EA vs. CPA: What’s the Difference?
If you're interested in professional help with your taxes, you might be wondering what types of specialists there are and which one you need. An enrolled agent and a certified public accountant can both be tax experts, but when you should work with an EA vs. CPA differs based on your needs. If you’re wondering “what is an EA” or “what is a CPA,” here's an overview of both, plus answers to frequently asked questions about hiring an EA or CPA near you.
Key Takeaways
- Enrolled Agents (EAs) are federally authorized tax practitioners who can represent taxpayers before the IRS and provide tax advice and file tax returns.
- Certified Public Accountants (CPAs) are state-licensed accounting professionals who may provide tax preparation, auditing, accounting, business advising, corporate accounting, tax consulting, forensic accounting, and financial planning services.
- EAs specialize in taxation, while CPAs can specialize in taxation and more.
- The fee for having an EA or CPA near you to do your taxes can vary significantly. It depends on several factors, including the complexity of your return, your location, when you want to file your return, and more.
EAs and CPAs
When you're looking to hire a tax professional, you want someone knowledgeable — someone you can trust to get the job done and keep your personal information secure.
Two of the more common tax professionals are:
EAs and CPAs can both be tax experts, and the work they do is often similar, but there are some clear differences when you do an EA vs. CPA comparison. To understand the difference between an EA and a CPA, it’s helpful to start with the responsibilities and day-to-day work of each.
What is an EA (Enrolled Agent)?
EAs are federally authorized tax practitioners who can represent taxpayers before the IRS on a wide variety of tax matters, including collections, IRS audits, and tax appeals. They generally have no limits on who they can represent, and they can appear before any IRS office.
Additionally, EAs often:
- file tax returns for individuals, partnerships, corporations, estates, trusts, and other entities with tax-reporting requirements
- provide tax planning advice
To become an EA, candidates generally must pass a three-part test, apply for enrollment with the IRS, and pass a background check (including verification of past tax compliance). Certain IRS employees don’t have to take the exam because of their experience with the tax agency.
To maintain the EA designation, they must:
- complete 72 hours of continuing education every three years
- comply with ethical standards established by the U.S. Department of Treasury
Many EAs are also members of the National Association of Enrolled Agents, which has its own Code of Ethics.
What is a CPA (Certified Public Accountant)?
CPAs are state-licensed professionals who provide accounting, tax, financial planning, and consulting services to individuals, businesses, and other organizations. As with EAs, a licensed CPA is also authorized to represent clients before the IRS.
A CPA can support clients in a variety of ways and fill many different roles. For example, they can be a:
- tax accountant
- financial planner
- business advisor
- corporate accountant or executive
- auditor
- forensic accountant
To become a CPA, candidates must pass a four-part exam and comply with education and experience requirements. The exam is the same from state to state, but every state has its own education and experience requirements. Most states require at least a bachelor's degree and some previous public accounting experience under the supervision of a licensed CPA.
Once all the requirements are met, CPAs are licensed by their state boards of accountancy. Each state also has its own rules for maintaining the license, but most require at least 40 hours of continuing education per year.
Each state's board of accountancy also has ethical rules and regulations that CPAs must follow. In addition, a certain number of the required continuing education hours typically must cover ethics.
Many CPAs are also members of the American Institute of CPAs, which has its own Code of Professional Conduct.
When to work with an EA vs. CPA
EAs and CPAs are both knowledgeable, experienced professionals who are required to maintain high ethical standards. Both can prepare your tax return and help you identify tax credits and deductions that can increase your tax refund and/or lower your tax bill.
The primary difference between an EA and CPA is that EAs specialize in taxation, and CPAs can specialize in taxation and more. So, if you’re thinking of hiring an EA or CPA, which one will fit your needs the best? That depends on the type of services you need.
Working with an EA
If you need help with an IRS issue, such as a collection problem or a tax audit, an EA can often meet your needs. 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.
Working with a CPA
CPAs can represent you in all matters before the IRS. Those that specialize in tax preparation can typically help you with tax and financial planning, accounting needs, and most other financial tasks that you might have, too.
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.
TurboTax Tip:
If you’re primarily looking for someone to prepare your income tax return, either an EA or CPA will likely be able to meet your needs. However, as your taxes become more complex or sophisticated, a CPA might be more suitable.
EA vs. CPA Comparison Chart
Here’s a side-by-side comparison chart to help you sort out some of the similarities and differences between EAs and CPAs.
|
Enrolled Agents (EAs) |
Certified Public Accountants (CPAs) |
|
|
Professional Focus |
Taxes Only |
Taxes and/or other accounting and financial matters |
|
Tax Return Preparation |
Yes |
Yes |
|
Tax Planning |
Yes |
Yes |
|
Prepare Audited Financial Statements |
No |
Yes |
|
Represent Clients Before IRS |
Yes |
Yes |
|
College Degree Required |
No |
Yes |
|
Exam Required |
Yes |
Yes |
|
Prior Experience Required |
No (except for certain IRS employees who don’t have to take exam) |
Yes |
|
Continuing Education Required |
Yes |
Yes |
|
Ethical Standards |
Yes |
Yes |
|
Licensing Authority |
IRS |
State |
How to hire an EA or CPA
You probably have a lot of basic questions if you’re trying to compare tax professionals in your area. So, before you pick an EA or CPA, check out these common questions people have about hiring these two types of tax professionals.
