10 Steps How to Be a Tax Preparer

(doylc.com) How to Be a Tax Preparer - Becoming a tax preparer can offer rewarding and well-paying work. US Bureau of Labor Statistics US government agency that collects and reports labor-related information Go to source You can make even more money if you do more detailed tax planning and resolution, such as if you become a certified public accountant (CPA) or tax attorney. In addition, tax preparers deal with a large cross-section of the public and, in many cases, are able to deliver good news of a large return or money found in previous years' returns to their clients. You'll also enjoy quite a bit of job security since people have to file taxes every year regardless of the state of the economy.

• Fulfillment of Educational Requirements

1. Meet the minimum requirements. As a rule, tax consultants require a technical college entrance qualification or an equivalent qualification. That means you don't need a bachelor's or associate's degree to start or thrive in the tax prep industry. However, any aspiring accountant should be aware that the job requires some basic skills. You can prepare for the high school job by cultivating :

Strong math skills.

Basic computer skills and typing skills.

Competence and experience in customer service.

A very basic understanding of tax regulations (required forms and time restrictions).

2. Take basic training courses. Because many tax preparers don't have any formal training in tax preparation, they must undergo a small amount of training before they can begin working. In these training courses, students learn about topics like filing status, taxpayer interviews, exemptions, tax calculations, and refund schedules. These courses are offered by a number of sources, so it's best to consider several options before choosing the best one for your situation.

Some tax preparation companies offer on-the-job training, so try applying for a job directly and see if they offer this type of training. This could save you a considerable amount of time and money. Find jobs by searching online job boards in November or December.

Sign up for a training program offered by the Accreditation Council for Accountancy and Taxation (ACAT) or National Association of Tax Professionals. See their websites for more information.

Many technical and community colleges, as well as universities, offer short certificate programs that can qualify you for entry-level positions. Search for programs in your area to learn more. Some of these may also be available online.

3. Complete additional tax training to increase your knowledge base. However you decide to get the training in, you'll have to complete it before becoming a tax professional. If you can, try to take advanced courses that include information on topics like estate taxes, capital gains, and retirement funds. This knowledge can separate you from the crowd.

Keep any notes or information from your courses as you may need them later if you decide to pursue higher certification or training.

Also, make sure that any tax preparation skills you learn are specific to the state you will be practicing in, as filing requirements vary from state to state.

4. Earn a tax-related degree to give yourself a competitive edge. While a basic tax preparation course can prepare you for most tax prep tasks, you may also want to achieve higher goals by becoming a chartered accountant, CPA, tax attorney, or IRS-registered agent. Of course, these require a lot more education and costs for you, but the chances of advancement and salary increases are much better. Without additional education (or owning your own tax consulting firm), there is little room for advancement in the tax consulting industry.

Tax preparers can become enrolled agents either by working for the IRS for a period of time or by passing the Special Enrollment Examination (SEE) and applying online for enrolled agent status. After passing the test or gaining the required work experience, you can apply for enrolled agent status by completing IRS Form 23 and undergoing a background check.

• Be Certified a Tax Preparer

5. Obtain a Producer Tax Identification Number (PTIN). Before a tax preparer can begin work, they must also meet state and federal requirements. First, apply for a PTIN by submitting personal information (including your social security number) and a tax return from the previous year. This can be done online at http://www.irs.gov. When you obtain a PTIN, you are registered as an "unregistered preparer," which gives you the minimum clearance to prepare federal taxes.

Note that this application requires disclosure and explanation of any criminal convictions or problems with your tax obligations.

6. Register with your state. In order to get a full license, you will likely need to register with your state as well. However, these requirements vary from state to state. Check your state's requirements by searching online for "[your state] tax preparer registration". However, in some cases, registration with the state is waived or not required under state law.

7. Get licensed if needed. Accountants and tax attorneys must obtain a license in the state in which they wish to work. Education and experience requirements to take the license exam vary from state to state. Therefore, check with your state's accounting department for more information. Once you have met the requirements, prepare and register for the exam. You must pass the exam to get your license.

• How To Find Work

8. Work for a tax advisory service to gain experience. Many accountants begin their careers with an established tax advisory service. These companies will train you on local and state tax filing requirements and can help you through any initial difficulties. After gaining this experience, you will be better prepared to move to another job, start your own business, or pursue further education.

The biggest benefit of this type of work is that many accountants offer both free on-the-job training and free continuing education courses.

While this type of work is a good start for a tax accountant, you may only be able to find work during tax season, leaving you unemployed for about two-thirds of the year. This is great for part-time employees, but if you want to become a full-time accountant you might want to look at other types of employment.

There are many tax prep services and CPA firms that are virtual and allow you to work from home with flexible hours.

9. Work for a law or accounting firm to tackle more difficult assignments. In addition to specialized tax preparation companies, law firms or accounting firms that provide tax services may also offer work. In these roles, you would likely assist a chartered accountant or tax attorney in preparing tax returns for clients. In other words, you'd be doing more than just entering your client's information — you might also be delving into certain tax accounting procedures or the intricacies of tax law.

It may be easier to find this work if you can set yourself apart from other tax professionals by specializing in a specific type of tax filing or business. For example, perhaps you could specialize in filing a complex type of tax, such as that on international assets.

These opportunities may also be available at various other types of businesses, so be sure to search online job board and classified newspaper ads frequently for new opportunities.

10. Start your own business if you're self-motivated. With enough accreditation or experience, you can start your own tax preparation business as an independent tax preparer. Start by advertising your services to the community and begin growing your customer base. With friendly and reliable service, you may soon find your business thriving and growing. With time, you may even be able to open another franchise and hire other tax preparers to do the work for you!

It may be a good idea to start with family and friends before moving on to other customers. This can help you get a low-stress start while you fine-tune your tax preparation process. From there, you can pass out business cards and rely on recommendations for more business.

This will be your best choice if you want to work part-time as a tax preparer. It's easy to run a tax preparation business out of your home and undercut the prices of some of the bigger-name tax preparation services.

If you want additional work throughout the year, consider also offering services as a tax adviser or personal accountant to your tax preparation clients.