Imagine the scenario whether you may or may not be a commerce or law graduate, you may or may not have experience in tax return preparation but you want to explore the tax return preparation industry with a zeal to heighten your career in this arena. What should you do? The answer is ‘blowin in the wind’-go for an Enrolled Agent (EA) course and get the EA license in 6-9 months.
What is an EA? EA is an authorized expert by the federal government who can prepare and present all tax-related documents and represent before the Internal Revenue Service (IRS) on behalf of any client from individuals to corporate.
Reasons to become an EA
Unlimited Representation before the IRS
The IRS permits EAs to represent a taxpayer without limitations. By fulfilling the required formalities an EA can be present in the IRS National Database. This helps to handle any type of tax matter (even audits, collections, and appeals), represent clients before any IRS office, and represent any taxpayer in any state in a hassle-free manner
Argue tax law
On behalf of the taxpayer, an EA can disagree with the IRS on a tax return either prepared or not prepared by him/her or anyone which a non-EA tax preparer cannot do.
Argue Audit
An EA can talk with the IRS in an audit on a tax return he/she prepared or prepared by anyone else and can talk with the IRS collections office which is not permitted for a non-EA tax return preparer.
Handling appeals
A licensed EA can handle any kind of tax-related appeal to the IRS not permitted for a non-EA tax return preparer.
Universal Acceptance
The Department of Treasury regulates the EA designation with an IRS stamp, so all 50 states recognize and respect it. The EA’s universal acceptance and esteem stand makes the credential unique and in sharp contrast with the CPA license which is granted by the individual state board of accountancy thus making the CPA taxation practice in limit.
Earning Potential
On average, EAs earn about 10% more per return than an unenrolled tax preparer. For example, at entry-level, an EA with up to 5 years’ experience, can get an average salary of $42,000, at mid-career (5-10 years) it is approximately $50,000 and at a later stage (10-20 years, it can be more than $55,000 respectively. Mind it, you do not have to possess any academic qualification to obtain it.
Job Security
EA credential gives you recession-proof job security. If taxes are there even in a recession laden country, EAs are there to serve. Therefore, demand for EA is indefinite and increasing fast in developing and developed countries at a greater pace.
Low Cost
In comparison to other accounting courses, EA costs are lower. For this, one must pay for a PTIN number ($30.75), pay at least $609 ($203 per part) in exam fees, and a $140 enrollment fee post exam brings your EA expenses to under $800. That total is considerably much lower than what you would spend on other accounting certifications.
Flexibility
EAs are in high demand, which means you will have a lot of flexibility when it comes to finding a job. You can work for yourself or a firm. You can also choose to work part-time or full-time which is great for prioritizing work/life balance.
Work from home
You can usually work from home as an EA if that is your preference. Remote working is great for taking care of families while managing jobs. You will be able to set your own hours, and you will not have to commute.
Abridgement
Among so many reasons to be an EA, few are cited here. Employees considering a career change can take an ambitious leap to become an EA. For others wanting to increase their earnings or knowledge about tax law can pursue EA from a reputed institution. Since EAs are upskilled to handle more complicated returns, they possess the calibre to do more things for their clients which increases the earning potential of EAs accordingly.
Therefore, if certain obstacles prevent you from earning the CPA, but you plan to specialize in tax, you can get the EA license and be just as capable in the domain. So, why wait? Get your dose of motivation to become a highly-paid EA.
An Enrolled Agent (EA) is a skilled tax professional licensed by the federal government Of USA under the umbrella of Internal Revenue Services (IRS). EAs can handle and represent all tax related issues on behalf of an individual or a corporate in any US state or across the globe which comes under the purview of IRS regulated taxation. Moreover, EAs have unlimited practice right across the US territories.
However, to be an EA, one has to pass the 3-part EA exam more classically known as the Special Enrollment examination (SEE). This online exam is conducted by the IRS through Prometric centers located all over the globe in most of the countries. Since, the major criterion for EAs to clear the SEE, here we will discuss certain strategies which can help the aspirants to clear the exam at first attempt.
