I've been an EA for about 2 years now and wanted to share my perspective on the process and outcomes. The exam preparation took me about 4 months while working full-time at a regional tax firm. I used a combination of Surgent and the free IRS materials, which worked really well together. One thing I'd emphasize that hasn't been mentioned much is the networking opportunities that come with the EA credential. There's a really active community of EAs who share referrals, especially for complex representation cases. I've gotten several high-value clients through EA networking groups that I never would have accessed as just a tax preparer. The salary bump was immediate for me - went from $58K to $72K as soon as I got enrolled, and I'm now at $89K after building up my representation practice. But beyond the money, the work is so much more interesting. Instead of just preparing returns, I'm solving real problems for people dealing with IRS issues. For study strategy, I'd recommend starting with Part 1 since you already have individual tax experience, but don't underestimate Part 3. The representation and ethics material is completely different from day-to-day tax prep work. I actually found it fascinating once I got into it - learning about offers in compromise, appeals procedures, and taxpayer rights really expanded my understanding of the tax system. The job market demand is real. I get contacted by recruiters regularly now, and many firms specifically seek EAs for their problem resolution departments. It's definitely been worth the effort!

I've been lurking on this thread for a while and finally decided to jump in because the experiences shared here are so valuable! As someone who's been doing tax prep for about 2.5 years, I was really torn between EA and CPA until reading all these detailed responses. What really convinced me is the combination of factors everyone's mentioned: the specialized focus on tax work (which is what I love most about my job), the faster timeline to completion, and especially those salary progressions. Seeing multiple people go from the $50-60K range to $80-90K+ within a couple years of getting their EA is exactly the kind of career advancement I'm looking for. I'm particularly intrigued by the networking and referral opportunities that @a72b2d1c1916 mentioned. Moving beyond just return preparation to handling complex representation cases sounds like it would make the work much more engaging and rewarding. Based on everything I've read here, I'm planning to start with the free IRS study materials and aim to complete Part 1 within the next 2 months. The consistent advice to start there given my individual tax background makes perfect sense. Thanks to everyone who shared their journeys - this thread has been more helpful than any career counseling I've received! It's amazing how much real-world insight you can get from people who've actually walked this path.

Quick tip: dont forget to set aside money for state income tax too if ur state has it!! I got destroyed my first year self employed bcause I only calculated federal. My state takes another 5% which I wasnt ready for.

As a tax professional, I want to emphasize that the previous commenters have given you excellent advice, but there's one crucial point I need to stress: you MUST start making quarterly estimated tax payments immediately if you haven't already! Since you're on track to make $54K this year, you should be paying estimated taxes quarterly (due dates are Jan 15, April 15, June 15, and Sept 15). The IRS expects you to pay as you earn, not wait until tax time. If you don't, you'll face underpayment penalties on top of your tax bill. For someone in your situation, I'd recommend setting aside about 25-30% of each payment you receive for taxes (federal income tax + self-employment tax + state if applicable). This might seem like a lot, but it's better to overpay slightly and get a refund than to be hit with penalties. Also, since this is your first year with significant income, definitely consider consulting with a tax professional or CPA who specializes in self-employment. The cost of their services (usually $300-500) will likely save you much more than that in proper deductions and tax planning strategies. The good news is that with proper planning and deductions (QBI deduction, business expenses, retirement contributions), your actual tax burden will be much lower than your initial calculation!

I went through this exact same situation two years ago! Forgot a W-2 from a part-time job that was only about $280. I was terrified about penalties but here's what I learned: The IRS is actually pretty understanding when you voluntarily amend before they catch the mistake. I used TurboTax's amendment feature and it walked me through everything step by step. The hardest part was honestly just printing and mailing the 1040X since you can't e-file amendments. One thing that helped calm my nerves was calling the IRS practitioner priority line (if you have a CPA or enrolled agent help you) or using one of those callback services others mentioned. Getting confirmation that my amendment was received properly gave me so much peace of mind. The whole process took about 4 months to fully resolve, but no penalties since I was proactive about it. Don't let the anxiety eat at you - just get the amendment filed and you'll be fine!

