How to Become a Tax Preparer

Tax Preparers (TP) are the people who help us complete those overly complex income tax returns. Income tax return forms are generally confusing and cumbersome. They are paid to fill these tax returns, and to include all possible deductions so that the tax debt is reduced to the maximum amount.

Steps to Become a Tax Preparer

  • Join tax preparation classes either online or in a traditional school.
  • Start preparing your own taxes.
  • Join a tax preparation company as a trainee during the tax season so that it supplements your credentials. And of course if the company is satisfied with your work, you can be hired full time by the company for the remainder of the year.
  • Improve your skills and comfort with numbers and to use a computer as a facilitator because computer software is integral in this field in the contemporary world.
  • Increase your comprehension of the detailed tax laws and their clauses.
  • Obtain that pivotal certification and pass the licensing test

Obtaining a license opens the legal door for a TP to prepare income taxes for their clients or anyone. Generally, a TP has to work under the supervision of accountants and/or tax consultants.

Universal Requirements

Any person with 18 years of age, high school graduate and having knowledge of tax laws can join the training programs and become a TP. But the person should have an extensive knowledge about the federal and state laws of the tax field. You should be able to analyze the tax problem, if there is one, of the client and be able to sort it out legally. Furthermore, you should also be aware of the constantly changing tax laws, code, details and required information on Form 1040 (or any other equivalent) in their respective state. With that said, after obtaining the license, the TP has to enroll in a professional association to form this cohesive link so they are not out of the loop on any new tax changes or information.

Types of TPs

  • General TP: They are people employed with tax preparation companies. TP's here are trained to help the customers in completing their income tax returns and to spot any errors and/or omissions.
  • Enrolled Agents: These are the people enrolled with the IRS. Enrolled Agents have to take 72 hours of professional education once every 3 years and pass the standardized test set by IRS.
  • Certified Public Accountant (CPS): They need 5 years of education and rigorous testing.

Training and Information

Major tax franchises like H & R Block, Liberty Tax, Jackson Hewlett and Instant Tax conduct tax classes for aspiring TPs. Once you join these classes you also get an opportunity to work in one of their franchises. If you get trained for the State of California, then you are eligible to work for an entry level position with the IRS or major accounting agencies like Account Temp or Robert Half. Or get enrolled in an online class and it is hassle free. Do the course work, take the online test and follow the requirements in your state and then register with the IRS.