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Certified Public Accountant vs. Enrolled Agent - Which is Better?

So you've decided that you want to start working with an accountant, but you don't know who to choose. Some professionals are Certified Public Accountants (CPA), and others are Enrolled Agents (EA), but what does it all mean, and which is better for you? Let's go through the different requirements for each.

The CPA Exam

The CPA exam is a four-part test, with each part focused on one specific area of accounting: financial accounting for public companies, auditing, tax/law, and the business environment.

CPA Education Requirements

A CPA is required to complete, in general, five years of post-secondary education. Often times, they will complete a bachelor's degree in accounting, followed by another year of elective, non-accounting courses.

CPA Career Outlook

Once a person becomes a CPA, they are able to work in nearly any industry they'd like. Career opportunities are many since their knowledge spans many fields of accounting. However, since their expertise is so varied, they will need significantly more training and work experience than an EA to be successful in tax work.

The EA Exam

This exam is in three parts, all of which are geared towards a specific area of income taxation: individual taxes, corporate/entity taxes, and ethics & representation.

EA Education Requirements

In contrast, an EA is not required to get a degree at all. However, since most universities help with job placement upon graduation, many will often get a bachelor's degree in accounting to better their job prospects.

EA Career Outlook

The EA is a tax-specific credential, and it only attests to that person's knowledge in taxation. Due to that, job opportunities are more limited than that of a CPA, and they will not be able to work in certain fields (like auditing) without extensive training. However, EAs shine in tax work, and they are the tax industry standard.

So What Does it All Mean?

It's important to choose the professional that has the most knowledge and experience in the tax accounting field. It's common to think that a CPA is the gold standard by which every accountant should be held, but your average CPA will have less experience with and less technical knowledge of complex tax accounting issues. If you have problems with your taxes or your business' books, you really need an EA by your side.

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