Are you confused about whether to hire a CPA or an Enrolled Agent (EA) for your tax needs? While both are licensed tax professionals, their paths to certification and areas of expertise differ greatly. This article will help you understand the difference between the two, and how they can help you with your tax needs.
What Is an Enrolled Agent (EA) and How Do You Become One?
What Does an EA Do?
An EA is the highest credential the IRS awards, specifically licensed to handle tax-related issues. They prepare tax returns, represent taxpayers before the IRS in audits, collections, and tax appeals, and help clients navigate complex federal and state tax laws.
EAs focus solely on tax services, making them experts in tax laws, tax return filing, and dealing with IRS tax issues. Hiring an EA may be your best option if you’re facing an IRS audit or need help with federal tax matters.
Further Reading: Learn about the benefits of earning an IRS Enrolled Agent credential
What Is a Certified Public Accountant (CPA) and How Is It Different from an EA?
What Does a CPA Do?
A CPA is a licensed accounting professional who works in both tax and outside of tax services. CPAs provide tax advice, tax planning, and bookkeeping services but are also involved in broader financial areas like auditing, financial planning, and working with public accounting firms.
They are uniquely qualified to handle business accounting, budgeting, and corporate taxes. If you need someone to help clients with both tax and outside of tax matters, a CPA may be the better choice.
Further Reading: Know what to look for in a CPA
EA vs CPA: Which Is Better for Your Business Tax Needs?
When Should You Hire an EA?
You should hire an EA if your business needs expert representation before the IRS, particularly for complex tax issues like audits or tax collections. EAs are ideal for federal tax matters and are specifically licensed to handle IRS disputes, tax appeals, and compliance. Hiring an EA may be the better fit if your primary concern is dealing with the IRS and staying compliant with ever-changing federal tax laws.
When Should You Hire a CPA?
A CPA is the right choice when your business requires a wider range of financial services, such as tax preparation, auditing, and strategic tax planning. A CPA's broad expertise is invaluable if you need help with business accounting, financial planning, or corporate taxes.
CPAs are the kind of tax professionals who work on both tax return preparation and high-level financial consulting, making them a better choice if your needs extend beyond tax-related issues.
Further Reading: Maintain a strict privacy policy for any tax preparer
Key Takeaways
- Education: CPAs must pass a qualifying exam with four sections, while EAs pass a different exam focused solely on taxes.
- Scope: CPAs and EAs both handle tax matters, but CPAs offer broader financial services.
- Career Path: If you’re considering a career in accounting, understand the differences in responsibilities between CPAs and EAs.
How can Taxfyle help?
Finding an accountant to file taxes is a big decision. Luckily, you don't have to handle the search on your own.
At Taxfyle, we connect you with licensed, experienced CPAs or EAs in the US. We handle the hard part of finding the right tax professional by matching you with a Pro who has the right experience to meet your unique needs and will file your file taxes for you.
