How to become a tax preparer?

Do you want to pursue a career in tax preparing? Then this guide will be of immense help to you. Here, we will discuss the role of a tax preparer and how can a person become one. We will also go through the required qualifications and the perks of the same. So, let’s get started!

What does a tax preparer do?

The first thing to know on the journey is what a tax preparer actually does. The main job of a tax preparer is to advise their clients on tax-related matters, complete the tax forms before submission to the IRS, and ensure compliance with the tax laws of the state. The role of an individual tax preparer can range from one of these duties to more than these, depending on their experience and seniority in the field. 

How can I become a tax preparer?

If you are a candidate who is seriously thinking about choosing tax preparation as a career, these are the eligibility criteria and the requirements you must pay heed to –

Educational Background

Becoming a tax preparer doesn’t ask you to have a college degree. But the basic requirement is that you must have completed your school. A high school diploma or even a GED can give you a thumbs up in this line to proceed ahead. Students of Accounts, Business and Math are more likely to excel here, as the field demands it. Although we mentioned that you don’t need a bachelor’s or a master’s degree, it can give you an edge in the job. Moreover, it makes you look more professional than other professionals your age and cadre.

Get the IRS in the loop

The primary requirement to become a tax preparer is to have a PTIN. PTIN stands for ‘Preparer Tax Identification Number’ which can only be acquired through IRS. If you are seriously applying for it, you will also be preparing for a screening process. Once they approve your application, you become an unenrolled preparer who can file the basic tax returns for clients. 

If you want to get an edge here and run a tax preparation business of your own, you may have to apply to the IRS for an ‘Electronic Filing Identification Number’, or simply EFIN. The screening is stricter here and the applicant may also have a background check via legal means. Once approved, they can also file e-returns for their clients. 

Get familiar with the state rules

Whichever state you live in, make sure you stay updated about the rules and regulations on the matter there. For example, if you are planning to become a tax preparer in New York, you must know if the state needs something more than an EFIN to legally consider you a practicing tax preparer. 

Get adequate training in the field

Since you will be swimming along with a lot of fish in the same pool, it is important to have something to set you apart from the rest. This is where your training plays a role. Community Colleges and Technical schools may be of help here. You can also work with a professional as a trainee and gain some experience you can show on your CV. Becoming a part of an Accreditation Program is also a good idea. They often cover the major topics of ‘Taxpayer Filing Status’, ‘Annual Filings’, ‘Tax Forms’, etc. 

These are the primary requirements for becoming an expert tax preparer. If you want to excel in the field, your experience will further give you a boost.