Responsible for accurately preparing and filing tax returns for individuals and businesses, ensuring compliance with tax laws and regulations.
Overview
Tax preparers assist individuals and businesses by accurately completing and filing income tax returns, ensuring compliance with federal and state tax laws. Their responsibilities include assessing financial records, calculating taxes owed or refunds due, and identifying tax credits and deductions to maximize client benefits. Professionals in this field often specialize in personal or business taxes, providing valuable guidance and peace of mind during tax season.
A career as a tax preparer offers steady demand, rewarding interactions, and flexible working arrangements, making it an excellent option for detail-oriented individuals with strong analytical skills. Ideal for high school graduates, college students, career changers, and working parents seeking professional growth, the role provides clear opportunities to advance through continuing education and certification pathways.
On a Daily Basis
Tax preparers have a critical role in helping individuals and businesses file their taxes accurately and efficiently. Their daily tasks often require attention to detail, strong analytical skills, and a good grasp of tax laws.
A typical day might include:
- Reviewing clients' financial documents, such as W-2s,1099s, and other relevant tax-related paperwork to gather necessary information.
- Utilizing tax preparation software to input data and ensure accurate calculations of taxes owed or refunds due.
- Staying updated on federal, state, and local tax regulations to provide clients with informed advice and optimize their tax benefits.
- Communicating with clients to clarify information, answer questions, and gather additional documentation needed to complete their tax returns.
- Preparing and filing tax returns within deadlines, ensuring compliance with all applicable tax laws and regulations.
- Providing recommendations for tax planning and strategies to minimize future tax liabilities based on clients' financial goals.
- Conducting follow-up meetings with clients to review their tax situation and discuss any changes that may impact their tax status in the upcoming year.
How to Become One
Becoming a tax preparer can be a fulfilling career choice, especially if you have a knack for numbers and a desire to assist others in handling their finances. Here's a straightforward guide on how to enter this profession:
- Obtain a high school diploma or GED as the minimum educational requirement.
- Consider further education, such as a certificate in tax preparation or an associate’s degree in accounting, which can enhance your understanding and marketability.
- Learn the basics of tax law and tax preparation through coursework or self-study. Familiarize yourself with using tax software and the forms required for different types of returns.
- Apply for a Preparer Tax Identification Number (PTIN) from the IRS, which is mandatory for anyone who prepares or assists in preparing federal tax returns for compensation.
- Gain experience by working under an experienced tax preparer or volunteer in IRS programs such as the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE).
- Consider getting certified as an Enrolled Agent (EA), the highest credential awarded by the IRS, which allows unlimited rights to represent taxpayers before the IRS and requires passing a comprehensive examination.
- Keep abreast of changes in tax legislation and continuing education requirements to maintain your credentials and enhance your skills over time.
Career Outlook
According to the U.S. Bureau of Labor Statistics (BLS), the median annual wage for tax preparers was $53,180 in May 2023. The lowest 10 percent earned less than $33,110, and the highest 10 percent earned more than $84,820.
Source – https://www.bls.gov/oes/current/oes132082.htm
Employment of tax preparers is expected to show little or no change from 2022 to 2032. On average, about 7,700 openings for tax preparers are projected each year, mainly due to the need to replace workers who leave the occupation permanently.
Source – https://www.bls.gov/ooh/business-and-financial/tax-examiners-and-collectors-and-revenue-agents.htm
For more detailed information, you can visit the BLS website: https://www.bls.gov/ooh/business-and-financial/tax-examiners-and-collectors-and-revenue-agents.htm
Job Title
Average Base Salary (2024)
Typical Entry-Level Degree
$38,000
Certificate or Associate Degree
$53,000
Associate or Bachelor’s Degree
$70,000
Bachelor’s Degree
$100,000
Bachelor’s/Master’s Degree
Special Skills & Requirements
Becoming a tax preparer requires some specific skills and qualifications, but don't be intimidated if you're just starting out. A keen eye for detail, good math skills, and strong organizational abilities are foundational. These skills help in accurately calculating taxes and maintaining comprehensive records. Familiarity with basic accounting and finance is beneficial, though specific tax preparation knowledge can be learned through courses and training programs.
To legally prepare taxes for a fee, one must obtain a Preparer Tax Identification Number (PTIN) from the IRS. Depending on your state, additional requirements may include completing tax law courses, passing a state-administered exam, or having a certain amount of related work experience. Continuous education in tax laws and regulations is also essential to remain compliant and effective in this role. Starting with a certification course in tax preparation, offered by many community colleges or online platforms, is a great way to begin your journey.