A career in tax preparation has always been rewarding. Recent changes and trends in the tax preparation industry driven by technology, legislation and demographics will make the outlook for tax professionals even more attractive. Below are 12 reasons why tax preparation may be more rewarding for you.
1. Savings on Your Own Taxes
How much money do you pay in income taxes each year? For most middle-income taxpayers, somewhere between 1/4 and 1/3 of earnings are paid out in federal and state income taxes. This adds up to a great deal of money over one’s lifetime. Tax knowledge will enable you to minimize your income tax liability and potentially save thousands of dollars over your lifetime. You will also save on tax preparation fees!
2. High Income Potential
Experienced tax preparers may earn $25 per hour or more and self-employed tax professionals can earn more than $100 per hour. During the 3-month tax season (mid-January to mid-April) it is possible for a self-employed tax preparer to earn $50,000 or more. Year-round income opportunities also exist for tax preparers who provide taxpayer representation or related services such as small business bookkeeping, payroll and financial planning. Learn more about why you should start your own tax business.
3. Fast Track to a Professional Career
Most people think of tax preparation as requiring expertise in accounting and high-level math. The reality is that tax is law not accounting. Becoming a tax professional requires no previous accounting experience and only basic arithmetic skills. A college degree is not a requirement. The most important attributes for success as a tax preparer are the ability to read and comprehend the tax laws and excellent people skills. You can become a tax preparer in 10-weeks or less by completing The Income Tax School’s 60-hour Comprehensive Income Tax Course. The course will also covers all of the topics on the IRS Registered Tax Return Preparer (RTRP) exam should it be reinstated.
4. Career Stability
Ben Franklin said “… in this world nothing can be said to be certain, except death and taxes.” Even when legislation is passed to simplify the tax code, tax law changes cause confusion among taxpayers and, invariably, new tax law changes are enacted to manipulate the economy or meet some social need. There will always be a need for tax professionals, especially to help individual and small business taxpayers who have more complex tax returns or who simply do not have the time, aptitude or interest in preparing their own returns; or who simply want peace-of-mind in knowing their tax professional stands behind their taxes and is available when needed to help them deal with the IRS.
5. Personal Satisfaction
Tax preparation may seem to an outsider to be a boring occupation. In reality, helping people deal with their taxes is very rewarding and gratifying. As a tax professional you are a highly trusted confidante to your clients. They trust you with their most confidential financial and personal information. You are able to make the dreaded task of tax preparation a pleasant experience by educating them in the tax laws and simplifying the task. You ensure that your clients’ tax liabilities are minimized and their tax refunds are maximized. You establish very personal relationships with your clients who look forward to seeing you each year.
6. High Demand for Tax Professionals
On January 1, 2012 the IRS implemented the nationwide regulation of tax preparers. The new requirements included registering with the IRS, a competency exam and annual continuing education. On Friday, Jan. 18, 2013, the United States District Court for the District of Columbia enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, tax return preparers covered by this program are not required to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.
What you need to know: There is currently no nationwide regulation of tax preparers. So there is currently no IRS competency exam or annual continuing education requirement by the IRS. All paid tax return preparers do still need to obtain a preparer tax identification number (PTIN). The IRS remains confident in their legal authority and committed to protecting taxpayers through implementing reasonable standards in the tax preparation area. Their appeal of the district court opinion was filed on Mar. 29, 2013.
The regulation of tax preparers is a good thing, enhances the image of the tax preparation industry and lends credibility to those who would become approved by the IRS as a Registered Tax Return Preparer (RTRP). These requirements would help to weed out many unqualified tax preparers, which would result in more tax preparation business for legitimate tax professionals. In addition, many elderly tax preparers were expected to retire rather than take a competency exam. The Income Tax School’s Comprehensive Tax Course with Career Package or Business Start-Up Guides will provide the educational foundation necessary to pass the IRS Competency Exam (without the added cost of an exam review) should the IRS RTRP competency exam be reinstated.
7. Professional Status
After completing the Comprehensive Income Tax Course, you will receive a certificate that can be framed and mounted on the wall of your tax office. You may also consider enrolling in The Income Tax School Chartered Tax Professional certificate program to earn the professional CTP® designation. After earning the CTP® certification and gaining more tax preparation experience you should have the knowledge necessary to take an Enrolled Agent (EA) review course, sit for the EA exam and also become an EA. The IRS EA designation is the most significant professional credential in the tax preparation industry. The Income Tax School also offers to other credentials: the Chartered Tax Advisor and the Chartered Tax Consultant.
Tax preparers may enjoy flexible hours since most tax preparation offices are open evenings and weekends. These hours enable moonlighting professionals to earn extra income during tax season. Tax preparation is also ideal for stay-at-home parents with young children who need to be home during the summer when the kids are out of school. Early retirees also enjoy the flexibility of being able to travel and spend time with their grandchildren during the off-season. People who work in retail during the holiday season can then work during tax season after their retail job ends. Self-employed professionals such as real estate agents and financial planners can add tax preparation to their practices and also cross-market their services to clients.
There is a need for tax preparers wherever there are U.S. taxpayers. Military spouses can prepare taxes at military bases anywhere in the World. Clients will typically continue to ask their tax preparers to do their returns remotely if they or their tax preparer relocates. Remote tax preparation is very easy using phone and e-mail. Real-time interviews can also be conducted by web-cam, with which most computers are now equipped.
10. Stopgap for Unemployment
If you are unemployed, tax preparation can be an ideal stopgap to earn income while you are seeking new employment and, if desired, can be continued part-time even after landing a new full-time job. A tax preparer who is also employed full-time enjoys the peace-of-mind in knowing that tax preparation can become a full-time job to fall back on should he or she be laid off from a regular job.
11. Complementary to Other Professions
Income tax crosses many professionals. Nearly every financial transaction has a tax consequence. Tax knowledge can be a valuable asset to real estate, banking, insurance and financial planning professionals, among others.
12. Recession Resistant
All taxpayers must file taxes every year regardless of current economic conditions. Most people who use tax preparers do so because they lack the ability to prepare their own returns. In a bad economy, minimizing one’s tax liability is especially important.