CPA vs. Enrolled Agent: Who Should I Hire for My Business?

Aug 6, 2021 | Business Basics

As a business owner, you’ve probably learned that handling your taxes isn’t always a walk in the park.

On top of your regular responsibilities, dealing with taxes often means sifting through mounds of paperwork and receipts that you keep meaning to organize…but never quite get around to.

Sure, you can put yourself through the stress of doing your taxes…on top of running a business. But just because you can do something doesn’t mean you should.

But once you’ve made the decision to hire someone to do your taxes (GO YOU!), understanding the different tax credentials and titles can be confusing. Should you hire a CPA? A tax attorney? An Enrolled Agent? Your dad’s 80-year-old accountant? Which professional is the best fit for you, personally?

This month, we’re exploring the key differences between CPAs and Enrolled Agents, the two most common professional tax designations.

Once you understand the roles of these tax pros, you’ll be better equipped to choose the best “taxpert” for you.

What is a CPA?

CPA stands for “Certified Public Accountant.” All CPAs are accountants, but not all accountants are CPAs. Most CPAs work as tax professionals and audit financial statements. To earn the title of CPA, a person must meet minimum education requirements, agree to abide by a strict code of ethics, pass a rigorous four-part exam, and agree to participate in continuing education.

What is an Enrolled Agent?

An Enrolled Agent is a federally licensed tax pro with the highest professional credential offered by the IRS. To become an EA, an individual must either pass the comprehensive SEE exam (Special Enrollment Exam) given by the IRS or gain enough experience working for the IRS directly for at least five years.

Professionals who earn this elite status from the IRS must adhere to strict ethical standards and complete 72 hours of continuing education coursework every three years.

Is One Better Than the Other?

Not really. Both certifications are viewed with equal standing in the eyes of the IRS. Both CPAs and EAs have unlimited practice rights before the IRS, which means they are free to handle any type of tax issue that may arise.

Tax Savvy Jessica is an Enrolled Agent with 12-years of experience in tax preparation. As an EA, she is equipped to handle any tax situation you can throw her way…and she’s seen a few doozies! (Ask her about the client who mistakenly classified capital contributions as income. After performing a bookkeeping audit, Jessica found the mistake and reduced the client’s tax bill from $8,700 to $1,200!)

Whether you’re nervous about staying on top of your quarterly estimates, confused about how to get your business accounts up and running, or worried about how you’d handle a potential tax audit, Jessica is ready to help.

As your Taxpert, she loves helping her clients become tax savvy business owners so they can spend less time stressing…and more time building successful businesses!

Interested in overhauling your tax strategy? Click here to get my client application form!

 

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