Choosing the right financial professional can make a big difference in the success of your business, especially when it comes to taxes. For many small business owners, the choice often comes down to two roles: Enrolled Agent (EA) or Certified Public Accountant (CPA).
While both can help with taxes, their qualifications, services, and pricing structures differ. Here’s what you need to know to make the best decision for your business and how Remote Quality Bookkeeping fits into the picture.
What Is an Enrolled Agent?
An Enrolled Agent is a federally licensed tax expert authorized to represent taxpayers before the IRS. EAs often work with individuals and small business owners who need expert tax advice or help resolving IRS issues.
Qualifications
To become an EA, a person must either:
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Pass a comprehensive three-part exam administered by the IRS (covering individual and business tax returns), or
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Have at least five years of experience working for the IRS in a position that regularly interprets and applies tax code.
EAs are required to complete continuing education every year to maintain their license and stay current on tax law changes.
Licensing & Specialties
EAs are licensed directly by the IRS and can operate in all 50 states without needing state-specific certification. Their work is narrowly focused on:
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Tax preparation and planning
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IRS audits and appeals
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Back taxes, penalties, and payment plans
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Representing clients in IRS disputes
Limitations
Unlike CPAs, Enrolled Agents typically don’t offer broader financial services such as:
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Auditing financial statements
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Business valuation
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Financial consulting or forecasting
They are ideal for tax-related needs, but not a substitute for a full-service financial advisor.
What Is a CPA?
A Certified Public Accountant (CPA) is a state-licensed accounting professional who offers a wide range of financial services, from taxes to audits to business consulting.
Qualifications
CPAs must meet stringent requirements that usually include:
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A bachelor’s degree in accounting or finance
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150 hours of coursework (typically more than a bachelor’s degree alone provides)
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Passing the Uniform CPA Examination
- Meeting state-specific experience requirements
CPAs must also complete continuing education courses regularly to maintain an active license.
Licensing & Specialties
CPAs are licensed by state boards of accountancy, and each state has its own specific requirements for licensure. CPAs can specialize in areas such as:
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Business and individual tax preparation
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Auditing financial statements
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Financial planning and budgeting
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Business strategy and consulting
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Compliance and risk management
Limitations
While CPAs offer a wider range of services, not all CPAs specialize in tax, and they tend to charge higher fees than EAs. If your needs are strictly tax-related, a CPA may be more than you need.
Enrolled Agent vs. CPA: Key Differences at a Glance
| Category | Enrolled Agent (EA) | Certified Public Accountant (CPA) |
|---|---|---|
| Licensed By | IRS | State Board of Accountancy |
| Specialty | Tax law and IRS representation | Broader financial services including tax, audit, and advisory |
| Practice Rights | Nationwide | State-specific (can vary) |
| Typical Services | Tax prep, tax planning, audit support | Tax prep, audits, financial consulting |
| Best For | Tax-only services | Complex business needs and audits |
| Cost | Often more affordable | Typically more expensive |
When to Work With an EA vs. CPA
Both EAs and CPAs play valuable roles, but which one is right for your business depends on your needs. Here’s a breakdown to help you decide:
When to Work With an Enrolled Agent
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You need help with annual tax preparation and filing
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You want an expert in tax law to represent you in front of the IRS
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You’re facing back taxes or need to set up a payment plan
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You’re looking for a cost-effective option for tax services
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Your financial situation is relatively straightforward
When to Work With a CPA
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You need more than just tax services, such as business advisory or financial reporting
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You’re preparing for an audit or need an independent audit for compliance
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You’re applying for a loan or seeking investment and need formal financial statements
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You want strategic financial advice for long-term growth
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You’re managing a complex or rapidly growing business
How Remote Quality Bookkeeping Fits In
Whether you work with an EA or a CPA, having clean, accurate books is critical. That’s where Remote Quality Bookkeeping comes in. We provide dependable, cloud-based bookkeeping services that keep your financial data up-to-date and audit-ready, making tax season (and your life) a whole lot easier.
We also work closely with CPAs and EAs to ensure they get exactly what they need from your books. That way, you don’t waste time or money scrambling to pull reports or fix errors during tax season.
Final Thoughts
Both Enrolled Agents and CPAs have their place in a successful small business. The key is understanding your financial needs and building the right team of experts to support your goals. And no matter who prepares your taxes, your books need to be accurate—that’s where we come in.
Want to make tax time easier?
👉 Schedule a free consultation with Remote Quality Bookkeeping today.