I'm dealing with a similar situation right now! Just discovered I missed a W-2 from a contract job that was only about $200. Reading through all these responses is really helpful - sounds like the consensus is to file the 1040X amendment regardless of the amount. What's really reassuring is hearing from people who've actually been through this process and didn't face penalties for voluntarily amending. I was worried the IRS would think I was trying to hide income, but it seems like they're reasonable when you're proactive about fixing mistakes. One question for those who've amended - did you include a letter explaining why you're amending, or did you just let the 1040X form speak for itself? I'm using TurboTax too and want to make sure I handle this correctly from the start.

I'm so grateful I found this discussion! I received $580 from the Facebook settlement in November and just got a 1099-INT for $26 in interest this week. Like so many others here, I was completely confused when I only received a tax form for the interest portion and nothing for the main settlement amount. This thread has been incredibly helpful in explaining that the settlement itself isn't taxable because it's essentially Facebook returning value from our personal data that they improperly used - we're getting back what was rightfully ours to begin with. The interest that accrued during the legal process is what's taxable, which is why we get the 1099-INT forms. The CPA's explanation about IRC Section 104(a)(2) really helps me understand the legal foundation for this treatment. And seeing so many people share similar experiences with different settlement amounts shows this is consistent across all Facebook settlement recipients. I feel much more confident now about reporting just the $26 in interest on my tax return and keeping all my settlement documentation properly filed. Thank you to everyone who shared their experiences and knowledge - this community has turned what seemed like a really complicated tax situation into something manageable!

I just wanted to add my experience to this incredibly helpful discussion! I received $460 from the Facebook settlement back in December and got a 1099-INT for $21 in interest this week. Like everyone else here, I was completely baffled when I only received a tax form for the interest portion and was panicking that I'd somehow missed the "main" tax document. This thread has been absolutely invaluable in explaining the tax treatment. The concept that we're essentially getting back our own data value - rather than earning new income - makes perfect sense now. Facebook was profiting from our personal information without proper consent, so the settlement is returning value that rightfully belonged to us in the first place. The CPA's confirmation about IRC Section 104(a)(2) and seeing so many people share nearly identical experiences across different settlement amounts has given me complete confidence in this approach. It's amazing how this community comes together to help each other navigate these unusual tax situations that most of us have never encountered before. I'm going to report just the $21 in interest on my return and keep all my settlement paperwork well-organized for my records. Thank you to everyone who shared their knowledge and experiences - you've turned what felt like a really stressful tax situation into something I can handle with confidence!

Just to add another perspective here - I went through this same confusion when I started my consulting business. One thing that helped me understand accrual accounting better was thinking about it this way: you're essentially recognizing the "economic reality" of when transactions happen, not just the paperwork timing. So in your case, the economic reality is that you earned that $4,300 in December 2024 when you completed the work and delivered value to your client. The fact that you didn't get around to invoicing until January doesn't change when you actually earned it. I'd recommend keeping good records of when work was actually completed vs when invoiced vs when paid - it'll make tax time much easier and help if you ever get audited. I use a simple spreadsheet with columns for service date, invoice date, and payment date. Makes it crystal clear which tax year everything belongs to.

As someone who just went through this exact same situation with my freelance business, I can confirm what others have said - it's definitely a 2024 income since that's when you performed the work. One thing I learned the hard way though is to be really careful about projects that span multiple months. I had a client project that I started in November 2024 but didn't finish until February 2025, and I made the mistake of booking all the revenue in February when I invoiced. My accountant had to help me correct it by recognizing the revenue proportionally based on work completed each month. For your December project, since it sounds like it was completed entirely in December, the full $4,300 should go on your 2024 taxes. Just make sure you have good documentation showing when the work was actually finished - I keep copies of final deliverables with timestamps, client approval emails, and project completion notes. This backup documentation has been super helpful during tax prep. The timing differences between when you earn, invoice, and get paid can definitely be confusing at first, but once you get the hang of accrual accounting it becomes much clearer!