Additionally, if you have broader accounting needs — for instance, your bank requires a reviewed financial statement to comply with loan covenants, A CPA may be your better choice. If you need help with an IRS issue, such as a collection problem or an audit, an EA might be your best bet. They’re typically adept at dealing with the IRS, and some EAs even worked as IRS agents before opening their own practices. Certified public accountants, or CPAs, have a more flexible and expansive repertoire than EAs.
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Although not all CPAs prepare taxes, this does not diminish the expertise of a tax specialist who is a CPA. There is a misconception that all CPAs do is “account” for the numbers that go into a return but that is not true. CPAs that specialize in tax offer services such as advance tax planning, trust and estate planning, and financial planning. The exam is the same no matter which state it’s taken in, but every state has its own education and experience requirements.
- The IRS awards EA status while each state’s board of accountancy issues CPA licenses.
- To get this information, it’s a good idea to ask for an initial consultation where you can learn about an EA or CPA’s fees and other important matters about the services they offer.
- The 150 semester hours in a bachelor’s or master’s program plus the additional work experience of 1-2 years and an 18-month testing window means that your CPA journey will be a long one.
Now, consider a mid-sized business owner getting ready to expand the business, seek investors, or get a business loan. The company’s finances need to be in top shape, and financial statements need to be audited. “Agent” means authorized to appear in place of the taxpayer at the IRS.
This blog post can help you understand what you need to know between those two titles and how they can help you. Implement our API within your platform to provide your clients with accounting services. Although the requirements differ by state, CPAs generally need 40 hours of CPE per year. The IRS does not require applicants to have an accounting degree, or any degree for that matter, to become an enrolled agent.
EAs and CPAs
You don’t need a degree, formal finance, or accounting education background to be an EA. By the end of this comprehensive and interesting article, you will understand what is EA, what is CPA, and which career path is best for you. Welcome to today’s comprehensive and in-depth analysis of CPA vs EA education, roles, licensing, and salaries. Sign up for a 15-day free trial to experience Synder yourself or take a guided tour of Synder’s robust what does ea mean in accounting functionality during our Weekly Public Demo. Please fill out the form below and press “Show Download Link” button to get the link. But how does the Enrolled Agent (EA) role stack up against being a CPA?
Having both your CPA license and your EA credential can improve your career trajectory and help you better serve your clients. However, if you currently meet the EA requirements, it may benefit you to continue on this path before working on your CPA license. With a license to work on any area of accounting, you’ll have the flexibility to work anywhere that needs strategic financial management. For those with greater professional ambitions, being a CPA is the jumping block to leadership and executive roles. We offer a full suite of financial services, from tax strategy to outsourced CFO services and business advisory. Because they’ve met rigorous educational and experience standards, you get a higher level of insight and service.
CFP Designations: Why it is Important to Your Career in 2025
- They are highly trained in accounting principles, financial planning, and tax law, making them ideal for clients with complex financial situations or those seeking broader financial advice.
- 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.
- Sign up for a 15-day free trial to experience Synder yourself or take a guided tour of Synder’s robust functionality during our Weekly Public Demo.
- CPA requirements vary depending on the jurisdictions, with some states imposing more requirements than others.
- EAs are a great option if you need tax preparation and tax planning advice for an individual or business.
✅ A CPA may be the appropriate professional to assist with financial reporting, auditing, and making sure the business is in compliance with regulatory needs. Whether you want an expert to do your taxes from start to finish, or expert help while you file on your own, TurboTax has expert-backed offerings to meet your needs. With TurboTax Live Assisted, our tax experts help you complete your taxes, fix any mistakes, and explain what’s next. Or, with TurboTax Live Full Service, a local tax expert matched to your unique situation will get your taxes done 100% right – as soon as today. Whichever plan you choose, you’ll get you taxes done with 100% accuracy and your maximum refund, guaranteed.Get started now by logging into TurboTax and file with confidence.
When a CPA is the right choice
For example, there might be separate charges for Form 1040, Schedule C (for business income), Schedule E (for rental income), and other forms included in your return. However, that fee will likely be based on the amount of time the tax preparer expects to spend on your return. So, as with an hourly rate, you’ll probably pay more if your tax return is more involved.
Meetings and phone calls can be scheduled without having to worry about traveling far or time zone differences. You can connect with a licensed CPA or EA who can file your business tax returns. Jeremias Ramos is a CPA working at a nationally recognized full-service accounting, tax, and consulting firm with offices conveniently located throughout the Northeast.
They boast a wide range of tax knowledge in such tax related subjects such as income, estate, gift, payroll, levies, returns, credits, retirement taxes, and tax planning. 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. In conclusion, EA stands for Estimated Amount, which is an estimate of a specific financial item or expense.
To become an EA, an individual must pass a three-part exam administered by the IRS. The exam covers topics such as Individual and Business Tax Returns, Representation, Ethics, and Federal Tax Law. Enrolled agents must also meet continuing education requirements to maintain their status. EAs are not licensed by the state and do not have to meet state-specific education or experience requirements. However, they must meet the IRS’s requirements for enrolling as an EA and pass a background check.
They must pass rigorous exams and can do difficult and demanding work for clients. And because tax attorney fees can often climb well into the four figures, both CPAs and EAs are also an affordable alternative for those who need help figuring out tax obligations. Be sure that if you choose to consult with either type of professional you have a solid handle on your finances and measure your expectations. Possessing excellent auditing skills will open the doors to many great career options considering that the demand for tax experts is very high. EAs and CPAs are tax preparers who do tax reports, including quarterly, yearly, and multistate tax audit reports on behalf of their clients.
What Are The Differences Between a CPA and an EA?
Some professionals also specialize in certain areas such as real estate, investments, or international taxation. For example, small business owners might seek an EA or CPA with expertise in business taxes. Generally speaking, EAs tend to charge lower fees compared to CPAs, particularly for routine tax preparation and consultation. However, CPAs might offer additional services and depth of expertise that could be worth the higher cost.
You can combine both credentials and further improve your career choices if you’re up to it. If you’re dreaming of making your fortunes in the financial sector, you should seriously consider a career as either a CPA or EA. The best career option between a CPA and EA will boil down to what you want to achieve in your professional career.