How To Become A Tax Preparer
Every year in the months leading up to April 15th, the most sought-after professional around is a qualified, well-educated tax preparer who has a thorough command of the current tax law and enough experience in the field to find every possible legal deduction and tax advantage for his client. This individual will most likely be a certified public accountant, or CPA, who has earned a four-year degree at a college or university, with a specific number of hours dedicated to studies in business administration and accounting. In all states except Oregon and California, however, any individual is permitted to offer tax preparation services to the general public with or without formal education or certification.
The tax professional whose background includes years of extensive formal education and certification is sure to charge higher fees and offer more in-depth services than the tax preparer with no required certification or degree. However, both serve their own purpose. Some tax situations are simple and straightforward while others are complicated and require the extensive oversight that only a certified professional can offer.
Requirements For Becoming A Tax Preparer
Requirements for certification of accounting professionals, CPA’s, are determined by the Board of Accountancy in each state. Most states require a baccalaureate’s degree with a certain number of credit hours devoted to studies in accounting and business administration. Upon proof of completion of the required education, the State Board of Accountancy allows applicants to sit for the CPA exam. For those who pass and enter the field as certified public accountants, yearly continuing education is required to maintain active certification status.
Tax preparation services are not restricted to the field of certified public accountants. Outside Oregon and California, any person with the ability to work well with numbers and understand current tax law can assist others in the completion of their income tax returns. Education and training is available from a variety of sources to equip tax preparers with enough instruction and experience to competently prepare and submit tax returns for others.
Many well-known tax firms like H & R Block and Jackson Hewitt offer classes on tax preparation. There are also numerous online resources for taking instruction that are easily located by conducting an Internet search. Local community colleges have course offerings as well. One benefit of taking classes with firms like H & R Block is that upon acceptable completion of their course, graduates may then apply for a position with the company as tax preparers.
Working As A Tax Preparer
Most established tax preparers agree that the best way to enter the field is to avail yourself of the instruction offered by well-known tax firms, spend a few seasons working with them under the supervision of knowledgeable personnel, and then strike out on your own. Others don’t feel the need for supervisory oversight and recommend easing slowly into the field by handling simple returns and gradually building up to more complicated, difficult ones. Either approach is reasonable as long as care is taken to verify information and sources.
Regardless of the level of training and education a professional may have, the most important issue in successfully managing tax matters is compliance with and knowledge of current IRS tax code, which is updated from year to year. Tax preparers and CPA’s alike must keep abreast of current developments in tax codes and laws in order to provide competent service to clients. Continuing education at both ends of the professional spectrum is not only advisable, but in the case of CPA’s, required. Courses to fulfill certification requirements as well as to enhance the working knowledge of individual tax preparers are available from multiple sources including online schools, seminars, colleges and junior colleges, and tax preparation firms.
Many additional issues are inherent to the tax preparation industry and should be considered when deciding whether to enter the field. The ability to disseminate the constant flow of facts and information generated by the Internal Revenue Service will be pivotal to the successful navigation of the tax preparation process. This will be an ongoing endeavor since bulletins and updates are discharged regularly by the IRS. All information needed to complete tax filings is garnered through interviews with clients, so an ability to handle people with courtesy and respect is important. This is, after all, a service profession dedicated to the assistance of others during what may occasionally be a difficult process for them.
Work flow in the tax field tends to be cyclical with the months of December through April being the busiest. Long hours and late nights at this time may be unavoidable in order to meet crucial deadlines. Tax preparers must be willing to accept responsibility to maintain and meet all deadlines on behalf of their clients.
After due consideration of the requirements and educational experience needed to perform well on behalf of others in the preparation of their taxes, the next area to address would be local business requirements. A call to your local city and county offices will educate you in what’s required, if anything, to operate as a tax preparer in your area. A call to the IRS will be in order if you intend to offer “e-filing” to your clients. Application must be made to the IRS to be set up to “e-file” clients’ returns. It is also important to remember that computer programs for income tax preparation were not made to allow for multiple filings. Commercial software must be employed to generate a large number of tax returns.
Starting out slowly seems to be the key to success in the field of tax preparation. With due diligence in the area of oversight and continuing education, progress can be made in growing a busy, thriving business that can be tailored to your hours and environment and the needs of your clients. The potential for income in a self-employed scenario is limited only by your own abilities and will surely grow with your business. A tax preparation service fills a need in the community and can be of benefit to both you and your clients.