Posts made in March, 2024

Each exam lasts 3.5 hours and contains 100 multiple-choice questions. As you weigh the two options, consider differences in salary, job function and career path. EAs help ensure clients are treated appropriately by the IRS, work out payment plans on the best possible terms, and tax preparer vs cpa ensure the IRS follows laws that protect taxpayers, Miles says. When trying to find a professional tax preparer, consumers face an alphabet soup of choices. Another main distinction, and potential downside is that CPAs can only work in the state(s) in which they are licensed.

TURBOTAX DESKTOP GUARANTEES

To become an enrolled agent, you must either take the EA exam, also known as the Special Enrollment Exam (SEE), or have previous work experience at the IRS. Passing the exam is much easier once you have several years of tax experience. In fact, you can schedule and sit for the exam as soon as you obtain a Personal Tax Identification Number (PTIN), even if you are still in college. All references on the examination are to the Internal Revenue Code, forms and publications, as amended through Dec. 31, 2023. Also, unless otherwise stated, all questions relate to the calendar year 2023. Questions that contain the term “current year” refer to calendar year 2023.

Continuing education requirements

While both EAs and CPAs are qualified to provide tax services, there are differences between the two. Both CPAs and EAs have comprehensive knowledge of the United States tax codes and can use their knowledge to represent their clients in audits, appeals and other matters with the IRS. Not only do EAs rates tend to be more affordable, they can their tax law expertise to represent clients in tax proceedings, audit hearings and appeals. The flexibility of this license means that CPAs can perform multiple important roles when they’re employed by a business, from accounting, auditing, financial planning, and tax consultation. They can also provide these services to individual or business clients. In general, CPAs tend to work for public accounting firms, but they also work independently, for large corporations, and in other settings.

Find & Evaluate Licensed Tax Professionals to Solve Your Tax Issues

To pass the exam, you’ll also need to purchase an enrolled agent course that provides study materials covering the exam content. The most popular EA course, Gleim EA Review, costs between $380 and $630, depending on your course package. However, you still must pass all four parts of the CPA Exam within a rolling 30-month period. This time period begins as soon as you pass your first exam section. At that point, you have 18 months to pass the remaining three sections.

Accordingly, you must then pass that section and any other unpassed sections within 30 months of the time you passed your second section. With such tight deadlines, relying on a CPA review course and faithfully adhering to a consistent study schedule is even more critical for achieving CPA Exam success. However, comparing the taxation section of REG to that of the EA exam reveals quite a lot https://www.bookstime.com/ of overlap. In fact, this shared content can help candidates pass both exams in time. If you start with the CPA Exam and struggle with the REG section, you can temporarily change course by passing the EA exam and earning the EA designation. Then, with your improved understanding of tax accounting, you can come back to REG, pass the CPA Exam, and, ultimately, get the CPA license as well.

• In 1972, a group of enrolled agents collaborated to form the NAEA to represent the interests of EAs and increase the professional development of its members.
• When you’re looking to hire a tax professional, you want someone knowledgeable — someone you can trust to get the job done and keep your personal information secure.
• While both can provide high-quality services, there are key differences to be aware of.
• The CPA Exam used to have a stricter timeline than the EA, with scheduling “windows” throughout the year.
• If you’re not sure where to start, TaxCure can help you find the perfect tax professional to fit your needs, based on the specific problem you’re having.

In general, CPAs earn more than EAs, and CPAs also benefit from increased earning potential as time goes on. However, enrolled agents have the opportunity to earn extra money during tax season. I have a reader who actually makes more during those few months than he usually earns for the year in retail. To finish the process of becoming a CPA after you’ve passed all four CPA Exam sections, you must acquire an additional 30 credit hours of education to fulfill the 150-hour requirement. Additionally, you must work in an accounting position for 1 to 2 years to meet the CPA work experience requirement. Scaled scores are determined by calculating the number of questions answered correctly and converting it to a scale that ranges from 40 to 130.

CPAs tend to do most of their work for large and small public accounting firms. They may work as auditors, financial planners, corporate and executive accountants, and/or tax consultants. As mentioned above, because of the flexibility of the CPA designation, these professionals can be involved in many different types of financial work. The requirements for CPA licensing are demanding, and the exact rules vary from state to state. In most cases, obtaining this designation, first of all, requires a bachelor’s degree in either accounting, finance, or business administration.

• Food or beverages, other than water, may not be brought into the testing room.
• Should the container not meet the requirements outlined, the candidate will be required to put it in their locker and will not be allowed to take it into the test room.
• There is also a continuing education component that entails taking 72 credits every three years.
• The enrolled agent profession began after fraudulent claims were submitted for Civil War losses.
• Then, with your improved understanding of tax accounting, you can come back to REG, pass the CPA Exam, and, ultimately, get the CPA license as well.

When deciding between an EA or a CPA, you will see that both types of professionals are well-qualified. They can both deliver the financial guidance you may need for your taxes. However, which one you should consult depends on which issue you want to resolve. The Special Enrollment Examination, or Enrolled Agent Exam, consists of three examinations.

• Like EAs, CPAs are also subject to ongoing educational requirements, as well as a code of ethics to ensure professional standards.
• Most people consider Part 1 (Individuals) and Part 3 (Representation, Practices, and Procedures) to be the easiest.
• However, which one you should consult depends on which issue you want to resolve.
• To become an EA, candidates must pass a three-part test, apply to the IRS, and pass a background check.
• They boast a wide range of tax knowledge in such tax related subjects such as income, estate, gift, payroll, levies, returns, credits, retirement taxes, and tax planning.

Enrolled agents: Frequently asked questions