Becoming a tax preparer is the most demanding career path today. The main reason behind it is that there are a lot of opportunities in this career where you are not bound to do work from one specific place as you can work for a firm but also you can work as an independent contractor in this field, you will be free to do your work from anywhere. If you are considering pursuing a career as a tax preparer it will be a good choice. Continue reading this blog to learn more about how to become a tax preparer and what it takes to become a tax preparer.

What Does a Tax Preparer Do?

Tax preparers have multiple responsibilities from preparing and filing taxes to helping clients with tax-related forms. Apart from these basic responsibilities tax preparers also represent taxpayers in audits or court-related issues with the IRS. Still, the main thing to consider here is their ability to do so depends on their credentials and the level of certification they have. 

The important role of tax preparers requires them to balance the interests of both their clients and the IRS. While helping individuals and businesses comply with tax laws and reduce their tax burden, they should also keep an eye on regulating and ensuring accuracy in reporting. Tax preparers must avoid actions that can lead to legal issues.

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How Much Do Tax Preparers Earn?

The topic of becoming a tax preparer always comes with a question how much do tax preparers earn? Tax preparation salaries can vary based on experience, location, and the type of client you are serving. Tax preparers with entry-level experience may start from $29,000 per year, while median-level professionals may earn around $58,000. On the other hand, highly experienced tax preparers can earn up to $98,000 or more. You should keep in mind that there is no fixed amount you can earn as a tax preparer because it depends on the level of experience you have, the location you working on as a tax preparer who specializes in complex filings or running their own businesses can earn even higher incomes.

Most Common Tax Forms and Types of Tax Returns Prepared by a Tax Preparer

The type of tax return a tax preparer works on depends on their experience and the clients they serve. Tax returns generally fall into two main groups, one is individual returns (Form 1040) for personal income taxes and the second is business returns for companies, partnerships, and trusts.

Commonly, tax preparers at the beginning of their career start by handling individual tax returns, and the reason behind this is they are easier to manage, and doing great at the start can help them get clients. After a certain period, some tax preparers continue to work with individual tax returns, while others gain experience and gradually move toward handling business taxes, which often pay more and also a door to big opportunities.

How Long Does It Take to Become a Tax Preparer?

The time it takes to become a tax preparer comes down to how quickly you apply for (and receive) a PTIN and an EFIN. But the main question here is how long it takes to gain enough experience and skill to build a successful career in tax preparation.

For most of the people, it takes about two tax seasons to learn the fundamentals. The learning process is the same if you begin at a firm or work independently. Beginners in the first year may spend a lot of time doing data entry. By the second year, they start handling more tasks independently. By the third year, they usually have enough knowledge and experience to work as a full-time tax preparer. Beyond the basics, it takes about five years to develop skills and expertise in specific tax situations.

What do you need to know to become a Tax Preparer?

Becoming a tax preparer is an easy process once you understand the basic requirements you need. 

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Learn the Basics of Taxes

At the early stages of your career, you will need to learn the basics of tax preparation. Many beginners take courses or get certified to build their skills. A good certification or tax research tool can also help you stay updated and fill in any knowledge gaps.

Using Right Softwares

Having the right software makes tax preparation faster and easier. The highly expert tax preparers use AI-powered tax software to handle returns, as it helps keep things organized and also avoid mistakes.

Find Your First Clients

To become successful in your career as a tax preparer, you need to get clients. For this many tax preparers start at a very small scale handling individual tax returns and getting clients. This helps you get clients and handling individual returns gives you more experience. After getting experience, you can switch to more complicated returns and it will eventually open more opportunities for you.

Preparer Tax Identification Number

If you want to get paid for preparing tax returns, you’ll need a Preparer Tax Identification Number (PTIN) from the IRS. It’s a simple but necessary step to work legally as a tax preparer.

How do you get a PTIN?

The IRS requires all tax preparers to have a PTIN. You can apply for one through the IRS website by creating an IRS account and completing the online application. There is no fee for this process or the registration. Once a PTIN is issued, you must put this on every return you prepare. You can get more detailed information on the IRS website to know what their requirements for tax preparers are.

Do you need a License to prepare tax returns?

You do not need any license to prepare tax returns but if you want representation rights for IRS you need to be an enrolled agent or CPA. An Enrolled Agent (EA) is a tax professional authorized to represent clients before the IRS.

Some states require tax preparers to obtain additional licensing. For example, California, Maryland, and Oregon have mandatory tax preparer registration programs. Check your state’s requirements before starting your practice.

Work for a Tax Preparation Firm

Large firms, or independent CPA firms frequently hire tax preparers, offering structured training and steady work. If you prefer independence, you can start your own tax preparation business. This allows you to set your own rates, choose your clients, and work on your schedule.

Note that many tax preparers work seasonally, helping individuals and businesses file taxes during the busy tax season (January–April).

Final Thoughts

Becoming a tax preparer is a great career to work for. It does not matter if you are working for a firm or running your own business, it will benefit you in both. By following the steps I provided you, you can start working on your career as a tax preparer. To gain long-term success as a tax preparer you need to work for individual returns and get clients. Once you gain hands-on experience you can move forward to more complex and highly paid returns.