CE requirements are determined at the state levels and are cyclical (e.g. 120 hours in 3 years.) Your employer may or may not bear the cost of CPE or licensure. Enrolled Agents are essential to making sure that individuals and businesses have an advocate in issues with the IRS and can successfully navigate complex federal taxes. Thus, the IRS has strict requirements in place to guarantee that anyone with the credential has the in-depth knowledge to act as a trusted expert to their clients.

For Enrolled Agents: The Special Enrollment Examination (SEE)

This could depend on where the individual is on the career ladder. However, the salary of a CPA will quickly exceed the salary pace of an EA. This is because the income potential for enrolled agents tends to taper out over time.

• In your budgeting process, I suggest accounting for additional enrolled agent exam costs.
• They generally have no limits on who they can represent, and they can appear before any IRS office.
• If you really want to do a deep dive and get the specific requirements, check out our full CPA requirements by state.
• CPAs are state-licensed professionals who provide accounting, tax, financial planning, and consulting services to individuals, businesses, and other organizations.
• While CPAs earn more, many tax professionals find the EA path more fulfilling due to its micro focus on tax issues and less rigorous exam cycle.
• The EA questions are easier, so most candidates only need a few months to pass the EA exam as opposed to the months typically needed to pass the CPA Exam.

What is an EA?

Yes, this requirement is equivalent to a bachelor’s degree, and many state boards also prefer you have your degree in accounting. In order to become an enrolled agent, you must either take the Special Enrollment Exam (SEE), also known as the enrolled agent (EA) exam, or have previous work experience at the IRS. While passing the https://www.bookstime.com/ exam is much easier once you’ve acquired several years of tax experience, there is no prerequisite for taking the EA exam. You just need a Personal Tax Identification Number (PTIN) to schedule the exam. Generally speaking, EAs tend to charge lower fees compared to CPAs, particularly for routine tax preparation and consultation.

Enrolled Agent Exam vs CPA exam

But it is equally important to fulfill the terms and conditions of any contract that they enter into with their clients. If required, these professionals should be able to testify in front of the IRS and submit all legal documents. In case they enrolled agent salary are omitting any important information, they should provide a proper explanation regarding the same, otherwise, there may be serious legal consequences. With the information you now have, you can choose a tax professional for your business.

How to hire an EA or CPA

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. EAs are not as common in the business sector, which means that you could choose to work from home. CPAs, on the other hand, are integral to businesses and also work in the public sector in more traditional capacity. Being an EA offers more flexibility in terms of lifestyle in terms of choosing where and how much you want to work.

They deal in all sorts of realms within the tax world, making them a great choice if your questions involve multiple topics. In addition, states approve CPAs, while the federal government approves EAs. To become a CPA you must first complete the education requirements of the state in which you plan to practice.

• However, they are distinct in their scope of practice, areas of specialization, and the types of clients they typically serve.
• CPAs can provide a much wider scope of tax services than an EA can.
• It can get a little confusing with all the accounting acronyms out there.
• Every state board of accountancy mandates 150 credit hours of education to sit for the CPA exam.
• CPAs can work for the government, large and small companies/corporations, in not-for-profits or be self-employed.

Salary Differences

CPAs are licensed at the state level and can only practice in that state. This is one of the biggest differences between CPA’s and enrolled agents, who are licensed on a federal level. Along with details regarding how to gain the enrolled agent status, it is equally important to have a clear idea about the salary structure. Since this option is gaining a lot of value as a career choice, candidates need to remain updated about the continuously changing legal and taxation landscape globally. However, salary will depend on the type and years of experience and also the location of their job. For instance, in California, the salary will be comparatively higher than any other location in the US.

Enrolled Agents: Everything you need to know

Furthermore, the questions in the REG CPA Exam section aren’t as in-depth as the tax questions in the EA exam. However, the CPA Exam questions are harder because it presents task-based simulations in addition to multiple-choice questions. If you remember, the EA exam includes 3 parts, whereas the CPA Exam features 4 sections.