How to become a tax preparer
A tax preparer helps individuals and businesses file accurate and timely tax returns. Read on to learn how to become a tax preparer.
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What does a tax preparer do?
A tax preparer helps clients analyze their financial affairs and prepare and file tax returns, ensuring they comply with federal, state, or local tax laws. Tax preparers can work as freelancers or for tax preparation companies and accounting firms. Their skills typically include math, attention to detail, and understanding tax codes.
According to the Bureau of Labor Statistics (BLS), the median annual salary for a tax preparer in 2023 was $49,010.
Steps to become a tax preparer
Here are some of the steps that an aspiring tax preparer could take:
Step 1: Complete your education
In most cases, a high school diploma (or the equivalent) is the minimum requirement for any entry-level role. Courses in bookkeeping, basic accounting, or taxation are also helpful, while a degree in accounting or finance could improve career prospects.
Step 2: Get the necessary credentials
Apply for a preparer tax identification number (PTIN) through the IRS. Tax preparers have different levels of expertise and training, and, if you don't have other tax-related credentials, you will want to apply for limited representation rights. This means you aren't a certified public accountant (CPA), attorney, or IRS agent, and requires that you represent your clients before revenue agents or similar IRS employees.
If you are an attorney, CPA, or IRS agent, you may be eligible for unlimited representation rights, which allows you to represent your client on matters without the oversight of a revenue agent or IRS employee.
Step 3: Gain experience in tax preparation
Consider entry-level roles at a tax preparation firm where you could work under the supervision of an experienced accountant. This will help you to build knowledge of tax systems and software. Temporary work is often available during the busy tax season, which can be a great way to gain experience.
Step 4: Stay up-to-date and improve your skills
Consider attending webinars, workshops, or seminars to stay current on tax authority regulations. Tax laws can change frequently, and continuing education is wise. Explore technological solutions to help streamline your tax preparation work and make your services more attractive to potential clients.
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