If you have ever wondered what professional tax preparers do, what qualifications they require, and how to get started, you’ll find the answers to frequently asked questions on beginning a career as a tax professional.
All You Need to Know About Tax Preparers
The Job: In a nutshell, professional tax preparers assist individuals and corporations in filing their tax returns. These services are offered in exchange for a reasonable fee.
The Title: Tax preparers and accountants are terms that are sometimes used interchangeably, although they are very different. Not all tax preparers are accountants, and not all accountants are tax preparers. Similarly, some accountants do not assist with tax preparation at all.
The Season: Tax season is traditionally the most demanding time of year for tax preparers, and it is also when they earn the majority of their annual revenue. Many tax preparers make money throughout the year by handling business taxes or providing other services such as accounting, bookkeeping, or payroll processing.
The Tools: Professional tax preparation software is essential, allowing preparers to file taxes swiftly and accurately for individuals and businesses.
The Daily Functions of Tax Preparers
The specifics of a tax preparer’s to-do list may be slightly different from one another, but these are some of the most frequent duties that tax preparers accomplish during tax season and off-season:
Throughout the Tax Season
- Attending client meetings
- Using tax software for preparers and related applications to arrange returns
- Assisting clients with bank products and tax return advances to get refunds
- Getting in touch with clients who haven’t filed yet
During the Off-Season
- Tax return preparation for late filers
- Tax preparation for business clients
- Additional services such as bookkeeping or payroll
License and Certification Requirements for Tax Preparers
To become a legal tax preparer, you’re required to obtain a PTIN (Preparer Tax Identification Number) from the IRS. And because the IRS encourages individuals to only consult with certified tax preparers, many tax professionals pursue extra education and qualifications indicated below.
The Different Types of Tax Preparers
- Enrolled Agents (EA)
The IRS’s highest designation for professional tax preparers is Enrolled Agent status. These tax experts must pass a three-part test and complete continuing education every year to keep their certification.
- Certified Public Accountants (CPA)
CPAs are among the most highly qualified tax advisors. Although state standards differ, most demand a bachelor’s degree, two years of professional experience, a four-part exam, and graduate-level education. It’s important to note that not all CPAs operate as tax advisors.
- Other Tax Preparers and Annual Filing Season Program (AFSP) Participants
The AFSP allows non-credentialed tax preparers to continue their study. The IRS designed this optional program that “aims to recognize the efforts of non-credentialed return preparers who aspire to a higher level of professionalism.” Participants must complete 18 hours of continuing education, which includes a 6-hour Annual Federal Tax Refresher course.
The Time Commitment to Becoming a Tax Preparer
The tax preparation profession offers a low cost and experience barrier to entry, making it simple to get started even if you have no prior expertise. You may get started right away after applying for a PTIN with the IRS, and you can continue to pursue further education and qualifications as you go.
What It Takes to Become a Tax Preparer
If you’re interested in pursuing a profession in tax preparation, begin by:
- Getting a PTIN (Preparer Tax Identification Number)
- Obtaining an EFIN (Electronic Filing Identification Number)
- Choosing the Best Professional Tax Software
Conclusion
A tax preparer helps people and corporations prepare, calculate, and file their income tax returns. By choosing the best tax software, you can better master the work of tax preparation.
Keystone Tax Solutions offers the best professional tax software for tax preparers to help increase accuracy and ease complexity. Contact us today for a free demo!
