Tax Career Choices: CPA vs. EA

CPA or EA for you - Complete Controller

When becoming a licensed tax professional, most consider choosing among two well-known paths – CPA (Certified Public Accountant) or EA (Enrolled Agent). Both certifications are tremendous and will assist you in getting a good job, promotions, and a reasonable income. While you might consider them the same, there is some fundamental difference between them, and you must choose the one that suits you the best.

Difference Between a CPA and an EA

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CPA – Certified Public Accountant

A Certified Public Accountant is a state-level accreditation awarded after completing 150 undergrad hours and a 4-part examination. The four main areas covered in the examination include auditing and authentication, financial accounting, business environment and concepts, and reporting and regulation. Every individual must clear all four disciplines before being awarded the certification. 

Taxation is covered under the Regulations section and is considered an essential component of the overall certification. Because the accreditation is state-level, you can only practice within a specific jurisdiction: a CPA and an EA need to keep high ethical standards.

EA – Enrolled Agent

An Enrolled Agent has a federal license, making them eligible to represent clients before the IRS. Because the IRS approves their license, they can work anywhere in the country without restrictions. They must, however, precise a comprehensive three-part examination that deals with areas like Businesses and Representation and Practice and Procedures.

Everything about taxes is covered in these subjects. You can also become an 
enrolling agent if you have worked in the IRS in a position where you had to apply the tax code as part of your job. The IRS often performs a background check on your finances and tax liabilities before granting the license.

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The Difference in Career Paths

A CPA and EA have a considerably varied career path as they are required to perform to the best of their skill set. The career choices for a Certified Public Accountant are far greater than those of an Enrolling Agent as they can work for the government, the private sector, individuals, and other organizations to manage their financial matters and tax filing. An EA, on the other hand, is a specialized professional who only deals with issues related to taxes, which results in a limited career path. However, an enrolled agent will handle tax needs better than anyone else.

The Difference in the Amount of Time

It takes around 7-8 years to become a fully functional Certified Public Agent because you are required to complete 150 credit hours before sitting for the exam. In some states, you may have to gain experience by working under a licensed CPA for a certain period. After that, you have 18 months to take the exam, which already has a meager pass percentage. Even if you do everything right and do not waste any time, it will still take around eight years to become a Certified Public Agent.

On the other hand, becoming an EA requires far less effort, as you only need to clear the three-part examination. If you have enough experience working with the IRS, you may be exempt from the examination and given the license directly. However, you must provide proof of a proficient record in handling tax-related issues.

Cubicle to Cloud virtual businessThe Difference in Salaries

Typically, a CPA would earn more than an EA. However, that entirely depends on where you fall on the career continuum. An enrolling agent with significant experience could earn more than a Certified Public Agent. However, being a CPA offers better career growth and advancement opportunities. The yearly median salary for a professional accountant is close to $62,000, while it is around $49,000 for an agent.

One drawback of being an EA is that income seems to flatten once it reaches a certain peak. There is no such limit for public accountants, and they can even become an organization’s CFO (Chief Financial Officer).

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