If you are interested in a career in finance, you might wonder: should you become a certified public accountant or an enrolled agent? Both jobs entail many similarities, differences, and entirely different paths to get there. If you are struggling to choose between either of these careers, here are a few pros and cons of becoming a CPA or EA.
Enrolled Agent (EA)
- Enrolled Agents Are Not Required to Have a Degree. Yes, you heard that right. Enrolled agents have the privilege of not having to have a college degree. However, although Enrolled Agents do not need to have a college level education, they are still required to have extensive tax law knowledge.In order to prove this, you must follow one of two options: work for the IRS in a tax-related capacity for five years, or take a comprehensive exam, called the Special Enrollment Examination (or SEE). If you take the SEE, you will need to put in as much studying as possible to be well prepared for the exam. The exam consists of three parts, which all pertain to entirely different aspects of tax law.These parts are 1) Tax law regarding individuals, 2) Tax law regarding business, and 3) Representation, reviews, and procedures. There are many materials available to study from, but the best EA review courses include mock exams and various resources.
- No Representation Limitations. Enrolled agents, certified public accountants, and licensed attorneys are the only positions allowed by federal law to represent taxpayers without any limitation. This is one of your biggest advantages of becoming an Enrolled Agent versus a non-certified accountant.This allows you a higher annual salary as well as more stable job security, as more people may seek your professional services to represent them in court. If you are interested not simply in organizing someone’s taxes but also applying tax law in person in real time, this may be a thrilling route for you.
- Diverse Career Opportunities. As an enrolled agent, you are not simply restricted to court proceedings. If you would like to one day open your own tax practice, your designation as an enrolled agent will rank you a high in the competition amongst your peers. Because the IRS deems an enrolled agent as elite status, you will always be in demand.Employers will see your status as an enrolled agent and automatically know that you hold extensive knowledge on tax related laws and issues. They will know that you are able to organize and account for someone’s taxes, can consult on estate and gift taxes, help companies with their employment taxes, advise taxpayer’s on their retirement planning, and much more.
Certified Public Accountant (CPA)
- Degree Required, and More. Certified public accountants are expected to be highly knowledgeable in all areas of accounting, finance management, and consulting. This requires at least a bachelor’s degree, and many go on to gain a master’s in finance or an MBA afterward. Certified public accountants must have a broader knowledge of finance than do enrolled agents, and thus their schooling is much more difficult and intense.Competitiveness on college campuses is extremely high, as students have to fight the grading curve and compete with each other to obtain the best internships. You must also pass the CPA exam, which is an exceptionally difficult exam in which about half of all people fail, especially on their first try. People who pass the exam will usually put in hundreds, if not over a thousand hours of studying to complete all three parts.
- Broader Job Prospects. With such extensive education, it is no wonder that their job prospects are broader. CPAs can become accounting experts in forensics, the environment, research, IT, international accounting, and so much more. In addition, certified public accountants still have unlimited rights granted to them before the IRS to represent taxpayers.Those looking for diverse career opportunities may find this certification gives them just that. Despite this, there are many certified public accountants that will work together with enrolled agents as a team at a law firm.
- Higher Salary. Certified public accountants can make a considerable CPA salary, depending on their position and experience. It is even possible to make it into the triple digits. This is less common with enrolled agents, who tend to make less than their CPA counterparts.