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Enrolled Agent vs CPA: Which is Better?

Both the EA and the CPA can help you advance in your careers as a tax professional. But which is the best one to choose?

The Biggest Difference Between a CPA and an EA

The EA and CPA are both credentialed; however, one is regulated on the state level and the other on the federal level. You must complete a minimum of 120 undergraduate hours and pass the AICPA administered CPA exam, consisting of four parts: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation, to become a CPA. Taxation is covered under Regulation. CPAs are licensed at the state level, thus limiting their scope of practice within those states; it is, however, possible to gain reciprocity in certain exceptional situations. Both CPAs and EAs must maintain stringent ethical standards. 

 

An EA is a federally-licensed tax practitioner with unlimited rights to represent taxpayers before the IRS. In order for you to become an EA, you have to pass a three-part comprehensive examination (Individuals, Businesses and Representation, Practice, and Procedure), covering all aspects of the tax code or you must have worked at the IRS for five years in a position where it was required of you as part of your job to interpret and apply the tax code on an ongoing basis. All EA candidates must pass a background-check that is conducted by the IRS and includes looking into your personal tax history. However, to represent a client before the IRS, a CPA also has similar privileges.

CPA vs. EA: Time Requirement Differences

It will take about 8-9 years for you to become a CPA keeping in mind the requirement of college credit hours before you can sit for the CPA exam, the requirement of having worked under the direct supervision of a CPA before the exam, and the extremely low pass rates.

It takes way less time to become an EA. Pass the three-part exam administered by the IRS then apply for the license. You could also be exempt from taking the exam if you have a certain employment history with the IRS.

CPA vs. EA: Estimated Costs

The cost of sitting for the exam depends entirely on the state in which you plan to be licensed. There is typically a registration fee and a separate fee for each section of the exam. If you must, you can also subscribe to a review course to help you prepare which will incur additional costs.

The license itself will amount to about $150, and to maintain the license, you will have to take ongoing continuing education (CE) courses. CE requirements differ from state to state and are cyclical. If you are lucky, your employers will pay for the cost of CPE or licensure.

The process for EA candidates is different and a lot simpler. First, they must obtain a PTIN (Personal Tax Identification Number) from the IRS, which costs $50. The cost of each exam section is $111.94. There is a $30 enrollment fee after you’ve passed the exam, therefore, bringing the total cost to $415.82. Enrolled agents must also take CE courses periodically.

CPA vs EA: Career Path Differences

You will specialize in tax issues as an enrolled agent. This will include preparation of taxes for individuals and business entities, as well as advising clients. You will find plentiful job opportunities at tax preparation franchises or work for a CPA.

CPAs, on the other hand, have way more job opportunities at hand. CPAs can work in the private-sector, for the government, for individuals, for non-profits or be self employed. 

CPA vs EA: Salary Differences

On an average, CPAs earn more than EAs. But salaries vary depending on where you are on the career continuum.  

Conclusion:

Hope this article is helpful to you while making a career decision. If you have any queries, feel free to comment in the section below. Happy Learning!

Simandhar Education:

Simandhar is the official partner of Becker and AICPA - Largest Training provider for USA CPA, USA CMA, IFRS and EA courses in India with offices in Bangalore, Hyderabad, Delhi, Ahmedabad, Gurgaon, Kerala, Cochin (Kochi), Trivandrum, Kottayam, Kozhikode, Malappuram, Chennai, and Mumbai.

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