EAs only need to pass the SEE, while CPAs need to pass the Uniform CPA Examination and complete educational and professional requirements set by their state. Attorneys and certified public accountants automatically become tax preparers with unlimited representation rights upon receiving licensure from their state. Enrolled agents, licensed by the IRS, can also be tax preparers. Accountants and taxes Accounting professionals typically have substantial education and background in accounting. In order to become a certified public accountant, a professional must take an exam that includes a wide range of accounting skills.
Understanding tax return preparer credentials and qualifications
CPAs are best for broader accounting needs and identifying credits and deductions to increase your tax refund or lower your tax bill. If you’re interested in professional help with your taxes, you might be wondering what types of specialists there are and which one you need. An enrolled agent and a certified public accountant are both tax experts, but when you should work with an EA vs CPA differs based on your needs. Accredited education (150 hours and a bachelor’s degree in accounting and/or other business-related subjects), pass a four-part exam, and gain enough experience in the accounting field.
Educational Requirements
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- They can only represent clients for whom they’ve prepared and signed tax returns, and only in front of revenue agents, customer service representatives, and similar IRS employees.
- A CPA is a full-service financial professional, and is generally the right choice for someone who wants accounting help year-round or who would benefit from making good tax choices in advance of filing.
- For smaller companies with straightforward taxes, using a tax preparer is a way to save money and get your tax returns completed on time.
- More likely, if you have complicated finances that you understand most of the time, a tax preparer might be the right choice.
- With tax season underway in the United States, millions of businesses—and even more individuals—will need to properly file their taxes with the Internal Revenue Service (IRS).
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The preparation required of CPAs reflects their broader range of expertise. CPAs must obtain a bachelor’s degree with a focus on accounting, pass the CPA exam, meet thresholds for experience and character, abide by a standard of ethics and also commit to continuing education every year. Their work experience might suit them to a specific kind of client—on individuals, small businesses, large corporations, or even non-profits—or a specific industry.
Apart from attorney bar exams, the two available tax preparer exams are the SEE for enrolled agents and the CPA exam for CPAs. Note that most states do not specifically require CPAs to hold accounting degrees. Instead, they must meet detailed educational requirements that cover intermediate and advanced accounting concepts.
- Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
- Enrolled agent (EA) status is the highest credential awarded by the IRS.
- Many people and private businesses choose to pay licensed tax preparers to represent them before the IRS.
- Once the exam is passed, the accountant applies to their individual state for licensure.
- A tax preparer is generally the right choice for you if you have questions specifically about preparing or filing your taxes.
Tax attorneys must complete law school and pass a rigorous examination issued by a state-level bar association. They can satisfy educational requirements with either a juris doctor (JD) or master of laws (LLM) degree. Note that many LLM programs restrict admissions to applicants who already hold JDs. Like CPAs, enrolled agents (EAs) are entitled to unrestricted taxpayer representation. Unlike CPAs, EAs’ expertise is limited to tax matters, making them extremely well versed in their specialty.
Working with an EA
They’re also a great option if you need tax preparation and planning advice for an individual or business. A tax preparer is anyone who is authorized to prepare federal tax returns. Enrolled agents are tax preparer vs cpa eligible to represent taxpayers before the IRS. To become an EA, you have to pass a three-part IRS test covering individual and business tax returns or you have to have experience as an IRS employee.
However, the RTRP credential does not necessarily indicate that the professional holding it can provide representation before the IRS. They can only represent clients for whom they’ve prepared and signed tax returns, and only in front of revenue agents, customer service representatives, and similar IRS employees. They’re also barred from representing clients on matters of appeals or collection issues. Individuals looking to work as tax professionals can either become a CPA or an enrolled agent.
When your finances raise complicated issue on an ongoing basis, a CPA is often the right choice to stay on top of that. For a list of each state’s full requirements, see the AICPA’s website. For help with both taxes and other financial considerations, consider working with a financial advisor. Get unlimited advice, an expert final review and your maximum refund, guaranteed. To become an EA, candidates must pass a three-part test, apply to the IRS, and pass a background check. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
What Are Certified Tax Preparer Exams?
You’ll also want to take steps to protect yourself if you begin to suspect that the tax prepare you’ve chosen is disreputable. In particular, the IRS warns that those who base fees on a percentage of clients’ refunds should be avoided, and checking with the Better Business Bureau is a smart move. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.