Whether it comes to business or individual accounting and tax planning, sometimes finding the right type of help can become another problem altogether. If you’re looking for a licensed tax professional to help guide you, a clear understanding of the most important tax accreditations and the differences between them will really save you time. You need https://www.bookstime.com/ to know the answer when you’re contemplating whether to earn the enrolled agent (EA) designation or the Certified Public Accountant (CPA) certification. Tax Preparers looking to further their careers have several options open to them, and these are two of the most popular. Which one you choose will depend on your areas of interest and expertise.
What’s the Difference Between EAs and CPAs?
Most tax return preparers provide outstanding and professional tax service. However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer. Be sure to check our tips for choosing a tax preparer and how to avoid unethical “ghost” return preparers. Attorneys have undergone rigorous education including earning a law degree and passing their state’s bar exam. However, though some attorneys specialize in tax preparation and planning, most offer a range of other services and are often not the first choice for financial guidance.
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The key to finding the best professional for your needs is to find a professional that is local and has experience with your unique tax problem. TaxCure helps you do just that, so start a search today to find the best professional to help you. However, if you need an independent audit of your business’s accounting records, then you will need to hire a CPA. Similarly, if you’re looking for business or individual financial planning, a CPA tends to be a better choice than an EA. Primarily, both EAs and CPAs must pass a test to demonstrate their understanding of the industry, and they must complete continuing education to stay abreast of changes in the industry. While many accountants will take the steps to earn their CPA designation, it’s important to note that not every accountant is a CPA.
- Another CPA Exam cost you must take into account is the application fee.
- For a more detailed look at the EA versus CPA Exams and a direct comparison of CMA vs CPA vs EA exams, check out our post on the difficulty of the EA exam.
- If budgetary concerns are a factor, an EA is likely the best decision.
- For tax purposes, a CPA’s main differentiator is the ability to attest an audit, which means it affirms to the IRS that financial statements are truthful.
- Stephanie Ng began her career as an investment banker at Lehman Brothers in New York and Morgan Stanley in Hong Kong.
What is a Certified Public Accountant (CPA)?
Understanding these differences can help small business owners or self-employed individuals choose the right professionals for their tax needs. She is also the Executive Committee member responsible for Finance at New Sight Eye Care, a charity registered in the United Kingdom and Hong Kong. She oversees the financial aspect of New Sight in Hong Kong, including accounting, taxation, financial management, and compliance.
Anyone applying to be an enrolled agent must pass a background check, which includes a review of the applicant’s tax transcript—essentially, a record of past tax obligations or payments. Someone who has failed to file or pay taxes as required can be denied enrollment. Both enrolled agents and CPAs are knowledgeable professionals, trained to deliver helpful financial guidance. Additionally, CPAs are licensed by state boards of accountancy, including U.S. territories and the District of Columbia.
What Does an EA Do?
In addition, states approve CPAs, while the federal government approves EAs. If you’re not sure where to start, TaxCure can help you find the perfect tax professional to tax preparer vs cpa fit your needs, based on the specific problem you’re having. We can also help you narrow down your search to filter for EAs, CPAs, or even tax attorneys if desired.
The EA vs CPA Value-Add to Clients
Normally, the clients of CPAs are businesses requiring both accounting and tax services. CPAs typically do most of their work for public accounting firms of all sizes. They could be specifically licensed as auditors, financial planners, corporate and executive accountants and tax consultants. So CPAs could assist in all accounting, tax and financial services for the businesses, individuals and other organizations they may represent. A certified public accountant (CPA) is a state-licensed professional capable of providing a range of taxation and financial management services.
Are you looking for general financial assistance?
EAs can’t perform audits, but they’re highly qualified to handle tax-related issues and are a popular choice among small business owners and self-employed individuals. If you require a professional to handle your straightforward tax needs, an EA may be the right choice. However, a CPA may be better if you require broader financial guidance beyond taxes, need financial reporting, audits, or valuations, or seek expert investment and financial planning. EAs work on tax matters only, so they can specialize in certain areas such as tax preparation or tax resolution.
- If you can get clear about the nature and extent of your own needs, you’ll be much better placed to make the right decision for you or your business.
- Generally, applicants have to have completed at least 150 credit hours of coursework as part of their education.
- CPAs can handle both accounting and tax matters.A CPA’s expertise mainly lies in accounting and auditing, but most can provide tax filing services as well.
- CPAs also tend to be in higher demand than EAs, but that’s probably only because CPA is a better-known license than EA.
- The less time you take to get the designation, the sooner you and your clients can enjoy your improved status with the IRS.
- At MyRQB, we offer outsourced bookkeeping services for small-to-midsize businesses who need time to focus on the fundamentals of running a company.
Although they can provide financial advice, CPAs can’t offer legal services or represent you in court. It’s also worth noting that there are differences between a Chartered Accountant (CA) and a Certified Public Accountant (CPA). While both designations represent highly qualified accounting professionals, key differences exist between them primarily concerning location and agent specialization. It is mandatory for all candidates applying for a position at EA to complete a background check. In addition to other requirements, an EA must adhere to ethical standards established by the US Department of Treasury.