Know the Exam-the Exam Window
After registration with the IRS, you have 2 years to pass all three parts of the EA exam, however, this year it has been extended to 3 years due to covid situation. Each year, the exam window remains open throughout the year except the March-April months for incorporation of tax changes/reforms/amendments, if any.
(Source: Gleim)
Know the Exam- the Structure
The exam consists of the following three parts:
1. Part 1 – Individuals
2. Part 2 – Businesses
3. Part 3 – Representation, Practice, and Procedure
Each part consists of 100 multiple-choice questions (MCQs). The duration of each part is 3.5 hours, with an additional 30 min provided for a computer pre tutorial and post exam survey. The exam score provides a grade of 40-130 on which one has to get a grade of 105 to pass each part of the exam. Each part of the exam can be taken separately and on different dates. The MCQs follow 3 distinct patterns- the question stem or body, choose the best answer from the options and the distractors.
Know the Exam-the MCQs
1. Direct Questions
Here you will get a straightforward question with 4 options from which you have to select the correct one.
2. Incomplete Sentences
In this section, you have to pick up the correct answer from the given options which makes the sentence complete most appropriately.
3. Negative Questions
Here comes the distractors like all of the following EXCEPT or NOT words are part and parcel of the question stem. Therefore, close attention is needed when you find these kinds of words in the question itself.
Write the Exam- Tips to Tackle MCQs
1. Careful Reading of the Question Stem
This is the most important part before looking into the options. By doing this, you can figure out the precise part which has been asked specifically.
2. Selection of Answer by Elimination
Use elimination process for selecting/guessing the correct answer. Eliminating one distractor from 4 options will increase your credibility to tick the right one.
3. Use of Educated Guess
Since there are no negative marking for wrong answers, narrow down the options and make your decision on the remaining options which appear most logical upon educated guessing. Answer every question.
4. Time Management
Since the actual exam time is 3.5 hours, there is no need to hurry. Read the questions carefully and take an average of 1.5 minutes to answer each question. In this process, you can flag the questions which require guessing to take it later.
Relevant IRS Publications for Each Part (Free Resources)
Part 1: Individual- Form W-12 and Publication 17.
Part 2: Business– Publication 15 (Circular E).
Part 3: Representation, Practices and Procedures- Circular 230 and EA exam study materials provided by the IRS.
Know the Exam-The Average Study Time
Preamble to begin your studies, create a plan on study schedule and strategy. Creating a study schedule will help to build your consistency, and implementing a study strategy will make your study sessions more effective as well as productive. An average study plan for each part of the EA exam is given below as a guideline which can be customized according to the need and compliance. Here you can see that part 2 requires more study time than other parts because of its depth and diversity.
Average Study Time for Each Part of The EA Exam
Part 1
85 hours
Part 2
125 hours
Part 3
55 hours
(Source-Gleim)
Summary
It is evident that with a dedicated study plan, strategy and a positive attitude, you can effectively clear all parts of the EA exam (SEE) by a maximum span of 6 months. In this journey, you need good review materials and mentoring support. Practicing MCQs in real type format along with the mock tests will increase your confidence to take the test. All these supports are available with Uplift Professionals in an affordable and user friendly manner. Above tips will be the icing on the cake for the actual EA exam. Hope for the best. Happy EA journey.
As of now, a career that emerged in 1884 as a result of civil war loss claim has successfully sailed the calm and rough seas to become today’s Enrolled Agent (EA). An Enrolled Agent (EA) is an upskilled tax specialist who deals with US tax laws and applications in and outside the USA. EAs are entitled to tackle all US tax-related issues of an individual as well as business/corporate entities, trusts, NGOs, etc. that comes under the Internal Revenue Services (IRS) as a whole which includes tax return preparation to represent the client in front of IRS in relation to any dispute or settlement.
