EA VS CPA

Both CPAs and EAs are licensed professionals who can help individuals and businesses with tax-related matters. However, there are some significant differences between these two designations.

Certified Public Accountants (CPAs)

CPAs are licensed by state boards of accountancy and are authorized to practice accounting in the state where they are licensed. In addition to tax-related matters, CPAs can also provide a range of financial services, including auditing, financial planning, and consulting.

Enrolled Agents (EAs)

Enrolled Agents (EAs) are licensed by the Internal Revenue Service (IRS) and can represent taxpayers before the IRS. EAs are authorized to prepare tax returns and provide tax planning advice. They can also help resolve tax-related issues, such as audits and collections.

Let us have a look at the differences between them through different criteria:

Course duration:

To become an EA, you need to pass a three-part exam, which covers individual and business tax returns as well as representation before the IRS. The exam is administered by the IRS and is available year-round. You can choose to study for the exam on your own or enroll in an EA course. The total duration of the EA exam preparation can vary from a few months to a year, depending on how much time you can dedicate to studying.

To become a CPA, you need to meet specific educational requirements, which typically include a bachelor’s degree in accounting or a related field and completing additional coursework in accounting and business. You also need to pass the Uniform CPA Exam, which is a four-part exam that covers auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation. The total duration of CPA exam preparation can vary from 6 months to 2 years, depending on the candidate’s pace and course duration.

Exam structure:

The EA exam consists of three parts, which are taken separately. Each part includes 100 multiple-choice questions, and you have three and a half hours to complete the exam.

The CPA exam consists of four parts, which are also taken separately. Each part includes a combination of multiple-choice questions, task-based simulations, and written communication tasks. The length and structure of the exam vary by part, but the total exam duration is 16 hours.

Job Role or Specialization:

EAs are tax specialists who are authorized to represent taxpayers before the IRS. They can prepare tax returns, advise on tax planning, and help resolve tax-related issues, such as audits and collections. EAs may work for themselves, as independent contractors, or as part of a larger accounting firm.

CPAs, on the other hand, have a broader range of job roles and specializations. They can provide a range of financial services, including auditing, financial planning, and consulting. CPAs may work in public accounting firms, government agencies, non-profit organizations, or private industries.

Salary:

The salary of an EA or CPA can vary depending on factors such as experience, location, and industry. However, generally speaking, CPAs tend to earn more than EAs. Generally, the average annual wage for Enrolled Agents is around Rs 4,00,000 to 6,00,000 and for CPAs, it is Rs 7,00,000 to 10,00,000.

In summary, both CPAs and EAs are qualified professionals who can help individuals and businesses navigate tax-related matters. However, the scope of their services and the requirements for licensure differ. When seeking assistance with tax matters, it is important to choose the professional who best meets your specific needs.