If you are interested in becoming a volunteer or being employed as an enrolled agent, you should consider the many factors involved. In this post, I will discuss some of the facets that need to be taken into account before making a choice.
Salary for enrolled agent
If you are interested in becoming an IRS Enrolled Agent (EA), you will be required to pass the EA exam. The exam consists of 200 questions and will take about 3 hours to complete. Once you pass the exam, you will be able to practice as a tax practitioner.
The salary for an enrolled agent depends on how long they have been practicing and where they are employed. The average salary is between $70,000 and $100,000 per year.
Salary for enrolled agent
What is the best way to earn more money as a tax preparer?
While many factors go into determining the salary of tax preparers, the single biggest step you can take is becoming an enrolled agent (EA). This one step will boost your average annual salary by around $7,000. This is greater than the average salary boost provided by moving across the country, changing to a larger firm, or even by gaining years of experience!
To put this into perspective, the average entry-level tax preparer makes $36,365. After several years of experience, their average salary would be $40,888. This is a smaller salary bump than the one becoming an enrolled agent can give you. This one certification can add years of experience to your resume.
How does experience affect enrolled agent salary
If you are applying to your first tax preparation job, your experience is reflected in the level of education you have and any relevant extracurricular activities (such as the IRS’s VITA program ).
The average salary for an entry-level enrolled agent is about $41,480, but it can span from $26,000 to $54,000 depending on where you live and work.
Once you get that first job, experience starts to include actual time working in the industry, your accomplishments, and so forth.
Throughout your career, your salary will naturally increase. In general, each stage of your career as an enrolled agent will see a 9.25% increase in your salary.
As with almost all professions, the complexity of an enrolled agent’s role, as well as their experience level, is going to have a great influence on expected salary. Generally, the amount of experience you have is the single most important factor when determining your salary.
What positions do enrolled agents have?
Enrolled agents are tax experts. As such, any position that requires a high-level of tax knowledge can be filled by an enrolled agent. Common positions for enrolled agents include:
Tax Preparer – Average salary of $41,871
Tax preparers work with taxpayers to complete federal and state tax returns. They may work for a business or be self-employed. This job usually involves a busy season, with the highest workload from December to mid-April.
Tax Manager – Average salary of $96,242
Tax managers handle all of the tax reporting and compliance with local, state, and federal tax laws for an organization. While this position is commonly filled by a CPA, the enrolled agent certification is a great way to secure your tax specialization.
Bookkeeper – Average salary of $41,846
Bookkeepers work with a business in order to ensure that the most economically viable and safe decisions are made in order to keep finances tight and under control. This position does not exclusively involve taxes, but having experience with tax planning can be beneficial to many bookkeepers.
Office Manager – Average salary of $46,697
Office managers oversee several ongoing projects at once. They work with staff to ensure that operations are running smoothly and must stay up-to-date on a wide variety of projects to report directly to higher-level executives. Especially in organizations that employ many tax experts, having an office manager with an expertise in tax is incredibly valuable.
How does company size affect enrolled agent salary?
The most highly specialized enrolled agent probably isn’t going to be earning as much at a smaller organization as they would at a larger one. At the same time, there exist some larger organizations that pay their entry-level enrolled agents more than smaller organizations pay experienced enrolled agents.
Large firms are willing and able to pay a premium to attract top talent. Generally speaking, the larger the company, the higher the pay for a given role, and the better defined your career path will be.
It’s difficult to give a dollar value to other forms of compensation, but it’s still important to mention here. Compensation and company culture vary wildly from employer to employer, but similarly sized organizations tend to have a few things in common:
Large Organizations
Larger firms tend to offer some benefits (e.g., gyms, cafeterias, and daycare) that smaller firms can’t reasonably fit into their budgets.
Small Organizations
Smaller firms are usually more flexible and offer greater access to management, so individuals have greater say in the perks and fringe benefits available.
It’s really a personal choice when you decide what size company you want to work for, but you need to account for benefits that can affect your quality of life.
For example, daycare can be a considerable expense for young working families, and an on-site daycare could save thousands of dollars and dozens of hours in commuting each year. At the same time, some people dislike the bureaucracy that comes with larger organizations, and they’re happier at the end of the day if they have more leeway to pursue their own ideas.
According to the 2019 Robert Half Salary Guide, hiring trends in accounting and finance continue to favor the job candidate. The guide reported that firms across industries are increasing compensation and “Skilled accounting and finance talent is in short supply, and top candidates frequently field multiple job offers.” Some companies are offering bigger bonuses, more perks, and additional vacation time in order to attract excellent candidates. This is a great time to go into accounting, and becoming an enrolled agent will help you land an even bigger starting salary than you could without it.