EAs are privileged because the IRS empowers them with special tools that make them much better equipped with knowledge and skills than non-EA tax preparers. As a result, EA is the top credential under the IRS umbrella, making it prestigious in the job market. A Certified Public Accountant (CPA) can also handle the same tax-related issues, but they have a broader horizon than the specific niche of EAs.
The EA credential involves successful clearance of a 3-part Special Enrollment Exam (SEE) rather than a 4-part CPA exam. The unique point in the EA journey is academic eligibility. Unlike CPA, there is no educational requirement to sit for SEE. Furthermore, the course duration is much shorter than a CPA course and is considered easier to pass. Lastly, a CPA has a state license, while an EA gets a federal license and can practice anywhere in the country and represent clients from any state.
Hence, anyone focusing on the IRS-governed US tax domain rather than public accounting should opt for an EA credential rather than a CPA. Moreover, EAs can work part-time or full-time as practicing status. It has to be noted that besides an attorney or a CPA, only EAs are authorized to plead and represent taxpayers before the IRS for tax-related issues.
The Job Security
As we all know, irrespective of the state of the economy, be it stable, inflation, or recession, taxes are there to stay with various reforms with increasing numbers of taxpayers. In this scenario, one can interpret the importance of an EA with continuous professional education (CPE). Thus, EA appears as a future-proof job type in all economic conditions of the country.
Job Sectors for EAs
Public Accounting Firm (PAF)
In this sector, EAs can play the role of tax return preparer and represent clients in front of the IRS concerning any tax-related issues. In addition, PAFs often offer higher salaries and work flexibility.
US Taxation
Many MNCs, including Big 4s as well as BPOs, KPOs, or any organization which follows US taxation and is accountable to IRS, are great places for EAs to venture. Attractive packages are offered to EAs more than an average commerce graduate.
Banking Sector
Banks under federal regulations hire EAs to review the rules and tax compliance. In return, EAs get a good salary, benefits, and job security.
Investment Firm
EAs are hired here because an EA can advise how to minimize the tax burden in various investments, including buying and selling, to maintain clients’ interests.
Law Firm
EAs find an excellent place to work in tax law firms, mainly for the representation of clients before the IRS. The packages of EAs in such organizations vary with the size of the clientele.
Own Business
Nevertheless, this option is open to every EA to start their consultancy firm where the sky would be the limit. Outsourcing for individuals and corporations, trusts, or NGOs can be highly rewarding regarding money and freedom.
Enrolled Agent (EA) – The Complete Kaleidoscope: Course, Eligibility, Syllabus, Exam Structure and Job Opportunities in India:– Want to learn more about Enrolled Angent course? Then click to learn more…. Continue reading
Adding the above to the Indian scenario, the horizon appears brighter for EAs. The advent of globalization imparted tremendous growth in various BPO and KPO sectors, where they very much follow the US taxation policy because of their US and international client base. Hence, EAs holding the top ladder of US taxation is much preferred in these sectors.
Apart from these, all Fortune 500 companies, including the Big 4s, rely on US taxation and have to file returns under the FATCA rules, which govern financial transactions with US investors and are dependable on EAs to comply with and proper financial functioning of the organization.
Professionals who help clients with taxes may benefit from becoming enrolled agents (EAs). The IRS empowers EAs with tools unavailable to most other tax preparers. These professionals can speak on clients’ behalf, argue disputes, and make cases to the federal taxation authorities. EAs can handle virtually any situation that may arise in the case of a taxpayer.
The best way to become an Enrolled Agent in one year is to pass each part of the EA exam on your first attempt. There are three exam parts you’ll have to study and sit for separately, but it doesn’t have to be as difficult as it sounds. To make becoming an EA manageable, you just need to set small, incremental goals and create a solid study plan. Being realistic about your expectations will help you make a plan you can keep. Candidates are more likely to stay on track when they regularly meet the benchmarks they set.
