What can a CPA do that an EA cannot, and vice versa?
Enrolled Agents typically specialize only in tax matters.  Their status allows them to represent clients before the IRS (which a CPA can also do) See the IRS site regarding Enrolled Agents Their focus is much narrower than a CPA and you would only hire them for advice or representation with tax related matters.  (e.g. you'd not hire an enrolled agent to do an external audit)  A CPA is a much broader certification, covering accounting in general, of which taxes are only a portion. A CPA may or may not specialize in tax matters, so if you have a tax related issue, especially an audit, review or appeal, you may want to query a prospective CPA as to their experience with tax matters and representing clients, appeals, etc. You would likely be better off with an EA than a CPA who eschews tax work and specializes in other things such as financial auditsOn the other hand if you have need of advice that is more generalized to accounting, audits, etc then you'd want to talk with a CPA as opposed to an EA "Although they may have some similar functions, CPAs and Enrolled Agents operate in two rather different areas of the accounting ""space."" CPAs deal with financial statements, usually of corporations. They're the people you want to go to if you are making an investment, or if you own your own business, and need statements of pretax profit and loss prepared. Although a few of them are competent in taxation, the one thing many of them are weak at is tax rules, and this is where enrolled agents come in. Enrolled agents are more concerned with personal tax liability. They can 1) calculate your income taxes, and 2) represent you in hearings with the IRS because they've taken courses with IRS agents, and are considered by them to be almost ""one of us."" Many enrolled agents are former IRS agents, actually. But they are less involved with corporate accounting, including things that might be of interest to stock holders. That's the CPA's province."
I've done my taxes using turbotax for years and they were not simple, Schedule C (self-employed), rental properties, ESPP, stock options, you name it. It's a lot of work and occasionally i did find bugs in TurboTax. ESPP were the biggest pain surprisingly. The hardest part is to get all the paperwork together and you'd have to do it when you hire an accountant anyway. That said this year i am using an accountant as i incorporated and it's a whole new area for me that i don't have time to research. Also in case of an audit i'd rather be represented by a pro. I think the chance of getting audited is smaller when a CPA prepares your return. "Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for ""stock on hand"". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or ""equity""), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset ""Stock on hand"" by $500. Debit (increase) Asset ""Accounts receivable"" by $700. Credit (increase) Income ""Sales"" by $700. Debit (increase) Expense ""Cost of goods sold"" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset ""checking account"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. If he paid with a credit card: Credit (increase) Liability ""credit card"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. When he pays off the credit card: Debit (decrease) Liability ""credit card"" by $1000. Credit (decrease) Asset ""cash"" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset ""cash"". Credit (decrease) Capital ""shareholder equity"". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it ""capital"", others call it ""equity""): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big ""one thing"". 2: Every transaction must update two or more accounts. Each update is either a ""debit"" or a ""credit"". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there." You're correct, there's always a conflict of interest in private professions whether you're a CPA, doctor or lawyer. There's always a possibility of backroom dealings.  The only true response is that governmental bodies like the SEC, IRS and otherwise affiliated private organizations like the AICPA can take away your license to practice, send you to jail, or fine you thousands of dollars and ruin your life - if you're caught.  I would personally draw a line between publicly traded corporations, amoral as you said, and public accounting. A CPA firm's responsibility is to the public even though they aren't a governmental body. Accounting records are required to do business with banks and the IRS. Without public confidence in the profession, CPA firms wouldn't exist. It's truly an incentive to do a good job and continually gain confidence. They incidentally make money along the way. how many transactions per year do you intend? Mixing the funds is an issue for the reasons stated.  But. I have a similar situation managing money for others, and the solution was a power of attorney. When I sign into my brokerage account, I see these other accounts and can trade them, but the owners get their own tax reporting. This is great! I'm not a CPA, but work in finance. As such, my course/professional work is focused more on the economic and profitability aspects of transfer pricing. As you might imagine, it tended to analyze corporate strategy decisions under various cost allocation models, which you thoroughly discuss.  I would agree with the statement that it is based on the matching principle but would like to add that transfer pricing is interesting as it falls under several fields: accounting, finance, and economics. Fundamentally it is based on the matching principal, but it's real world applications are based on all three (it's often used to determine divisional and even individual sales peoples profitability; as is the case with bank related funds transfer pricing on stuff like time deposits). In this case, the correct accounting principal allows you to, when done properly, better understand the economics, strategy, and operations of an organization.   In effect, when done correctly, it provides transparency for strategic decision making to executives. As I said, since my coursework tended to focus more on that aspect, I definitely have a natural tendency towards it.  This is an amazing explanation (esp. about interest on M&amp;A bridge loans, I get that) of the more detailed stuff! Truthfully, I'm not as familiar with it and was just trying to show more of the conceptual than nitty-gritty.   Thanks for the reply! I agree with what you said regarding not wanting to put the work in to get it.  When I was coming out of school and deciding whether or not to pursue my CPA (I went into industry (Private Accounting), not Public Accounting) my manager told me this.  What would you think of someone who went to law school and didn't take the bar? Seems ridiculous doesn't it?  Well the same, kind of, can be applied to the CPA/CA - if you have a degree in accounting... why not take the CPA exam? Do Alice and Bob have to figure out the fair market value of their services and report that as income or something? Yes, exactly that.  See Topic 420.   Note that if the computer program is for Bob's business, Bob might be able to deduct it on his taxes.  