How to Become a Tax Return Preparer
Becoming a tax return preparer can be a rewarding career choice for those who have a keen interest in finance, accounting, and helping others navigate the complexities of tax laws. If you’re considering a career as a tax return preparer, here’s a step-by-step guide to help you get started.
1. Education and Training:
First, it’s essential to have a solid foundation in accounting, finance, or a related field. While there’s no specific degree requirement, many tax preparers have a bachelor’s degree in accounting, finance, or a related field. You can also benefit from completing a tax preparation course, such as the one offered by the IRS.
2. Obtain an IRS Preparer Tax Identification Number (PTIN):
The IRS requires all tax return preparers to obtain a PTIN. This number identifies you as a tax return preparer and is required for you to prepare tax returns for compensation. To obtain a PTIN, visit the IRS website and complete the application process.
3. Pass the IRS Tax Return Preparer Competency Examination:
In addition to obtaining a PTIN, you must pass the IRS Tax Return Preparer Competency Examination. This exam tests your knowledge of tax laws and regulations and is designed to ensure that you are competent in preparing tax returns. You can take the exam online or at a designated testing center.
4. Obtain Continuing Education Credits (CE):
Once you become a tax return preparer, you must complete continuing education credits (CE) to maintain your PTIN. The IRS requires tax preparers to complete 15 hours of CE every three years, including three hours of ethics training. You can find CE courses through various tax preparation software providers, educational institutions, and professional associations.
5. Gain Experience:
While experience is not a strict requirement for becoming a tax return preparer, it can significantly enhance your job prospects. You can gain experience by volunteering to prepare tax returns for friends, family, or at local community centers. You can also work as an intern at a tax preparation firm or accounting firm to gain practical experience.
6. Consider Certification:
While not mandatory, becoming a Certified Public Accountant (CPA) or an Enrolled Agent (EA) can give you a competitive edge in the tax preparation field. CPAs must pass a rigorous exam and meet specific education and experience requirements. EAs are licensed by the IRS and must pass an exam and meet specific experience requirements.
7. Build a Network:
Networking with other tax professionals can help you learn best practices, stay up-to-date on tax laws, and expand your client base. Attend tax preparation seminars, join professional associations, and participate in online forums to connect with other tax preparers.
Becoming a tax return preparer requires dedication, education, and a passion for helping others. By following these steps, you can build a successful career in tax preparation and make a positive impact on your clients’ financial lives.