How to be an Enrolled Agent-Scope and Benefit for Tax Professionals: An EA is a federally authorized tax specialist that operates to provide advisory services to American taxpayers about matters concerning the IRS. Achieving “EA” status is considered the highest credential awarded by the IRS and is legally recognized throughout all U.S states…. continue reading
One of the most common questions often comes to mind: How long does it take to become an Enrolled Agent (EA)? The common reason behind this is quite understandable. Before you get too far into the process of becoming an EA, you want to know if it is worth the time, effort, and funds required. But the benefits of the EA include increased job opportunities, income, status before the IRS, and tax expertise, so I believe that the designation is very advantageous. One of the main reasons people choose to become an EA is the generous enrolled agent salary.
However, passing the EA exam (officially called the Special Enrollment Exam (SEE)) can take a good deal of time, so you need to prepare for that.
Depending on your tax knowledge, becoming an enrolled agent can take 3-8 months. You may hear some enrolled agents boast that the EA exam is easy and they passed it in just a few weeks. Yet, the reality is that most candidates are not able to pass in 1 month. You may need more than 1 month or even more than 1 year to pass. But as long as that timeline works for your lifestyle, you shouldn’t feel pressured to pass faster. You have two years* to pass all three parts of the EA exam, so while you do not technically need to pass all three in the same year, many candidates want to pass before tax season to get more clients. This means appointments to take the exam early in the year can fill up quickly.
*Note: Due to the global COVID-19 pandemic, the IRS has extended the 2-year period to 3 years, giving candidates more time to safely sit for and pass their exams.
When Can You Take the Enrolled Agent Exam?
The Enrolled Agent exam is available for candidates to take 10 out of the 12 months in a year. The testing window lasts from May 1 to February 28 of the following year. The 2 blackout months (March and April) allow the exam administrators to make any necessary adjustments to the exam. They also use this time to update the content according to the most recent tax law.
The Study Plan
The number of months your EA exam journey will last depends on how many study hours you will need. Also, the other half of the equation is how quickly you can accumulate those study hours. If you are not super familiar with the current tax code, getting ready to pass all 3 parts may take you a few hundred hours. A sample guideline is provided below.
Number of EA Exam Study Weeks
Exam Part
# Of Study Hours
10 Hours/Week
15 Hours/Week
1
80-100
8-10 weeks
6-7 weeks
2
80-100
8-10 weeks
6-7 weeks
3
60-80 hours
6-8 weeks
4-6 weeks
Total
220-280 hours
22-28 weeks
16-20 weeks
It’s a good idea to set aside regular time for studying, such as an hour before work or during your lunch break. You can try to study for the Enrolled Agent exam “during your free time,” but if you’re like most people, there just isn’t enough extra time when you’re also working or going to school. The Gleim study plan suggested devoting the following time span.
Average time spent studying per part of the EA exam
Part 1
85 hours
Part 2
125 hours
Part 3
55 hours
Based on this, one can make two types of time-based study plans as mentioned below.
Deadline -based study Plan for EA exam
If you have a firm deadline to become an EA, you may need to sacrifice other obligations to fit in enough study time to pass then you can follow the steps mentioned below.
Mark your deadline and make sure to note any obligations that may interrupt your studies, such as holidays or other life events.
Work backward from the deadline you marked. If you have weeks where three or more days are not available for studying, count them as half-weeks.
Take the total amount of hours you will need to study (see chart above) and divide it by the number of weeks you have until your exam. That will give you your study hours per week. If it seems unattainable, you’ll have to either make some scheduling sacrifices or reconsider your deadline.
These hours are included in the total time chart above, so you should aim to complete all of your review material at least one week before your exam. This is when you touch up on topics you haven’t practiced in a while or might still be struggling with.
Be sure to set a benchmark every week to check your progress against.
Example: For a nine-week plan, if you are studying 10 hours a week, and your first three weeks are full weeks, you should be at least 30% done with your studies by the end of the third week. Write “30% done” for the final day, and check your progress when you get there. If you start to fall behind (for example, by missing two benchmarks in a row), you may need to adjust your study plan.