Similarly, if the remodeling is on Alice's business property, she might be able to deduct it.  There might also be other tax advantages in certain circumstances. After completing 4 years of undergrad in accounting, I was planning to complete my CA. But I haven't been able to get a job with one of the big four here in Canada. Currently working in corporate sales.  I think having a CPA/CA/CMA/CGA whatever is quite beneficial in the finance industry. Of course it's not mandatory for the most part and CFA makes a lot more sense, but it gives you a better understanding of how numbers/ratios are actually created.   If anything it will give you a leg up from other people. It certainly won't hurt to have. Do you mind me asking which firm you're with? I think the OP is getting lost in designations.  Sounds to me that what he wants is a 'financial advisor' not an 'investment advisor'.  Does he even have investments?  Does he want to be told which securities to buy?   Or is he wanting advice on overall savings, insurance, tax-shelters, retirement planning, mortgages, etc.  Which is a different set of skills - the financial advisor skill set. Accountants don't have that skill set.  They know operating business reporting, taxes and generally how to keep it healthy and growing.  They can do personal tax returns (as a favour to only the owners of the business they keep track of usually). IMO they can deal with the reporting but not the planning or optimization. But IMO the OP should just read up and learn this stuff for himself.  Accreditation mean nothing.  Eg.  the major 'planner' brand teaches factually wrong stuff about RRSPs - which are the backbone of Canadian's finances. "Here's another perspective - I work in FP&amp;A at a large Chicago bank. I originally was interested in treasury, but here it is mostly cash management/reserve requirements/etc. - not really my cup of tea. A lot of our M&amp;A activity and fundraising roles are held by former I-Bankers. It might be hard to make it into that role.    I don't have any ""Accounting Functions"" - the accounting teams do that. While I am involved in planning and forecasting, I also provide a lot of strategic analysis on projects and ad-hoc/pro-forma reporting. Here, FP&amp;A is more the voice of the financial function in strategic decision making.   One other piece of advice - see if you can talk to some people on the team and see what their day-to-day is like. If you're interested in FP&amp;A in the true sense and not accounting/GLs, try looking for a larger firm." To give you an idea, HBS will often do interviews at McKinsey offices. Accounting has nothing to do with what we're talking about and the pay grades are completely different. A partner at KPMG or PWC is going to make as much as some 5 years out in a good investment bank. Finance and accounting go together like peanut butter and jelly. Having said that, you really should (read: need [to]) determine what part of finance you're interested in, because that's the only way to give you an informed answer as to whether you should pursue a CPA / CFA / MBA.  With all of that in mind, your post -- in my opinion -- really comes across as you sounding like you don't want to put in the work to pass the CPA. If that's the case, finance is *really* not the field you want to be in.  Lastly, experience is not a substitute for having your CPA license, but rather a compliment. "In June 2016 the American Institute of CPAs sent a letter to the IRS requesting guidance on this question.   Quoting from section 4 of this letter, which is available at https://www.aicpa.org/advocacy/tax/downloadabledocuments/aicpa-comment-letter-on-notice-2014-21-virtual-currency-6-10-16.pdf If the IRS believes any property transaction rules should apply differently to virtual currency than to other types of property, taxpayers will need additional guidance in order to properly distinguish the rules and regulations. Section 4, Q&A-1 of Notice 2014-21 states that “general tax principles applicable to property transactions apply to transactions using virtual currency,” which is guidance that is generally helpful in determining the tax consequences of most virtual currency transactions. However, if there are particular factors that distinguish one virtual currency as like-kind to another virtual currency for section 1031 purposes, the IRS should clarify these details (e.g., allowing the treatment of virtual currency held for investment or business as like-kind to another virtual currency) in the form of published guidance. Similarly, taxpayers need specific guidance of special rules or statutory interpretations if the IRS determines that the installment method of section 453 is applied differently for virtual currency than for other types of property. So, at the very least, a peer-reviewed committee of CPAs finds like-kind treatment to have possible grounds for allowance.   I would disagree with calling this a ""loophole,"" however (edit: at least from the viewpoint of the taxpayer.)  At a base technological level, a virtual currency-to-virtual currency exchange consists of exchanging knowledge of one sequence of binary digits (private key) for another.  What could be more ""like-kind"" than this?" I just scanned in a single sheet summary of my last two years tax returns. It is something our CPA does for us. How would I post it? Don't worry, I marked out all the personal information.    What is says is I paid over $50K in taxes in 2015. Last year we had one of our biggest contracts put on hold, so I only paid $20K.   I won't have this years figures, because we don't submit them to our CPA until the end of the year. However, this year, we just bought out two other owners at $1.2M, which makes me a 33% owner. The contract is getting restarted (knock on wood), which all together means my personal tax liability is going to be well over $100K.   My company is a commercial company, but we work with the government, and matter of fact some of the stuff we produce was designed and developed by the government (as is many of today's modern inventions - I think you would be surprised).   So lets tackle it one at a time. Pick one of those things that commercial does better than government.   P.s. Higher taxes doesn't mean higher for you, a lot of times it means higher for guys like me or way better than me (which I am perfectly fine with, and matter of fact would support). People who use infastructure more - like large corporations - should pay more for it... "Create a meaningful goal for yourself which would distract you from impulsively spending all your money and help you to direct it towards something more meaningful. Maybe you're curious about just how little money you can live off of in one year and you're up for a challenge. Maybe you want to take a whole year off from work. A trip around the world. Or create a financial independence account, the money that is put into this account should NEVER be touched, the idea is to live off of the interest that it throws off.  I strongly suggest that you listen to the audio book ""PROSPERITY CONSCIOUSNESS"" by Fredric Lehrman. You can probably find a copy at your local library, or buy if off of amazon."