolled agent (EA) or a certified public accountant (CPA) ultimately depends on your specific tax situation. To help you make the right choice, let’s explore real-world scenarios where each professional shines.
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EAs have unlimited practice rights like attorneys and certified public accountants (CPAs). This means an EA is unrestricted when it comes to which clients they can represent, what types of tax matters they can engage, and which IRS offices they can represent clients before. When you bring a certified public accountant (CPA) on board, you’re getting someone who’s spent years in school, intense exams, and actual experience to earn their title. 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.
Career path
However, an EA may not provide financial statements services like issuing audited financial statements. In short, CPAs can do everything an EA can do but an EA can’t do everything a CPA can do. A Certified Public Accountant (CPA) is an accounting professional who has met state licensing requirements. Because the CPA is awarded by each state board of accountancy, the requirements to become a CPA differ for each state. Not all CPAs do taxes but not all EAs are capable of handling your taxes.
We compare how they differ and where they overlap so that you can feel confident and informed when planning your career. Get a brief on the top business stories of the week, plus CEO interviews, market updates, tech and money news that matters to you. To sum it up simply, „Taxes are laws, and accounting is numbers,” Pinck says. The price for preparing a return may even be comparable between a CPA and a EA.
An EA is a tax professional who has passed a comprehensive exam and background check administered by the IRS. The IRS licenses enrolled agents to represent taxpayers before the agency, including in matters related to audits, collections, and appeals. EAs are federally credentialed tax professionals who can legally represent taxpayers before the IRS. Given this definition, it makes sense for accountants interested in working specifically in tax to become EAs.
Who is an Enrolled Agent (EA)?
So, before you pick an EA or CPA, check out these common questions people have about hiring these two types of tax professionals. With Taxfyle, your firm can access licensed CPAs and EAs who can prepare and review tax returns for your clients. Get $30 off your tax filing job today and access an affordable, licensed Tax Professional.
- In the world of accounting, abbreviations and acronyms are common, and EA is no exception.
- Possessing excellent auditing skills will open the doors to many great career options considering that the demand for tax experts is very high.
- Simply put, EAs can do all the things that CPAs can do when it comes to tax.
- And with TurboTax Live Full Service, you can enjoy tailored assistance from a tax expert near you who’s well suited to handle your specific needs.
Free filing of simple Form 1040 returns only (no schedules except for Earned Income Tax Credit, Child Tax Credit and student loan interest). Get unlimited advice, an expert final review, and your maximum refund, guaranteed with TurboTax Live Assisted Basic. If you want to verify a CPA’s qualifications and credentials, check with the Board of Accountancy for the state where the CPA is located.
Increase your desired income on your desired schedule by using Taxfyle’s platform to pick up tax filing, consultation, and bookkeeping jobs. Tickmark, Inc. and its affiliates do not provide legal, tax or accounting advice. The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations. All information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice.
Both CPAs and EAs are qualified professionals who can provide valuable services, but they have different areas of expertise and may not be suitable for all situations. EA vs CPA – From working in management to becoming tax professionals, accounting students have plenty of options when it comes to credentials and specializations. A CPA license is more difficult to obtain, requires more education, has a more difficult exam and requires more continuing education. Additionally, CPAs earn more than their EA counterparts with a similar level of experience. FATPs are allowed to represent taxpayers in all proceedings before the Internal Revenue Service including audits and appeals.
When you’re looking to hire a tax professional, you want someone knowledgeable — someone you can trust to get the job done and keep your personal information secure. There are a few different kinds of tax specialists you may be able to employ. Depending on your tax situation, you may want to work with an Enrolled Agent or a Certified Public Accountant. When you use Taxfyle, you’re guaranteed an affordable, licensed Professional. The IRS awards EA status while each state’s board of accountancy issues CPA licenses.
In the following sections, we will analyze the similarities in the duties, qualities, and continuing education requirements between EAs and CPAs. You need a 75% pass rate for each section to qualify as a CPA and complete the exam in an 18-month window. On average, you’ll spend over $1000 to earn an enrolled agent designation. Successfully passing the SEE is the only requirement to earn an EA license. To become a CPA, you must satisfy the CPA licensing requirements as prescribed by your state’s board of accountancy. CPAs earn their designation from their state’s board of accountancy after passing a uniform four-part CPA exam.
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