If you are behind or think you need more time, you can reschedule your exam as long as you do so at least five days before your current exam date. Rescheduling your exam will require a $35 fee. If you know you need to reschedule and do so 30 days or more before your exam, you can reschedule for free.
Hours- based study plan for EA exam
If you only have a certain number of hours each day available to study, you should set test dates that give you enough time to hit your hours targets. It is more or less similar to above with the following parameters.
Make sure to note any important obligations that may interrupt your studies, such as holidays or other life events.
Set a realistic goal, but be serious about it. It might be easy to commit to studying for only an hour a week, but you should aim as high as you reasonably can.
Divide the total number of hours you need to study by the hours per week you can study. If you have weeks where three or more days are not available for studying, count them as half-weeks. This will give you the approximate number of weeks you will need to be ready to sit for the exam.
Sample Enrolled Agent study plan (Gleim)
Because the Enrolled Agent exam tests the previous year’s tax law, there is no better time to start studying than right after-tax season. All of that year’s tax laws are fresh in your mind, which will just help you more while studying and answering questions. Below we cover a sample plan to study for the Enrolled Agent exam using an average of 10 hours per week. Your exact plan will likely differ based on your goals and commitments.
EA Part 1
Start Date April 22
Final Review June 24
Exam Date July 1
EA Part 2
Start Date July 5
Final Review September 27
Exam Date October 4
EA Part 3
Start Date October 17
Final Review November 28
Exam Date December 5
How Long Do You Have to Pass the EA Exam?
Once you pass your first EA exam part, your credit for that section lasts for 2 years from the date you passed. Therefore, you should pass the remaining 2 sections within those 2 years to avoid losing credit for your passed section and having to take it again. However, if you don’t pass a part of the EA exam after taking it 4 times in the same testing window, you must wait until the next testing window to try for the fifth time.
Enrolled Agent (EA) – The Complete Kaleidoscope: Course, Eligibility, Syllabus, Exam Structure and Job Opportunities in India:An enrolled agent (EA) is a person who is authorized to represent taxpayers before the Internal Revenue Service (IRS) by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee…. Continue reading
What Can You Do to Pass the Enrolled Agent Exam Faster?
If you’d like to pass the EA exam as soon as possible, follow these tips:
Skip Content You Already Know
No matter which course you choose, you may be able to speed up the process by skipping the reading and moving straight into the quizzes. If your review course suggests you study an exam content area more than you think is necessary, you can try to take the shortcut by answering practice questions first. In doing so, you may find that you’re already proficient in that area. However, if you try this study strategy and score low on the practice quizzes, you should do the reading. You must have sufficient comprehension of every exam topic. So, read the book or watch the videos to refresh your understanding of the material. Then, after you’ve gone back to the basics, you can return to the MCQs.
Focus on Your Weak Areas
Only by focusing on your weak areas can you truly save time. If you ignore the troublesome topics, you risk failing an exam part, which just draws the exam process out even longer. To focus on your weak areas, take a mock test at the start of each study unit. Then, use the results of the quiz to figure out which topics need more of your attention. After that, prioritize those topics in your reading and quizzing until you’ve aced them.
Make Sacrifices with Your Time
You may be able to pass the exam within 2 years by going about your life as usual and studying for the exam in your free time. But if you want to get the exam over with so you can enjoy the EA designation ASAP, you’ll have to adjust your agenda. To pass the exam fast, you must make a study schedule. In the process, you can carve out even more weekly study time when you temporarily drop non-essential activities from your normal routine. It might not be fun, but it will be worthwhile once you’ve finished the exam and have the EA to show for it.
Pass Each Section on the First Attempt
This mandate may be easier said than done, but it’s the ideal goal for someone who feels the need to speed up their EA proceedings. To pull it off, you must
Rely on an EA review course,
Give yourself plenty of time to prepare,
Stick to a realistic but consistent study schedule, and
Use your study materials to master all of the exam content.
Remember: Passing each part, the first time can be done: it just takes dedication, hard work, and persistence.
How Long Does It Take to Get the EA License After You Pass the Exam?
