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Becoming a tax preparer is a great way to make extra cash during the busy tax season, or even to earn a living year round. Typically tax preparers have less experience and training than certified public accountants, tax attorneys or enrolled agents, but do meet the experience and education requirements of their state.
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Becoming a tax preparer is a great way to make extra cash during the busy tax season, or even to earn a living year round. Typically tax preparers have less experience and training than certified public accountants, tax attorneys or enrolled agents, but do meet the experience and education requirements of their state.
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Introduction
- Tax preparers prepare federal and state tax returns for individuals and small businesses. They determine appropriate deductions, adjustments and credits by analyzing financial data and interviewing the client. A tax preparer is responsible for accurately filling out tax returns, and may be required to represent the client to the IRS. If you have accounting experience, or even just enjoy filling out your own tax return, becoming a tax preparer may be an option for you.
Step 1: Research State Requirements
- To become a professional tax preparer, you must meet your state's licensing or registering requirements. These requirements may differ from state to state. General requirements include:
- High school diploma or GED.
- Must be 18 years of age.
- Must complete a tax preparation program or obtain a minimum amount of professional tax preparation experience.
Step 2: Complete a Tax Preparation Program
- Becoming a tax preparer is a relatively fast process. Most tax preparation courses require no previous accounting experience and only take a few months. You may enroll in one of the many online tax preparation programs or attend courses through tax preparation companies like H&R Block.
- The topics classes emphasize may vary, but generally you'll learn:
- Tax theory.
- Tax law.
- How to prepare tax returns.
- Financial planning.
- Client interviewing skills.
- Before choosing a program, make sure the curriculum meets your state's standards.
Step 3: Register as a Tax Preparer with Your State
- After you meet the necessary requirements, you will be able to register as a tax preparer in your state. Once registered, you can get paid to prepare taxes. It may be necessary to renew your registration annually. Renewal may require continuing education classes; this is to keep your knowledge of tax law current. Enrolled agents, certified public accountants and attorneys may be exempt from state registration.
Step 4: Find a Job
- Now it's time to find a job. On average, tax preparers make less than $35,000 a year, but this will depend on the following:
- Whether you work full-time or part-time.
- Whether you work all year or seasonally.
- The amount you charge per tax return.
- Tax preparers are usually hired right before the tax season, which is January to April. When finding a job, here are a few tips:
- Tax preparation schools are great resources for finding positions, especially if you attended a program through a tax preparation company.
- You can also check with the National Association of Tax Professionals.
- If you are not interested in joining a tax preparation service, you may want to consider starting your own business.
Conclusion
- Being a tax preparer is a challenging career involving strict deadlines and major responsibility. However, the seasonal nature of the job does provide some freedom. As a tax preparer you may choose to work only during the tax season to supplement a full-time career, or work all year long in other areas of tax preparation.
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