Enrolled Agent vs. CPA – Which Makes More Sense for Your Business?
Saturday, March 4th, 2023
When tax season comes around, it is time for the yearly grind of tax preparation for your business. Few things have the potential to be so time-consuming, frustrating, and problematic. The IRS has the power to levy serious penalties that can severely affect the finances of your business. It is just a smart move to hire a tax expert for SMBs to help you navigate the complexities of the tax code and the filing process. If you search for tax preparers near me, you will find both certified public accountants and federally licensed Enrolled Agents, but which is best for your business? In this article, we will look at the differences between them and help you figure out which is best for your business.
Who is a Certified Public Accountant?
There are a number of requirements that it takes for someone to become a Certified Public Accountant. They must have a bachelor’s degree in business, finance, or accounting. It is also mandatory that a CPA candidate have a minimum of two years of accounting experience and finish 150 hours of education. Passing the Uniform CPA Exam is the final hurdle to becoming a Certified Public Accountant. Then they must be licensed by the Board of Accountancy for their state.
Who are Enrolled Agents?
To begin with, a Federally Licensed Enrolled Agent (often abbreviated to EA) is a highly trained specialist in tax issues. In order to become an Enrolled Agent, a tax professional must either complete at least five years of employment with the IRS or successfully pass a complex exam administered by the IRS. Being given the designation of Enrolled Agent is the most distinguished credential granted by the IRS. An EA is an expert in a wide range of tax topics, including tax planning, IRS representation, 1040, and much more. That expertise means that they usually earn $15,000 to $20,000 more a year than a CPA.
Which of the Tax Preparers near me should I Hire?
When you hire a tax expert for SMBs, you will want to take a few things into consideration. Both a Certified Public Accountant and a federally licensed Enrolled Agent can be a lot of help to your business. Both are highly trained, but there are differences that you should keep in mind. Because of the direct experience that an Enrolled Agent has with the IRS and their specialization in tax law, they can be enormously helpful in getting business taxes in order. Their title also lends weight to their representation of your company.
EA or CPA: Which Will You Choose?
A Certified Public Accountant, on the other hand, is a great choice for helping your business with bookkeeping, both in organizing and maintaining your books. They are also useful for business advice and help you manage your business’ assets. They often offer a wider range of services than an EA and often charge less. A CPA can, of course, also help you with taxes and represent you before the IRS. Whether you choose an EA or a CPA for your business will depend on your specific needs and which has the special skills to address them.
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Tags: accounting, Enrolled Agents, tax planning