USA Switching specialization to taxation - Feedback Requested

[AF_User]

Background:
I passed the quiz ~25 years ago, did corporate, then went into independent ERP consulting during the dotcom days. Loved it. However, eventually even the best things change; and I'm now looking to switch my specialization to taxation because I need something that can be 100% remote (I'm very settled abroad) and my compensation needs are such that sub-six-figures would be fine. I am currently doing some heavy reading to brush up my taxation skills and thinking about getting the EA in 2020 because my resume is weak in taxation.

Questions:

1. Is getting the EA when I already have the CPA worthwhile, or will employers still see a weak taxation resume because I lack the "full-time" experience?
2. I don't mind paying dues as a Tax Accountant for a year or two to put some experience on the resume, but almost every Tax Accountant job description is looking for public accounting firm experience which I also do not have on the resume. How to overcome this chicken-egg situation?

Thanks in advance for your feedback.

P.S.: I did not post this in "Careers" because I am waaaaaaaaay past being a student.

 

[CPAinUSA]

Hello,
Your CV sounds exactly like mine! And I'm contemplating the exact same career move, for pretty much the same reasons.
Here is what I've come up with on my research:
1. The EA is worth it for the knowledge. But not for the "credential" if you already have a CPA ("why bother?") Plus, seems like the EA is only about $200 to sit for it, and less than $1,000 for a review course.
2. Your best job entry bet is to work all your contacts who are tax pros. There seems to be a lot of tax shops that just need "people", bodies to crank out returns. Plus, I'm hearing that there are so many tax shops where the CPA is retiring, etc., that there should be openings.
3. Where have you settled abroad? I'm thinking about the same thing, because California is so pricey. And my Spanish is pretty good.

 

[AF_User]

Thanks for the feedback.

I decided to be a tax minion for a year or two. International taxation focus (expats). The employer quizzes have been sobering and humbling. There's a lot of gray area and nuances about which I need to learn. I love challenges.

I built my home and established my family in Thailand since almost two decades ago. (exited when W. was elected - prescient). I love it! Lots of boomers and now gen X (my gen) are flooding the region. Land values in the provinces have gone up 10x since less than 10 years ago. 100x in the cities. Condos popping up everywhere. Chinese are financing mega infrastructure development projects all over.

Cost of living remains 1/3 average US and probably 1/5 (or better) California.

If you want to leverage your Spanish skills, try PI. I hear South America is popular, too. Those less adventurous but more risk tolerant are big on Puerto Rico.

 

[CPAinUSA]

Wow. Great story.
I have a similar impression about crossing over to Tax from Corporate. I actually "know a lot about" tax. But that is not the same as cranking out returns and dealing with tax issues 40 hours per week. So I will also spend some time on the learning curve. But I think it will be worth the investment.
My sister-in-law is from Thailand. Her and my brother are two of the very few happily married people I have seen. So, if I decide on Thailand, I'll get to meet all of my Thai in-laws.

 

[AF_User]

Yep, my trophy wife and I have been happily married 15+ years now with 2 kids.

I anticipate taxation may finally be more lucrative than alternative options for employing the credential over the next decade. The code is a bastardized abomination of the mess I remember.

I definitely think the expat population (and need for CPAs to sort things out and maintain compliance) will continue to explode. I used to go for weeks or longer before seeing another foreigner at the mall or around town. Now, foreigners are everywhere all the time. Follow the herd!

 

[CPAinUSA]

Congratulations on the happy marriage! Well done.
Yes, I am hearing all kinds of good things about tax. The TCJA of 2017 made a lot of changes, and many people need CPAs to figure it out.
I am also hearing all kinds of good things about living abroad.

 

[Drmdcpa]

I never understood why someone with a CPA would then also get an EA. I can understand if you get the EA first and then become a CPA, but not sure why the other way around.

There are plenty of paths you can take. Looking for large public accounting firms is probably the least effective. Smaller firms, local firms that specialize in helping expats, or just starting your own practice will probably be more fruitful.

If you can pass the EA exam indicates you have some tax knowledge but does not give you tax prep experience. Some people can pass exams but cannot apply the knowledge otherwise.

 

[CPAinUSA]

Each personal situation is so different . . it just depends.
I've been a CPA for 20+ years, and I've decided to get the EA credential while I am crossing over into Tax.
These are my reasons:
1. Getting the EA credential will give me "some" knowledge of tax, so I can "hit the ground jogging".
2. The EA credential will give me some credibility in the tax world. (Well, he got his EA credential, so he is at least somewhat serious.)
3. The EA credential is not that hard to get. The test is in 3 parts that each cost about $200 to take (at a local computerized test center) and require about 80 work-hours each to pass (using a prep book). I have a couple of months before tax season starts and I'm not working, so, why not?
You are 100% correct about paper credentials not guaranteeing actual skills. My conclusion is that anyone can get a degree in any subject in any American college and not have any actual skills in the subject.