After you pass all 3 parts of the Enrolled Agent exam, you must submit the Application for Enrollment, A.K.A. Form 23. You have 1 year from the time you pass your final exam part to fill out this document. You’ll also have to pay your enrollment fee to the IRS at this time.
How long does it take to become an enrolled agent after completing the exam?
Approving your application can take up to 90 days because it involves a background check. And because this final procedure can extend so long, becoming an EA can take you anywhere from 3-8 months.
Follow these steps to become an EA:
Obtain a Preparer Tax Identification Number;
Apply to take the Special Enrollment Examination (SEE);
Achieve passing scores on all 3 parts of the SEE;*
Apply for enrollment; and
Pass a suitability check, which will include tax compliance to ensure that you have filed all necessary tax returns and there are no outstanding tax liabilities; and criminal background.
Summary
The best way to become an Enrolled Agent in one year is to pass each part of the EA exam on your first attempt. There are three exam parts you’ll have to study and sit for separately, but it doesn’t have to be as difficult as it sounds. To make becoming an EA manageable, you just need to set small, incremental goals and create a solid study plan. It is advisable to do a self-evaluation check by asking the following questions to oneself.
How familiar am I with the material on the Enrolled Agent exam?
When was the last time I studied for an exam or took a tax course?
How much time do I have available to study each week?
Do I have a deadline to become an Enrolled Agent?
How long can I concentrate in one sitting?
Being realistic about your expectations will help you make a plan you can keep. Candidates are more likely to stay on track when they regularly meet the benchmarks they set. On an average, depending on experience, you should expect to invest up to 40-70 hours of total study time for each exam part.
In the field of accounting, one can get easily confused amid the sea of ellipsis. But a hard core conceptual understanding of certain accreditations is vital to look for a licensed tax professional to guide you through your financial needs intelligently. When making your decision about whom to work with, you may wonder about the differences between an enrolled agent (EA) and a Certified Public Accountant (CPA US Course).
Both CPA and EA are credentials that should uphold stringent ethics and standards. EA is regulated on the federal level and CPA US Course is regulated on the state level. As CPAs are licensed at the state level means they have limited scope of practice within those jurisdictions.
An enrolled agent and a certified public accountant are both tax experts and the work they do is often similar, but there are some differences between an EA vs CPA US Course.
To understand the difference between an EA and a CPA, you should start with the responsibilities and day-to-day work of each. Here’s an overview of both.
A. What is an EA (Enrolled Agent)?
EAs are federally authorized tax practitioners who can
1. Represent taxpayers before the IRS on matters ranging from collections to IRS audits and appeals. Additionally, they often:
2. Provide tax advice
3. File tax returns for individuals, partnerships, corporations, estates, trusts, and other entities with tax-reporting requirements
4. To become an EA, candidates must pass a three-part test, apply to the IRS, and pass a background check.
To maintain the EA designation, they must
1. Complete 72 hours of continuing education every three years.
2. Comply with ethical standards established by the Department of Treasury.
3. Many EAs are also members of the National Association of Enrolled Agents, which has even higher standards for continuing education, as well as its own Code of Ethics.
B. What is a CPA US course (Certified Public Accountant)?
CPA US Course are state-licensed accounting professionals who may be:
· Auditors
· Accountants
· Business advisors
· Corporate accountants and executives
· Tax consultants
· Forensic accountants
· Financial planners
To become a CPA, candidates must
1. Pass a four-part exam and comply with education and experience requirements. The exam is the same no matter which state it’s taken in, but every state has its own education and experience requirements. Most require at least a bachelor’s degree and at least two years of public accounting experience.
2. Each state also has its own rules for maintaining the license, but most require at least 40 hours of continuing education per year, with four of those hours covering ethics.
3. Each state’s board of accountancy, CPA society, and other regulatory agencies have ethical rules and regulations that CPAs must abide by.
