How to Become a Tax Preparer in 5 Steps

Research what it takes to become a tax preparer. Learn about the educational requirements, job outlook and salary information to find out if this is the career for you. Schools offering Accounting - Taxation degrees can also be found in these popular choices.

What Does a Tax Preparer Do?

Tax preparers organize and fill out the various tax information as required by the Internal Revenue Service. These professionals make the process of filing taxes simpler for individuals, as they are more familiar with tax codes and various state tax laws which enables them to work efficiently. Tax preparers could be employed by individuals or by companies and corporations to file their taxes, which may be more complex. The following table provides information for this career:

Education Required High school diploma and a tax training program
Key Responsibilities Properly prepare tax returns, study relevant financial documents, follow all IRS codes, rules and regulations
Certification Preparer Tax Identification Number (PTIN)
Projected Job Growth (2014-24) 2%*
Average Salary (2015) $44,730*

Source: *U.S. Bureau of Labor Statistics

What Is a Tax Preparer?

As a tax preparer, you are responsible for preparing tax returns for individuals and businesses. In the course of preparing the return, you may look over receipts and other financial documents, ask the individual or business owner questions and determine deductions, expenses and other figures. Your job is to help prepare returns properly for individuals or business owners who may not be able to prepare their own return. You are responsible for following all tax codes, regulations and rules set by the Internal Revenue Service (IRS).

Step One: Prepare in High School

To become a tax preparer, you will first need to earn a high school diploma. You do not need an associate or bachelor's degree for entry into the industry. Having strong abilities in math, computer science and customer service are good ways to prepare for the challenges ahead. Additionally, having a basic understanding of the tax regulations, such as filing deadlines and familiarity with tax forms can prove beneficial.

Step Two: Go to Tax Training School

Because many tax preparers only hold a high school diploma, additional professional education is necessary. Technical colleges, vocational schools and tax service franchises offer tax training programs. A tax training program may include courses in electronic filing, W-2 and 1040 forms, income, dividends and exemptions.

Step Three: Become Registered with the State and the IRS

States often require tax preparers to be registered by a tax educational council. Requirements vary by state but generally involve completing a certain amount of hours in a state accredited tax program and having proper liability insurance.

As of 2011, the IRS requires paid tax preparers to also have a Preparer Tax Identification Number (PTIN). The PTIN allows the IRS to keep track of tax preparers and spot fraud or other illegal activities to protect consumers. According to the IRS, to receive a PTIN you will need to show or complete a specified amount of continuing education credits and an evaluation exam.

Step Four: Obtain a Job Working for a Tax Service

You might want to begin your career as a tax preparer by working at a tax service for a few seasons. Tax services will thoroughly train you in tax regulations and laws, which often change every year, and you'll gain invaluable experience under the supervision of more seasoned tax preparers. After gaining experience, you may choose to start your own business or work for the IRS. You can consider taking the IRS-sponsored Special Enrollment Exam. If you pass the exam, you can formally represent your clients during an IRS audit or tax investigation.

What Are Some Related Alternative Careers?

There are a number of other related careers you may be interested in if you are considering a job as a tax preparer. A loan officer is a professional who reviews loan requests by analyzing a person's finances, employment status, credit history, and outstanding debt, among other factors. They often meet with loan applicants to discuss options and various types of loans. However, it's important to note that this job requires a bachelor's degree. If you're not interested in completing more than short-term postsecondary training, you might consider a job as an accounting clerk. Accounting clerks generally use software programs to keep track of financial information by entering and organizing data. These clerks typically only need some basic postsecondary training in accounting, though a high school diploma is sometimes acceptable.

To continue researching, browse degree options below for course curriculum, prerequisites and financial aid information. Or, learn more about the subject by reading the related articles below:

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