 

[Drmdcpa]

I realize by your response that my last point was not well defined. I meant to indicate I believe your time would be better spent actually getting experience rather than taking the exam.

I realize a large percentage of the general population does not even know what CPA and EA mean much less how they are obtained and what their differences are. When I explain it to them, I indicate EA to CPA is as a high school diploma is to a master's degree. Not being biased but that has been my observation and is the difference in requirements.

I have seen preparers use the double designation, but their practices tend to be akin to McDonald's compared to a formal restaurant.

I also think I believed you were already living abroad. With technology and mobility of the population, it is possible to make a good living providing US tax services while not living in the US. But accept it is a fringe.

If you want solid US tax work, stay in the US. Put out a shingle or move to an area where there are jobs. My firm is growing, but finding qualified people is not easy.

 

[Tempe Tony]

Hi all. Enjoyed reading the above posts.

Wanted to ask a somewhat related question, albeit with a twist. First, a little background:

1. I'm well into my mid-life (age 51), and just received a bachelor's in accounting.
2. I have lived in Utah (metro area) since 2014. Before that lived in Phoenix from 1993 to 2014.
3. I did "entry level" accounting work for a large for-profit service company in Phoenix from about 2003 to 2013....light AP, AR, reconciliations, general ledger stuff. (Did that before gaining my bachelor's.)
4. In Utah since 2014, have changed careers to security guard, but would like to get back into accounting in some way late in 2020. I make $14 hourly as a guard.
5. May sound greedy / selfish, but I feel wages for accountants here in Utah are on the low side. 90% of local accounting job openings with "bachelor's required" mentioned [not the really high level "CPA required and 15 years experience and this ERP and this and that specialization" (yes those pay much more)] are posted with wage levels less than $19 to start. Most start at $14 or $16. With accounting being such a demand career I'm surprised at this. (In Phoenix I was making $24 hourly, and that was with NO bachelor's degree !)
6. I've had disappointing luck trying to get an accounting job recently, despite recently gaining a bachelor's degree and having 10 years basic accounting experience. I confess part of the reason is a need to turbocharge my EXCEL knowledge, and also learn Quickbooks, the latter which I have zero experience with. (EXCEL, I have over a decade experience with; I'm 100% confident that later this year I'll self-teach myself to be a solid "intermediate" user level.)


A few questions:

1. Is there a good time in a given year to test for and become an EA ? My guess is it would be best to do so sometime late in any given calendar year, that way you'll have passed the test just in time to put your fresh knowledge into practice during the busy tax season which tends to be the first half of any given calendar year.

2. How hard is the EA test ?

3. Is the EA exam a standard cost all over USA, or does the cost vary in different states?

4. After passing the EA, could I start right away and complete people's personal tax returns? I feel I wouldn't mess with doing business tax returns as a freelancer, just personal taxes, as they are not as complex as business tax returns.

5. Going along with #4 above, what other avenues of work are best ? I figure a tax prep chain (H&R, etc.) would hire me on a temp basis in a heartbeat in early January. I kinda doubt a CPA firm would hire me, as they often ONLY hire CPAs.




Again, I'm only tossing this EA idea around. Probably a 40% chance I will go for it, then would like to start gung-ho in early 2021 completing returns. Then again, maybe I'll get lucky and get hired on by some company doing accounting work....but honestly I would only any given accounting job if long-term it paid $16 or more hourly. (I make $14 hourly now as a security guard, which is less stressful due to no admin task deadlines.)

 

[Drmdcpa]

In most states you do not need an EA, CPA or other license to hang out a shingle to provide income tax services. AZ is one of the many like this. Not sure about UT, but I suspect it is similar. In fact very few states like NY and CA require at least some credential.

The reason for stating that is to indicate there is no connect between taking the EA exam and entering the accounting industry either as an employee or self employed.

As I understand the EA exam, it is not easy. Like the CPA exam, it is two days, four parts. Or at least last time I helped someone train for it, it was that way. The big difference between the two exams is the EA is solely on the Internal Revenue Code. Whereas the CPA exam is more rounded including auditing, accounting and business law.