4. Many CPAs are also members of the American Institute of CPAs, which has its own Code of Professional Conduct.
C. Comparison: EA Vs. CPA US course
Enrolled agents, or EAs, :- are tax preparers the IRS has authorized to represent taxpayers. Enrolled agent clients include individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements.
Certified Public Accountants, or CPAs :- are licensed accountants with the statutory privilege to sign an audit report. They can prepare financial accounts, provide audit services, and advise clients on tax matters. Normally, the clients of CPAs are businesses requiring both accounting and tax services.
The steps to becoming an EA or a CPA US Course are quite similar. The main difference between these two processes is the manner in which you fulfill the basic requirements.
C.1 The Exam Eligibility
In order to become an enrolled agent, you must either take the Special Enrollment Exam (SEE), also known as the enrolled agent (EA) exam, or have previous work experience at the IRS. While passing the exam is much easier once you’ve acquired several years of tax experience, there is no prerequisite for taking the EA exam. Therefore, you could sit for it during college if you wanted. You just need a Personal Tax Identification Number (PTIN) to schedule the exam.
In contrast, you must meet educational requirements to take the US CPA Exam. The various state boards of accountancy establish the US CPA Exam application and licensure requirements, and almost everyone expects you to have 120 credit hours of education to sit for the exam. Yes, this requirement is equivalent to a bachelor’s degree, and many state boards also prefer you have your degree in accounting.
C.2 The Exam Content
The EA exam has three parts, and most people find the first and third parts to be the easiest because some experienced tax professionals can pass these parts with minimal studying. Conversely, almost everyone must work hard to pass the second part–Businesses– so it’s naturally considered the hardest.
On the other hand, the US CPA Exam has four parts and much broader content. The section equivalent to the EA exam is Regulation (REG), and only about 70% of the REG content directly relates to the EA exam. The rest covers other topics such as business law.
Still, when we compare REG’s taxation section to the EA exam’s taxation section, we uncover quite a lot of overlap. In fact, the amount of shared content can help candidates earn both certifications at the same time. Candidates who have trouble passing REG can shift their focus to passing the EA exam and earning the EA designation. Once they’ve done so, they can use their expanded tax knowledge to return to the US CPA Exam, pass it, and get their CPA license as well.
C3. The Experience Requirement
If you pursue the enrolled agent designation via the EA exam, you don’t have to meet an experience requirement. You simply must pass the exam. You’ll receive your exam results immediately, and once you’ve passed; you can apply for enrollment. The IRS explains that processing your application may take as long as 60 days (90-120 days if you’re a former IRS employee). Also, as part of their evaluation of your enrollment application, the IRS will conduct a suitability test that includes a review of your personal tax compliance.
To complete your journey to the CPA license, once you’ve passed all four US CPA Exam sections, you must meet the experience and education requirements. The 150-hour education requirement expects you to earn an additional 30 credit hours on top of your base 120 hours (120 + 30 = 150). Satisfying the experience requirement usually involves working in an accounting position for 1-2 years. While there could be exceptions to the rule, CPA licensure generally has a much higher barrier of entry than the enrolled agent credential.
C4. The Career and Compensation
EAs usually don’t work for a firm. They have their own clients and therefore can work at home with flexible hours. Many CPAs start out in audit firms, but as they accumulate experience, they can launch their own CPA firms and have their own clients.
According to Payscale.com, enrolled agents typically make between $33K to $80K a year, while CPAs make between $49K to $115K per year. Enrolled agents also have the opportunity to earn extra money during tax season. Finally, it is to be noted that the IRS puts both EAs and CPAs on the same level.
US CPA salary in India ? In India a fresh CPA starts with a minimum salary of INR 6 Lakh annually in a Big4 or MNC. The salary increases at higher rate compared to non-certified peers. Meanwhile, a CFO can earn more than INR 1 Cr annually.
D. Value Addition
D.1 The Advantage of EAs
1. EAs are tax specialists and work on tax matters only, so they can specialize in certain areas such as tax preparation or tax resolution. The EA designation is a federal credential. Since the enrolled agent credential comes from the IRS and includes the unlimited right to practice on a federal level, EAs can work with clients who have filings all across the United States.
