Enrolled Agent Vs. CPA
It is tax season, bring on the stress! This is the time of the year business owners and individuals dread. It is time to gather and organize all the tax documents need to properly file your tax return. Once you have it all together you have another looming question. Who should I pay to do my taxes? This is a great question and the answer is a CPA or an Enrolled Agent. Who are these people and what do those titles mean? Lets dig in.
CPA (Certified Public Accountant)
A CPA is a highly qualified professional who specializes in the accounting industry. Below is a basic list of what a person who becomes a CPA has completed:
College degree in accounting with a minimum of 150 credit hours(masters level).
Pass a 4 part exam that covers a wide variety of topics.
Work under another CPA for at least 2,000 hours.
As you can see, it take a long time and a lot of effort to become a CPA. To be clear not all CPA's work in the field of tax accounting. CPA has a wide field of specialties and most specialize in various areas other than tax. If you choose to use a CPA, make sure they are specialized in the type of tax and accounting practice that is relevant to your business.
Enrolled Agent (EA)
An Enrolled Agent is also a highly qualified professional that specializes in the tax accounting industry. The EA designation is earned and distributed by the IRS. Below are the requirements to become an EA:
Enroll and obtain a PTIN from the IRS.
Take a 3 part exam, each exam is 100 questions in length.
Pass the IRS suitability check.
As you can see above an enrolled agent does not have to have a college education, but it is a specific tax designation. Individuals who are EA's are specialized in income tax preparation and can represent tax payers in tax court just like CPA's and tax attorney's.
Who should you pick?
Both a CPA or EA can be more than qualified to provide tax preparation or representation. I would suggest interviewing multiple professionals, obtain references and make sure the person you choose understand and specializes in your needs.