Should I hire an EA or CPA near me?
There are several potential advantages to hiring a local tax professional. For example, it’s easier to communicate with someone near you. Meetings and phone calls can be scheduled without having to worry about traveling far or time zone differences.
A local EA or CPA will be more knowledgeable about your state’s particular rules and regulations. This can help ensure that you’re in compliance with state and local laws that impact your taxes and other financial activities.
An EA or CPA who is nearby might also have a network of local professionals, such as lawyers and bankers, that you can tap into if you need additional financial services.
There are other benefits of working with a local EA or CPA, too. And with TurboTax Live Full Service, you can enjoy tailored assistance from a tax expert near you who’s well suited to handle your specific needs.
How much do EAs and CPAs near me charge to file a tax return?
There’s no set answer to this question. The price you will pay depends on a number of factors. For example, expect to pay more if you have a more complicated tax situation, such as multiple W-2 forms, self-employment income, itemized deductions, capital gains and losses, or other things that will require additional work for a tax professional.
Your timing and location can impact the cost of tax preparation, too. If you’re trying to line up an EA or CPA at the peak of tax season, then you might have to pay more. Prices can also vary from one region of the country to another. Higher fees are typically found in urban areas as well.
Other factors, such as the EA or CPA’s level of experience, will also impact the amount you pay.
Generally speaking, EAs tend to charge lower fees compared to CPAs, particularly for routine tax preparation and consultation. However, CPAs might offer additional services and depth of expertise that could be worth the higher cost.
Will I pay an EA or CPA an hourly rate, flat fee, or something else?
That depends on the particular EA or CPA you choose. Some tax professionals charge by the hour. In that case, you’ll pay more for a more complex return that requires additional forms and schedules.
Others charge a flat fee per return. However, that fee will likely be based on the amount of time the tax preparer expects to spend on your return. So, as with an hourly rate, you’ll probably pay more if your tax return is more involved.
You might also run across an EA or CPA using a per-form pricing model, which is a type of flat-fee approach. With this method, there’s a set fee for each tax form or schedule required for your return. For example, there might be separate charges for Form 1040, Schedule C (for business income), Schedule E (for rental income), and other forms included in your return.
Some EAs and CPAs use a combination of these pricing methods. For example, a base flat fee for your tax return, plus additional hourly charges for any extra consultation needed.
In any event, make sure you understand the fee structure before you formally hire an EA or CPA. You should also clarify exactly what services are included in the fee. For example, does it cover your state tax return or support in the event of an audit?
To get this information, it’s a good idea to ask for an initial consultation where you can learn about an EA or CPA’s fees and other important matters about the services they offer.
How do I verify an EA or CPA’s credentials?
For your own piece of mind, you’ll want to check the credentials of an EA or CPA before making a final decision on who to hire. The good news is that it’s a relatively easy task.
To check the credentials of an EA, send an email to the IRS at epp@irs.gov. Include the EA’s:
- first and last name
- complete address (if available)
- enrolled agent number (if available)
In most cases, you’ll receive a response within 72 hours.
If you want to verify a CPA’s qualifications and credentials, check with the Board of Accountancy for the state where the CPA is located.
You can also search the IRS’s online directory of tax return preparers to find both EAs and CPAs who hold professional credentials recognized by the tax agency.
Also consider checking to see if an EA is a member of the NAEA, or if a CPA is a member of the AICPA or their state’s CPA society (such as CalCPA for California CPAs). These memberships can be a good indicator of their commitment to professional standards.
Should I ask about an EA or CPA’s experience or specialty?
Yes, experience and specialization matter when hiring an EA or CPA. Ask about their experience with situations similar to your own. For example, small business owners might seek an EA or CPA with expertise in business taxes.
Some professionals also specialize in certain areas such as real estate, investments, or international taxation. Make sure they have the expertise relevant to your needs.
Whether you want an expert to do your taxes from start to finish, or expert help while you file on your own, TurboTax has expert-backed offerings to meet your needs. With TurboTax Live Assisted, our tax experts help you complete your taxes, fix any mistakes, and explain what's next.
Or, with TurboTax Live Full Service, a local tax expert matched to your unique situation will get your taxes done 100% right - as soon as today.
Whichever plan you choose, you'll get you taxes done with 100% accuracy and your maximum refund, guaranteed.
