by Tiffini Gonzalez 1/26/2023
During the tax season, the most sought-after profession is the CPA, Certified Public Account. Did you know that a CPA is not the highest credential a tax preparer can receive? IRS gives that title to the Enrolled Agent. So what exactly is the difference between a CPA and an EA, Enrolled Agent?
What is a CPA?
A CPA or Certified Public Accountant is an accounting professional that can specialize in many different avenues in the accounting world. This includes auditing, financial planning, corporate and executive accounting, and tax consulting.
Most CPAs help their clients achieve financial goals that they have set with money management and a financial plan.
CPAs are also certified through the state after completing 150 hours of accounting courses at a college or university. Followed by a very lengthy test4 part exam. Whereas, EAs are certified through the federal government.
What is an Enrolled Agent (EA)?
An Enrolled Agent (EA) is a tax professional that focuses solely on all types of tax both federal and state. They know every sub-category of tax from income, estate, inheritance, gifts, non-profit, levies, payroll and retirement taxes.
Enrolled Agents are also able to represent individuals and companies if a client has a tax audit, tax appeal, or tax collection. They also can give tax advice and plan to those who need the service.
The IRS awards the EA with the highest credential available to tax preparers. The federal government considers them to be fully knowledgeable in all aspects of the tax world. If you have a question or need help finding all of your exemptions an Enrolled Agent would be the best choice in this situation.
For a tax preparer to become an Enrolled Agent, they need 5 years of tax preparation and then take the IRS Enrolled Agent Exam. This exam has a three-part comprehensive exam that includes: individual and business tax returns. Those who are successful in completing this elite status must adhere to ethical standards and must complete 72 hours of continuing education every three years.
CPA vs EA: Which one should you choose?
As you can see both are highly qualified and knowledgeable in tax preparation. Deciding which of these professionals would be the best for you would depend on what exactly you need.
If you need a professional that does your books and at the end of the year your taxes then your choice would be a CPA. However, if you need someone that can navigate the tax world and represent you when fighting an audit or collections then an enrolled agent is your choice.
I hope this gives you a little more information so that you can make the best choice for you and your business. If you have any questions please contact me at tiffini@axcel4you.com