[EA]

Hello Everyone,

I am a bit confused so maybe some member can explain it to me. In order to get CPA you need to have bachelor degree, 150 unit college credit, 30 hours of accounting etc. No such requirement exist for EA. So why bother doing all of that when you can take EA exam and be done with it? EA is 3 exam vs CPA 4 . EA is licensed by federal government so not state can ban you, or refuse to let you practice. What am I missing?

[Matt]

Hi,

1. EA can only practice tax, CPA's have many many different career choices (tax, audit, private, government, self-employed…)
2. CPA's have higher earning potential in comparison

Just search enrolled agent versus CPA, and you will get a list of articles that explain the differences, advantages, and disadvantages of each one. This will give you much more information so you can figure out what is best for you.

[turo9992000]

If you want to work in tax then an EA is ok. I work in a CPA firm and we do mostly tax and an EA designation is not really a desirable designation. It's useful for power of attorney, but client's don't know what it is and a CPA's billable rate is generally higher. After working at the firm for a couple years I was able to pass the EA exam in 3 weeks without really studying, it took me 9 months to pass the CPA exam.

[jeff]

The general public doesn’t know what an Enrolled Agent is. If you want your own tax practice, you can obviously be just an EA, but for marketing purposes and getting clients, you’re at a disadvantage.

If you want to work in public accounting, my assumption is that you’re more valuable as a CPA because you can be billed out at a higher rate without having to explain to the client that an EA knows tax too, blah blah. Obviously, there’s the whole audit side of the revenue pie that you can’t be deployed to.

Finally – in industry, where former Big 4 go and take controller/CFO type jobs, their preference will be to hire CPAs, as that’s what they are/were.

I realize some of my points are anecdotal – it’s just my personal opinion and why I would recommend the CPA if they can do it.

I will grant you that the tax portion of REG isn’t as robust as the EA exam.

[Recked]

You can have a decent career with decent earning potential with just the EA designation and experience.
Career max, and earning potential is higher for CPA, and its a more respected designation.
I can't even count the number of clients that have asked me what EA stands for.
_
If you want to run your own tax shop, and you have that grind mentality, you can easily out-earn a salaried CPA that works for someone else.
But EA vs CPA self employed, with the same drive and work ethic, the CPA will earn more, even if they are doing the exact same job, simply because the hourly rate can be more.

[EA]

Thank you for everyone reply, i really appreciate it. I read many article about EA vs CPA. My goal is to have my own tax firm and do mostly that.Maybe ultimately get admitted in to tax court being EA are eligible. It seems like with EA I will save myself 4 years of education/expense plus whatever time it will take for me to pass CPA exam plus getting needed experience to be CPA. So basically a good 5-6 years at minimum but more likely 8-10 as i will probably not be able to do school full time while working.

Regarding EA rate vs CPA, i have done some calling asking how much they would charge to do corp taxes and i been told by EA $800-850. That is around what CPA small firms been telling me as well. Not sure if it's regional that rates are similar.

[freecloud]

For me,

I feel myself related to this post. Since I'm an EA but still eager to get a CPA license. Getting CPA is just a good selling point. I also plan to start my own business mainly doing different kinds of tax returns. Thus, there is no so much difference between EA and CPA. The purpose of trying to license as CPA is to be able to answer my clients I am CPA when I have been asked.

[chandler]

EA is a lot narrower in scope- it's really only for tax professionals and carries no value outside of tax. As you pointed out, the barriers to entry are a lot lower than they are for the CPA exam. That's not to say EA's can't be qualified. That is certainly not true- some of the most experienced professionals I've met are EA's (I've also met CPA's who have never done a 1040 in their life). This combined with the fact that EA is a much less common designation (approx 53k in the US vs 665k CPAs) lends to the fact that it's not publicly known. Regarding the hourly rates, I don't suggest you take someone giving you blanket quotes over the phone as a good sample. It's not that you can't make good money as an EA, but I don't think it would be fair to compare it as an equivalent alternative.

[Jodie]

I totally agree with you all. I am an accountant as well as EA. I have my own small tax practice on aside. but every time when new clients come in or other people just met, they all asked this common question: ” You are accountant, how come you are not CPA? What is EA?”
Yes, this annoys me a great deal! Being an accountant, being an EA, having my own tax business, I should be very proud of myself. No, I am not a CPA! I cannot buy a CPA practice although it's 90% taxes – because I am not a CPA. Clients want a CPA signature, not an EA. This is reality.
So, I decide to come back for it. I know I can do it, maybe it take more time, I will be a CPA eventually and I will be truly proud of myself.

[turo9992000]

The funny thing is that the IRS auditors I have met are more impressed by the EA designation than the CPA.

[Recked]

I'll give you my real world example. Bachelor's degree with 15 years experience and EA I was billing clients $200 an hour. Add the CPA designation and now I bill clients $300 an hour. Literally the same person doing the same work, the only difference is the 3 letters. And people accept my rate, it is what it is. If you want an accountant or attorney in my area that seems to be the starting rate, and it goes up from there.
If I was just starting out from scratch with no schooling I would go the EA route in a heartbeat. But I also would not give up the CPA designation now that I have it.
If you just want to be self employed, and either build your book from scratch, or perhaps build and acquire a smaller EA practice along the way, you absolutely can be very successful.

[Author]

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