CPA vs Enrolled Agent: What Are the Differences?

Your tax return is ready to file, but you might start wondering about something. Are you filing it with the right person? What if your taxes are wrong, and you owe a ton of money to the IRS? Don’t worry because 56% of Americans don’t even know when the filing deadline is. So before handing your tax returns off to somebody, learn more about a CPA vs enrolled agent first.

While both jobs involve preparing taxes and dealing with the IRS, some essential things make them different. See below for a breakdown of the two.

What Is A CPA?

A Certified Public Accountant (CPA) is a professional accountant certified by the state. They offer many services, including financial accounting and auditing. They are required to meet educational and experience criteria determined by the state board.

What is an Enrolled Agent?

An Enrolled Agent (EA) is a federally licensed tax practitioner. They can represent their clients in all matters related to the Internal Revenue Service. Unlike CPAs, EAs are only authorized to practice tax law.

Differences Between CPA vs Enrolled Agent Qualifications

The qualifications for CPAs and Enrolled Agents differ in various ways. Generally, to become a CPA, you must have the required number of college credit hours. A CPA should pass the Uniform CPA Examination.

Enrolled Agents are licensed tax practitioners. They have passed a comprehensive three-part examination administered by the Internal Revenue Service.

Differentiating Services Offered by A CPA vs Enrolled Agent

CPAs offer a wide range of services related to financial, tax, accounting, and auditing services. Furthermore, CPAs provide estate and trust planning services and more.

CPA and enrolled agent

EAs specialize in tax compliance. They can represent taxpayers in audits and make appeals to the IRS.

Tax-Related Advantages of an Enrolled Agent vs CPA

EAs and CPAs are both highly-qualified tax advisors. However, there are significant differences between them.

CPAs are generally more expensive. They require additional college-level courses and continuing education requirements.

The federal government licenses EAs. They specialize exclusively in taxation and face fewer academic requirements.

Between these two, becoming an enrolled agent is more affordable than becoming a CPA. You can hire a CPA or an enrolled agent, depending on your needs.

In terms of benefits to taxpayers, both can represent taxpayers before the IRS. They can file returns, perform audits, and help resolve account issues.

However, an enrolled agent also has some advantages. Due to their specialized knowledge, they are more skilled at interpreting complex tax laws. Plus, they have extra access to information from the IRS and are allowed to practice in all states.

CPAs, on the other hand, must be licensed in each state in which they practice. Therefore, for certain tax-related matters, taxpayers may find more value in an Enrolled Agent’s services than in a CPA.

Which One Suits You Best: CPA vs Enrolled Agent?

CPAs and Enrolled Agents provide tax assistance, but each has its unique benefits and drawbacks. A CPA may offer additional services like bookkeeping and auditing but also require extensive education and testing.

An Enrolled Agent with more limited tax experience can provide services at a lower cost. They are an attractive option for taxpayers. So after learning the differences between a cpa vs enrolled agent, you can find which one suits you best.

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