What is the Difference between an EA, a CPA, and an Accountant?
Between keeping track of your finances, preparing for tax season and understanding your obligation to the IRS, one can easily find themselves overwhelmed. With the different types of tax professionals out there, it can make the process of choosing an accountant even more confusing.
I’m sure you’ve heard of professional financial titles, such as EA, CPA, or Accountant, but what exactly are they? What do they do? And how can they help you when faced with confusing tax compliance issues? Below we discuss the differences between these experts and how they can make the financial world a little less complicated.
An Enrolled Agent, or EA, is a type of tax professional who focuses solely on managing tax arrangements for businesses or private entities. EA’s are considered tax specialists and recognized as such by the federal government. They have a vast knowledge of tax-related subjects such as income, estate, gift, payroll, levies, returns, inheritance, non-profits and retirement taxes.
A Typical responsibility of an Enrolled Agent includes representing his or her clients, be it a business or an individual, before the IRS on issues of audits, appeals or tax collection. An EA is the highest credential the IRS awards.
Certified Public Accountants
Differing from an EA, a Certified Public Accountant (CPA), has more flexibility and a wider range of services than an EA. States approve CPA’s while the federal government approves EA’s. CPA’s typically do most of their work for accounting firms of all sizes, and they don’t specialize in any one area of accounting. They can assist as advisors and consultants for all accounting, tax and financial services for businesses, individuals and other organizations.
CPA’s help their clients set and achieve their financial goals through wise budgeting and financial planning. These aspirations can be anything from a down payment on a home to opening a new branch of a business across the country. Because of their wide range of abilities, CPA’s are typically the go-to candidates when looking for a broader scope of expertise.
An accountant is a financial professional who performs functions such as audits or financial statement analyses for companies, organizations, or individuals. Accountants can either be employed with an accounting firm or at a large company with an accounting department, or they can set up an individual practice.
While accounting positions may fall under numerous categories such as public, management, forensic, government, or even sports, most accountants perform a common core of duties. Some of these tasks often include bookkeeping, tax preparation, auditing, and general administrative work.
If you or a loved one require sound financial guidance, we encourage you to call us today! Our licensed CPA is happy to answer any questions you may have!