How To Become a Tax Preparer

We have always been asked this question, “How to become a tax preparer?” by fresh high school graduates and experienced professionals in various fields – and can’t blame them. According to the United States Bureau of Labor Statistics, tax preparers earn an average annual salary of $44,730 (2015), while the projected job growth for 2014 to 2024 is 2% per year.  

The bottom line: Becoming a tax preparer is, indeed, a smart career move! You can find jobs in companies like Jackson Hewitt, H&R Block, and Liberty Tax Service, the three largest tax preparation companies in the United States. You can also become an independent tax preparer catering to the needs of individuals, small and medium-sized businesses, and even charitable organizations.  

Whatever career path as a tax preparer you choose, you have to start on the right foot. Here’s how you can start in three steps.  

Earn a High School Diploma

In the tax schools of the three abovementioned tax preparation companies, the main education requirement is a high school diploma. You will then rub elbows, so to speak, with college graduates and professionals during your tax preparation classes. But don’t be intimidated because you’re all in the tax school to learn so focus on it.  

Furthermore, you can hold your own when you have strong abilities in computer science, math, and finance as well as strong communication skills. You have the opportunity to develop them while you’re still in high school or when you’re in your current job. You can also read tax-related books so that you enter a tax training program with basic knowledge.  

Of course, college graduates and professionals are welcome to enroll in tax training programs. If you belong to this group, you may be planning on a new career path or you may be taking the tax course as part of your continuing education.  

Enroll in a Tax Training Program

With dozens of organizations offering tax preparer training courses, you should have an easy time finding one that suits your needs in it. These include the three largest tax preparation companies – Jackson Hewitt, H&R Block, and Liberty Tax Service – as well as vocational schools, technical colleges, and community colleges.  

No matter your choice in a program, you have to check that it is, indeed, approved as continuing education provider by the Internal Revenue Service (IRS). We can assure you that the three tax preparation companies have said approval so enrolling in one of them will be to your advantage, not to mention that you may be able to land a job with one of them.  

Keep in mind that you’re a student and, as such, you have to deliver on your rights and responsibilities while you’re in the tax preparer training program.  You have to attend the classes, pass the quizzes and tests, and do your homework –neither spoon-feeding nor mediocre performance is allowed.  

Register with the IRS and the State

Tax preparers are required to comply with the registration requirements issued by their respective states and by the federal government. Since requirements vary by state, you have to check with your state authorities so that you can obtain the appropriate requirements and comply with them. You may also check the IRS official website where these matters are discussed.  

The general guidelines include:

  • Tax preparers should obtain their respective Preparer Tax Identification Number (PTIN) as a requisite for accepting fees for their services. The PTIN application requires the submission of the individual’s personal information, social security number, and previous year’s tax return.  
  • Tax preparers with PTIN but aren’t attorneys or certified public accountants (CPA), among other enrolled agents, are known as unenrolled preparers. They are limited to filing specific tax returns only as well as limited to representing their clients to the basic audit level at IRS summons.  

But it isn’t just compliance with the legal requirements in how to become a tax preparer. You have to acknowledge the dedication and drive it takes to become one and to maintain your status.