2. Enrolled agents are a more affordable option than tax attorneys. Usually, enrolled agents can perform the same services as a tax attorney for a much lower price. For example, enrolled agents can represent their clients in civil resolution cases.
3. Taking the EA exam is faster than taking the US CPA Exam. EA exam only has three parts, while the US CPA Exam has four.
4. The EA questions are easier, so most candidates only need a few months to pass the EA exam. the benefit of the EA exam is that the sooner you can get licensed, the sooner you and your clients can enjoy your improved status with the IRS.
D.2 The Advantage of CPAs
1. CPAs can handle both accounting and tax matters.
2. CPA’s or CPA US Course expertise mainly lies in accounting and auditing, but most can provide tax filing services as well. This combination is attractive to small businesses that need both audit and tax services, preferably from the same team.
3. CPAs can take a holistic approach for better tax planning.
4. For businesses, hiring a CPA is the more sensible option because someone who “knows the numbers” can make better tax plans.
E. EA vs. CPA
EAs and CPAs are both knowledgeable, experienced professionals who are required to maintain high ethical standards. The primary difference between an EA vs CPA US Course is that EAs specialize in taxation, and CPAs can specialize in taxation and more.
E.1 Working with an EA
If you need help with an IRS issue, such as a collection problem or an audit, then an EA might be your best bet. They’re typically adept at dealing with the IRS, and some EAs even worked as IRS agents before opening their own practices.
They’re also a great option if you need tax preparation and planning advice for an individual or business. While EAs can’t provide compiled, reviewed, or audited financial statements like most CPA’s can, they can generally perform bookkeeping work to put the business’s records into tax-basis statements that they then use to prepare a tax return.
E.2 Working with a CPA
CPAs are federally approved to represent you in all matters before the IRS. Those that specialize in tax preparation can also typically help you with tax and financial planning, accounting needs, and most other financial tasks that you might have.
Look to a CPA to identify the credits and deductions you qualify for to increase your tax refund and help lower your tax bill. Additionally, if you have broader accounting needs — for instance, your bank requires a reviewed financial statement to comply with loan covenants — then working with a CPA can be beneficial.
F. Focus, Skill and Rate Comparison:Differences Between CPA US Course & Enrolled Agent
Criteria
CPA
EA
Professional Focus
Broad accounting, tax and financial services for businesses
Taxes for businesses and individuals
Qualifications for Practice
State education requirements (usually 150 hours of undergrad); pass CPA US Course exam
Five years IRS experience; pass the EA exam
Hourly rate
Average of $30 to $500, depending on experience, rank within firm, whether CPA is a firm owner
Average of $12 to $55
G. Which one to Choose? EA vs. CPA US Course
Enrolled agents are not as well-known as CPAs, but they are as good if not better with income tax matters. The path to the CPA US Course is long and arduous but more popular. If you think this is the path for you, carry on. But if you’d like to specialize in tax matters and get on the fast track to working at home with your own clients, then set your course for the EA credential.
When deciding between an EA or a CPA US Course, you will see that both types of professionals are well-qualified. They can both deliver the financial guidance you may need for your taxes. However, which one you should consult depends largely on which issue you’re looking to resolve. As could help you work through an IRS audit or a collection problem, and they can also perform bookkeeping services that could be useful for businesses when preparing tax returns.
CPAs, however, are more adept in meeting your financial planning and accounting needs; and when it comes to tax planning, they can also help you identify tax credits and deductions to lower your tax liability.
Both types of professionals are equally qualified to perform similar tasks, but there are differences in the range of services offered. CPAs can provide a much wider scope of tax services than an EA can. What’s more, general population demand is greater for CPAs than EAs.
If you have accounting needs with a micro focus, working with an EA could be the perfect fit for you. On the other hand, if you are interested in accounting practices that have nothing to do with taxes, such as auditing, then the CPA US Course option may be best.
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