I have been a CPA for more than 25 years. All of it including my internship has been in the tax industry. I did get involved in some attestation services for the first ten years, but that was fringe work. I do not think I could pass the EA exam without at least taking a refresher course.

I do a lot of complex and varied returns, but the Internal Revenue Code is massive. I am sure there is stuff I have not dealt with at least in a long time.

The exam costs should be reasonably the same across the country. It is a federally administered exam.

One of the nice things about the US is it is easy to start a business. So you can write ABC Tax Services on a napkin and stick it in your window. Tada you are now a tax preparer. Your success will be dictated by your SKAs.

Without the proper knowledge, yes please stay away from business returns. I am tired of cleaning up messes.

H&R Block and their kind will generally put you thru a training course that starts a few months before the end of the year so they can use you during the ensuing tax season. But you are going to have very limited, and I cannot emphasize enough the term very limited, SKAs. You will be able to do basic returns; no complex returns, and essentially no planning or other real valuable stuff. I refer to them as the fast-food preparers.

CPA firms do not hire just CPAs in fact they generally act a bit like vultures on the many campuses interviewing students about to graduate with a degree, at least the large firms. Smaller local firms, like mine, are more interested in SKAs than pieces of paper.

One person working for me is not licensed, but she has skills, knowledge and abilities including the ability to work alone with little supervision and to learn. So she stays employed.

The one thing she needs, and you will need is a PTIN from the IRS whether you are self employed or an employee.

I cannot relate to $20/hour or anything less. It has been way too long since I was an employee. Also I live in the San Francisco area which is a different economy than most of the rest of the US.

For an entry level position, $10 or $15 dollars per hour might be quite adequate in many parts of the US. You needs SKAs to command and demand more.

Alternatively you can start you own business. Not an easy road, but worth it if you can be successful.

Freelance bookkeepers can command $20-$40 per hour depending on their geographic location. I started my most recent assistant at $50K. With bonuses she made $60K in her first year with me. Now she is at $60K and will probably make $70K - $75K before the end of the year. In San Francisco that is a basic salary. In your area I suspect it would be a comfortable salary.

 

[CPAinUSA]

Hi Tony,
From what you have written, your issue is really about: 1. understanding your self, 2. assessing available resources, 3. career management (setting a goal you actually like, breaking that goal into doable pieces, and then accomplishing each piece, step by step.)
Rather than being about accounting or the EA exam.
If accounting is what you really want to do, given your qualifications, you should be able to get started and succeed in that in any decent metro area.
I would suggest some sort of path of self-discovery. Different things work for different people.
I mean, here's the thing: I know a lot of people who simply "cruised" through corporate America, without knowing anything, they had no S-K-A whatsoever. Nothing. But they knew how to "work" the system and how to work the politics. And they retired very nicely in their 40s.
Personally, I hated all the corporate politics and back-stabbing, and I refused to do "political" things. Looking back, I would rethink that attitude if I had it to do over again.
My point is this - understanding yourself and the journey is really the key, at least from what you have described.
What do you really want? How can you get there step by step? Then - just enjoy the journey.

 

[Tempe Tony]

Thanks to both of you for your posts.

By the way, what does the acronym "SKA" stand for ?

 

[CPAinUSA]

"SKA" refers to either: A lively musical form originally associated with Jamaica. Or "Skills Knowledge & Ability".

 

[Tempe Tony]

Oh cool, thanks.

For this year, I have a few exciting goals:

1. Finish out my security guard job until at least summer 2020. At that time, I will FINALLY be 100% vested in their 401k, and can depart from them at any time knowing the matching $$ are all mine.

2. Take a grad-level class with DeVry this spring. My employer has a deal where they will pay one's first class with Devry (no subsidy at all after that, unfortunately, so I'll just take the one class).

3. Late this year, start looking for an accounting job, hopefully at a mid or large company. If no luck there, then who knows, maybe will try something else, maybe even working for H&R or Jackson Hewitt, as a "fast-food" tax preparer as drmdcpa calls them above, LOL.

 

[CPAinUSA]

Good goals! Good luck. On #3, try reaching out to whatever personal network you have. You probably have people you know or have met or worked with who are working in Accounting. Those contacts will bring you your best results.

 

[myshem]

I am a tax preparer for 3 years on my own, I was successful at personal and corporate returns but I don't have any credentials.
my question is should I push myself to study for the EA or rather focus on my skills, knowledge, ability, (ska).
The only reason I'm thinking to take it is that speaking to the IRS on behalf of clients is not easy without it, and people are asking me if I'm licensed? and I want to stay confident.
Anyone, please come in.