If you want to advance your career as a tax professional, you may have probably faced a difficult decision: CPA vs. EA. Both are valid points of view, but each has advantages and disadvantages that will affect your career in the long run.
iLead Tax Academy is a leading financial service provider and the enrolled agent course training institute in Hyderabad, offering a variety of accounting, QuickBooks, and payroll courses as well as recognized certification and placement assistance.
In this post, you will learn the key distinctions between CPAs and enrolled agents. Continue reading to learn more:
CPA vs. EA: What are they?
Certified Public Accountants are licensed accountants who have the legal authority to sign audit reports. They can prepare financial statements, perform audits, and provide tax advice to clients. CPAs’ typical clients are businesses that require both accounting and tax services.
Enrolled agents are IRS representatives of taxpayers. Individuals, corporations, partnerships, trusts, estates, and any other entity with tax reporting requirements are enrolled, agent clients.
CPA vs. EA: What are exam and license requirements?
The path to becoming an EA expert or a CPA is very similar. The main distinction between these two processes is how the basic requirements are met.
- Be eligible for the exam
You must either take the Special Enrollment Exam (SEE), also known as the enrolled agent (EA) exam or have prior work experience at the IRS to become an enrolled agent. While having several years of tax experience makes passing the exam much easier, there is no prerequisite for taking the EA exam. As a result, you could take it during your college years if you wanted. To schedule the exam, all you need is a Personal Tax Identification Number (PTIN).
In contrast to taking the CPA Exam, you must meet certain educational requirements. The CPA Exam application and licensure requirements are set by the various state boards of accountancy, and almost everyone expects you to have 120 credit hours of education to sit for the exam. Yes, this is the equivalent of a bachelor’s degree, and many state boards prefer that you have a degree in accounting.
- Prepare for the exam
The EA exam has three sections, and most people consider the first and third sections to be the easiest because some experienced tax professionals can pass these sections with little preparation. In contrast, almost everyone must work hard to pass the second part, Business, so it is naturally regarded as the most difficult. iLead provides the best-enrolled agent training online, with a staff of professionals and experts to assist you in your preparation.
The CPA Exam is divided into four sections and covers a much broader range of topics. Regulation (REG) is the section equivalent to the EA exam, and only about 70% of the REG content directly relates to the EA exam. The remainder covers various topics such as business law.
Still, when we compare the taxation section of the REG exam to the taxation section of the EA exam, we find a lot of overlap. Because of the amount of shared content, candidates may be able to earn both certifications at the same time. Candidates who struggle to pass REG can focus their efforts on passing the EA exam and earning the EA designation. After that, they can use their expanded tax knowledge to retake the CPA Exam, pass it, and obtain their CPA license.
- Kick the exam
As previously stated, the EA exam has three parts. The only time you cannot take the EA exam is between March and April. Otherwise, the testing window is open from May 1 to February 28, and you can take the exam at any time during that period. You can take the exam sections hours, days, or months apart, and in any order you want. If you fail an EA exam section, you can retake it three times more (for a total of four times) during the testing window. Using an EA review course and sticking to a study schedule is the best way to pass the EA exam on time. This study plan should include completing all three parts in two years.
The CPA Exam has been tested all year, but there is a shorter time frame to pass all four exams. You must pass all four sections of the CPA Exam within a rolling 18-month period beginning with your first exam section. After passing the first section, you have 18 months to complete the remaining three sections. If you do not complete the remaining sections within this time frame, you will lose credit for the first one you completed. You must then pass that section as well as any other unpassed sections within 18 months of passing your second section. With such strict deadlines, relying on a CPA review course and consistently studying is critical for CPA Exam success.
CPA vs. EA: What do compensation and career look like?
Enrolled agents are not typically employed by a company. They have clients and thus can work from home with flexible hours. Many CPAs begin their careers in audit firms, but as they gain experience, they can open their CPA firms and gain clients. CPAs are paid more than enrolled agents, according to the study.
Choose the top enrolled agent training institute or CPA training institute to build up your career in a better manner.
CPA vs. Enrolled Agent: Advantages of it?
Superior service can be provided by both enrolled agents and CPAs. To demonstrate this, consider how enrolled agents add value first, followed by the assistance CPAs can provide.
The EA Advantage
Enrolled agents are tax specialists: Because EAs only work with taxes, they can specialize in areas such as tax preparation or tax resolution. As a result, CPAs who specialize in tax should consider obtaining the EA to demonstrate their tax expertise.
The EA title is a federal credential: Because the enrolled agent credential is issued by the IRS and includes the unlimited right to practice on a federal level, EAs can work with other clients also from all over the country.
Enrolled agents are a less expensive option than tax attorneys: Enrolled agents can typically provide the same services as tax attorneys at a much lower cost. Enrolled agents, for example, can represent their clients in civil resolution cases.
The CPA Advantage
Tax and accounting issues can be handled by CPAs: A CPA’s expertise is primarily in accounting and auditing, but most can also provide tax filing services. This combination is appealing to small businesses that require audit and tax services from the same team.
CPAs can help with tax planning by taking a holistic approach: Hiring a CPA is the better option for businesses because someone who “knows the numbers” can make better tax plans.
Do you want to become a professional enrolled agent training or CPA training? If this is the case, iLead Tax Academy would be the best choice for candidates looking to become enrolled agents because it offers high-quality training. Enrolled Agent program training from iLead Tax Academy can help you advance your career in US taxation significantly. We have qualified enrolled agent trainers on hand to help candidates pass the exam. Choose the best one for you. All the best!