EA Designation

Accordingly, you must then pass that section and any other unpassed sections within 30 months of the time you passed your second section. With such tight deadlines, relying on a CPA review course and faithfully adhering to a consistent study schedule is even more critical for achieving CPA Exam success. To become an enrolled agent, you must either take the EA exam, also known as the Special Enrollment Exam (SEE), or have previous work experience at the IRS. Passing the exam is much easier once you have several years of tax experience. In fact, you can schedule and sit for the exam as soon as you obtain a Personal Tax Identification Number (PTIN), even if you are still in college. 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.

To answer this question, it’s essential to understand what EA represents in the field of accounting. Additionally, as we saw above, the process of earning an EA designation is substantially less expensive upfront. And these costs don’t take into account the additional education requirements for a CPA. 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.

If you’re facing an IRS audit or tax disputes or need representation before the IRS, an EA might be your best bet—they specialize in tax-related matters. An EA license is federal licensure that allows enrolled agents to represent clients across all 50 states on tax matters. If your path to the IRS enrolled agent credential runs through the EA exam, you don’t need to meet an experience requirement. And once you’ve passed, you can apply for enrollment by filling out Form 23.

The Enrolled Agent status is the highest qualification awarded by the IRS. CPAs have a well-earned reputation for being experts in accounting, compliance and finance management. But they’re not the only ones who can help people make sense of tax issues and concerns. If you’re considering a career focused on assisting clients with tax-related issues, you may be weighing your options between enrolled agent vs CPA. Finally, once you pass the EA exam and are ready to become an enrolled agent, you’ll have to pay the IRS $140 to complete the enrollment process. Over the course of becoming an EA, you’ll also want to consider additional enrolled agent exam costs covering retakes, testing appointment reschedules, and continuing education courses.

Continuing education

An audit of your business deductions, expenses and income is in order. To do that, a CPA will request bank statements and other proof, which limits the possibility of mistakes, Wachsler says. But make sure any professional you hire will guarantee their work on your returns, she adds. That means they agree to represent you later pro bono if there’s a problem with the return. EA vs CPA – From working in management to becoming tax professionals, accounting students have plenty of options when it comes to credentials and specializations.

How Can You Prepare for the EA Exam?

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. 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 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.

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. You need at least five years of experience working for the IRS to be eligible for the second option. You don’t need a degree, formal finance, or accounting education background to be an EA. Many people love the idea of working as Certified Public Accountants (CPA), but hardly anyone ever dreams of becoming an enrolled agent (EA).

• The best part is that they do the work of filing your taxes for you.
• An Enrolled Agent (or EA) is a tax professional recognized by the United States federal government to represent taxpayers in dealings with the Internal Revenue Service.
• From there, you can apply to become an enrolled agent and receive your certification by passing a background check with a thorough review of your personal tax filings.
• CPAs, or Certified Public Accountants, are licensed individuals with the statutory privilege to sign an audit report.
• For example, a base flat fee for your tax return, plus additional hourly charges for any extra consultation needed.

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The key difference is in the depth of expertise and the range of services. If you’re an individual with a simple tax return, an EA can likely handle it. But if you’re a business owner, have investments, multiple income streams, or simply want more comprehensive financial advice, a CPA is the better choice. To become a CPA, candidates must pass a four-part exam and comply with education and experience requirements.

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. But if you aren’t sure which practice area you’d like to go into or want to try a few different roles, the CPA is what does ea stand for in accounting the better option. Do your research, and find out which fits your career goals and time restraints. The time it takes to become an enrolled agent depends on which certification pathway you choose. If you follow the examination track, you can earn EA certification as soon as you pass all three sections of the SEE, which could take months with proper preparation. The experience pathway requires at least five years of IRS employment.

What is an enrolled agent vs CPA?

So if you’re passionate about tax and aren’t interested in auditing or financial reporting, becoming an EA may be a good fit. In conclusion, EA stands for Estimated Annual in accounting, and it’s a crucial concept for businesses to estimate their annual profits or losses. By understanding the factors that influence EA, accountants and managers can make informed decisions to drive business growth and performance. Remember, EA can be calculated using actual data or budgeted estimates, and it’s essential to consider historical performance, industry trends, and management goals when estimating annual income or losses. From the perspective of the IRS, CPAs and EAs are on the same level. Because the CPA Exam is so expensive to take, candidates usually invest quite a bit more in their review courses to better pass the exam on the first attempt.

Each section tests your knowledge of taxation sub-domains, business taxation, and representation rights and procedures. You do not need any particular type or amount of professional experience if you elect to certify by examination. If you choose to become certified through experience, you must meet the standards laid out in Treasury Department Circular 230. The IRS does not require EA candidates to hold any particular degree or level of educational attainment. Instead, people can qualify solely based on their taxation knowledge or IRS work experience. Due to their specialized focus, EAs are often seen as the go-to professionals for anything tax-related, especially when dealing with the IRS.

Typically, their clients are businesses that need both accounting and tax services. They’re also a great option if you need tax preparation and planning advice for an individual or business. The CPA license takes a significantly bigger commitment than the EA credential and is specific to each individual state.

• Additionally, CPAs earn more than their EA counterparts with a similar level of experience.
• All information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice.
• 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 also has its own rules for maintaining the license, but most require at least 40 hours of continuing education per year.

EAs advise, represent and prepare tax returns for individuals, partnerships, corporations, estates, trusts and any entities with tax-reporting requirements. CPAs are state-licensed professionals who provide accounting, tax, financial planning, and consulting services to individuals, businesses, and other organizations. As with EAs, a licensed CPA is also authorized to represent clients before the IRS. The first involves passing the Special Enrollment Examination (SEE), a three-part test designed by the IRS and issued by Prometric.