Enrolled Agent or CPA for Tax Preparation: Should I hire an Enrolled Agent vs CPA

self-employed enrolled agent salary

You will then need a review course that will prepare you for the difficult CPA exam. The cost for sitting for the exam depends entirely on the state in which you plan to be licensed. Typically, there is a registration fee and a separate fee for each section of the exam. Even though the EA and the CPA will help you get promoted, earn a higher salary, and guide your career, it’s important to know the differences in order to make your decision. CPAs will help you to keep important records and receipts and to get your books in order to streamline business for the future. CPAs will provide financial evaluations on a regular basis and will help you to get your books and records reviewed, audited and in order for large bank loans.

self-employed enrolled agent salary

There are many career tracks to consider as you apply to work for the IRS but one of the best places to start is as an IRS Internal Revenue Agent. IRS Revenue agents are responsible for reviewing tax returns and conducting audits, as well as identifying and collecting overdue taxes. When the general public owes back taxes or has other tax problems, it is a Revenue Agent that will deal with these problems.

“Maybe the Bentley is out of your reach, but a Maserati could be a viable option if you pass the EA Exam!”

This area ensures that every tax-exempt organization and government entity is following current tax laws. The work is exacting and they offer assistance and information where needed. Your strong knowledge and skill in applying IT principles, methods and practices will allow you to excel in this position. If you wanted to become an EA, you would have to pass a three-part comprehensive examination (Individuals, Businesses and Representation, Practice, and Procedure) which covers all aspects of the tax code. Another option is to work at the IRS for five years in a position where you were interpret and apply the tax code on a regular basis. EA candidates have to pass a background check, which is conducted by the IRS.

  • In as little as four years, EAs can earn the same amount as the average CPA if they are successful in gaining clients.
  • Additionally, because enrolled agents are federally designated, they can work in any state in the country.
  • As you’ll see, each employment option for enrolled agents has its pros and cons.
  • Specialist niche – If your business simply needs somebody to prepare your tax return, prior year unfiled returns and ensure that your business taxes are in order, EAs are very useful.
  • Another way to boost your salary and solidify your expertise is to become dual-certified.
  • Your service will “pay for itself” and clients will see that and know that.

After all, they are responsible for calculating everything sent in by taxpayers or their tax preparer. If they find errors, omissions, even attempts to hide income, they will have to act on everything they find, even if the taxpayer may have made an honest mistake. They review each taxpayer’s tax returns with a virtual magnifying glass. When these auditors are auditing anyone’s taxes, they will go to that person’s state, city, business, or home looking for additional documentation that proves the taxpayer’s submitted paperwork.

The IRS is hosting hiring events for the following positions:

When it comes to jobs in accounting and finance, many people consider becoming CPAs, while few think about the option of becoming enrolled agents. With an increasing need for EAs across enrolled agent salary the nation, choosing to follow this career path can be both satisfying and lucrative. The average Enrolled Agent salary in the U.S. is $52,645 according to Payscale Opens in new window.

  • Without the EA you may find yourself referring customers over to individuals that do not always have your clients in as high a regard as you might.
  • For smaller, medium-sized businesses looking to keep things simple, compliant, though, EAs could be better.
  • On the other hand, a small company that specializes in complex tax situations would really benefit from having one or two EAs on staff.
  • An enrolled agent can find ways to sustain a workload throughout the year by working for businesses, keeping books, and filing quarterly estimated taxes and amended returns, for example.
  • Circular 230, published by the US Treasury Department outlines the rules for enrolled agents to practice in front of the IRS.
  • It should be noted that the IRS looks at education but will also take experience, licensure and credentials into account when evaluating new candidates.

Every revenue agent is required to complete an accounting degree as students at a four-year university. These courses are supposed to include upper-level classwork that every junior and senior takes before graduating. As an IRS CI Special Agent, you will combine your accounting skills with law enforcement skills to investigate financial crimes. Because of the expertise required to conduct these complex financial investigations, IRS Special Agents are considered the premier financial investigators for the Federal Government. You will become familiar with the client, observing indications of hardship or business failure, and assessing their ability to pay outstanding taxes. Your goal is to resolve all delinquencies with a clear course of action.

What Do Enrolled Agents Do?

Requirements can vary from state to state, but typically CPAs must have completed studies in accounting at university or college. They also must meet certain ethical and educational and academic requirements in order to do what they do. Basically, a CPA, or a Certified Public Accountant will undergo 150 undergraduate hours and will need to pass a 4-part CPA exam. CPAs, on the other hand, are public accountants who file reports with the Securities and Exchange Commission (SEC). There is no national certification for CPAs, so they must be certified in each state in which they intend to work.

self-employed enrolled agent salary

If you are a strong tax preparer with good skills and experience, there is no reason you cannot, over time, make approximately $35,000-$40,000 per tax season. Of course you can make much more and you can make much less, but that $37K figure is a https://www.bookstime.com/articles/payroll-accounting pretty decent ballpark estimate for a skilled and experienced tax preparer’s earnings. As of 2016, the job outlook for a revenue agent, tax examiner, collector, or other tax professional should show insignificant change between 2016 and 2026.