We talk with people every day about what it takes to become a tax preparer. Here are the most frequently asked questions (FAQs) we get on becoming a tax preparer.
What sort of education do I need to become a tax preparer?
Many people think they need to have a college degree, become a Certified Public Accountant (CPA), or be great at math to become a tax preparer and prepare federal tax returns. These are all myths! The truth is that the IRS doesn’t currently have any formal education requirements to become an entry level tax return preparer at this time. There are credentials that are highly regarded in the tax industry – such as the Chartered Tax Professional Certificate Program and the Enrolled Agent designation – but again, these are higher level, and not a requirement. Note: continuing education will be important, as tax laws change every year.
How long will it take me to become a tax preparer?
This all depends on you! A solid beginner income tax preparation course, like the Comprehensive Tax Course from Surgent Income Tax School, can be completed in just 10 weeks or less when you complete at least two lessons per week. The course is online and self-paced with instructor support by email. So, it really is up to you as to how long it takes to complete the course.
Do I need a license to be a tax preparer?
There are currently no mandatory IRS tax preparer license requirements, however, several states have their own tax preparer regulations. Check out our Tax Preparer Regulations by State to find out if your state currently regulates tax preparers.
There is a voluntary IRS Annual Filing Season Program (AFSP) that you should look into. This is a minimum standard for tax preparers that the IRS has put in place. The AFSP aims to recognize non-credentialed tax preparers who aspire to a higher level of professionalism. It’s quickly becoming a necessity to participate in this program, as it also gives you limited representation rights for your clients before specific IRS agents, representatives, and employees, including the Taxpayer Advocate Service. You’ll want to be able to talk to the IRS on your clients’ behalf, and your clients will definitely see the value in knowing that their tax preparer can talk to the IRS for them! Learn more about the AFSP
What do I need to do to become a tax preparer?
There are a few basic things you will need to do.
- Take a top-quality, beginner tax preparation course.
- Obtain a Preparer Tax Identification Number (PTIN) from the IRS.
- Check your state to see for tax preparer requirements.
- Continue your education each – tax laws are always changing!
Check out the steps here: Four Easy Steps to Become a Tax Preparer to make sure you have everything you need.
What do tax preparers do in the off-season?
We all know tax return preparers are very busy from mid-January to mid-April each year – the typical tax season. However, many tax preparers have enough tax preparation work to stay busy year-round, especially if they have a lot of late filers and clients who have quarterly tax payments.
A lot of tax preparers also look to diversify and earn additional revenue in the off-season by offering other related services such as bookkeeping, payroll, financial services, and notary services. Tax preparers who become Enrolled Agents can also offer representation services.
Some tax preparers do very different things in the off-season, such as work in retail, work for a landscaping business, and other unrelated seasonal jobs. While others just take the rest of the year off and enjoy their summers and holidays. There are so many options with this flexible career choice!
How much do tax preparers make?
Tax return preparer salaries can vary quite a bit. When you first start out, you’ll obviously be earning less. But as your client base grows, so will your income! And if you continue your education each year and expand your tax knowledge base, you can prepare some very complicated tax returns, which you can charge quite a bit more for!
The average annual salary as reported by the U.S. Bureau of Labor Statistics was $49,550 in May 2019, with the lowest 10% making $21,750 and the highest 10% making $87,060. Keep in mind, many tax preparers only work 3 months of the year. So, there is the potential to make $50,000 in just three months’ time! Think about what you could make if you were year-round and if you also offered other services!
Best of all, there is no cap on what you can make! So the sky’s the limit on your income!