How to Become a Tax Preparer

By Dillon Price, Monster Contributor

Tax season is one of the most dreaded times of year for many taxpayers. But for tax preparers, the opportunities are boundless. When you learn how to become a tax preparer, you’ll help clients avoid penalties, save money on their tax bills, and increase their refunds. In a nutshell, you take the frustration and confusion out of tax season.

Tax preparers often enjoy flexible seasonal work, job security, and the ability to work remotely. Before applying for tax preparer jobs, read on to learn about what tax preparers do, the education and training you’ll need to become a tax preparer, and how much you’ll be paid.

What Is a Tax Preparer?

A tax preparer is a finance professional who prepares tax returns for individuals and businesses. Additionally, they ensure that clients are in compliance with local, state, and federal tax laws.

Full-time tax preparers typically work in accounting firms, law firms, and franchise tax businesses, while some are self-employed.

What Does a Tax Preparer Do?

Tax preparers organize, prepare, and file tax returns with state and federal agencies. They also assist clients with filling out tax forms, ensuring that the right documents are available, and calculating income gains and losses.

The typical day-to-day duties of tax preparers include:

  • Staying up to date on local, state, and federal tax laws.
  • Looking for legal deductions to help clients save or gain money.
  • Organizing financial records.
  • Providing tax advice to clients.
  • Utilizing tax preparation and bookkeeping software.
  • Monitoring tax deadlines and deliverables for multiple clients.

How to Become a Tax Preparer

Anyone with an IRS-issued Preparer Tax Identification Number (PTIN) can be a tax preparer. There are generally four routes you can take to become a tax preparer. These include:

  • Enrolled Agents: These are agents who are licensed by the IRS and have completed the three-part Special Enrollment Examination. They can work full-time, part-time, year-round, or seasonally.
  • Certified Public Accountants (CPAs): CPAs are accountants who have passed the Uniform CPA Examination and are licensed by state boards of accountancy. See Monster’s guide on how to become an accountant to learn what you’ll need for a CPA credential.
  • Attorneys: Attorneys have completed law school, passed a bar exam, and have obtained state licensure. Some attorneys specialize in tax preparation.
  • Non-Credentialed Tax Preparers: These are usually seasonal tax preparers who don’t have any specific credentials. Non-credentialed tax preparers often include people who work for tax preparation companies or volunteer through the IRS Annual Filing Season Program. Most states don’t require non-credentialed tax preparers to complete any tax-related courses.

Enrolled agents, CPAs, and attorneys have unlimited representation rights before the IRS. This means that they can represent clients on audits, appeals, and payment and collection issues.

Non-credentialed tax preparers have limited representation rights. They can only represent clients whose taxes they prepared before customer service reps, revenue agents, and similar IRS employees. They can’t represent clients on payments, collections, audits, or appeals.

You’ll also need certain skills to succeed in a job as a tax preparer, including:

  • Accounting and bookkeeping skills.
  • Customer service skills.
  • Keen attention to detail.
  • Knowledge of local, state, and federal tax laws.
  • Good communication skills.
  • Analytical skills.

Below, you’ll find information on the requirements for becoming a tax preparer by state and professional designation. That includes getting your PTIN and obtaining tax preparer certification.

IRS Requirements for All Tax Preparers

No matter which state you plan on working in, you must obtain a PTIN from the IRS. The application process can be done online and only takes about 15 minutes to complete. However, you can complete a paper form W-12 and mail it in if you choose to. It takes about four to six weeks to process paper applications.

If you plan on preparing and filing taxes electronically, you must follow these additional IRS requirements:

  • Submit an e-file application.
  • Pass a suitability check, which may check your credit, tax compliance history, criminal background, and prior non-compliance with e-file requirements.
  • Apply for an Electronic Filing Identification Number (EFIN).

How to Become a Certified Tax Preparer

Depending on which route you choose to take, tax preparer certification may be required.

If you choose the CPA route, you must have a bachelor’s degree in accounting or a related field. Then, you must pass the Uniform CPA Examination from the American Institute of Certified Public Accountants (AICPA) and obtain a license from your state accountancy board.

The Uniform CPA exam contains four key sections which you must score at least 75 on:

  • Auditing and Attestation
  • Business Environment and Concepts
  • Financial Accounting and Reporting
  • Regulation

To become an enrolled agent, you must pass the three-part Special Enrollment exam or gain work experience as an IRS employee. Enrolled agents are also required to apply for enrollment, adhere to specific ethical standards, and complete 72 hours of continuing education every three years.

How to Become a Tax Preparer in California

California is one of six states that require specific credentials for tax preparers. If you plan on working in California, you must do the following:

How to Become a Tax Preparer in Texas

Becoming a tax preparer in Texas is much easier than in California. Texas doesn’t require any specific licenses or educational credentials. However, it’s highly recommended to complete a tax preparation course at a community college or with H&R Block, Liberty Tax, or Jackson Hewitt.

How Much Do Tax Preparers Make?

According to Monster’s salary data, tax preparers earn a median hourly wage of $21.20. However, your wages could range from $15.50 to more than $30 per hour, depending on your experience level and location.

Find out how much tax preparers typically earn in your area by using Monster’s Salary Tool. Once you enter the job title and location into the search bar, you’ll find your pay range, median wage, salary information for similar jobs, potential next career steps, and locations where tax preparers are in high demand.

How to Find Tax Preparer Jobs

Now that we’ve prepped you on how to become a tax preparer, are you ready to put your best foot forward into a rewarding job?

Most non-credentialed tax preparers work between January 1st and April 15th of each year. The flexibility offered by seasonal tax preparation jobs often appeals to retirees, students, stay-at-home parents, or people looking to pick up extra work. If you’re looking for a seasonal tax preparer job, you should start looking the fall before the new year.

Credentialed jobs that involve tax preparation may offer year-round work in business tax preparation, bookkeeping, client representation before the IRS, payroll management, and tax preparer training.

Whether you’re looking for seasonal work or year-round job security, start by putting together a resume that highlights your key skills, qualifications, and experience. Take a look at Monster’s accountant resume sample to get a head start. Then, check out our cover letter tips for finance professionals.

And when your job application is ready to go, you can look for tax accountant jobs across the U.S. on Monster.

Looking to work somewhere specific? Tax preparers are in the highest demand in these five U.S. cities:

Get on the Books With a New Tax Preparer Job

Now that you know how to become a tax preparer, take the next step toward finding a job by signing up with Monster. We’ll notify you whenever a new tax preparer job becomes available in your area. Plus, we’ll make your resume easily accessible to job recruiters. Need tips on how to create a resume or ace an upcoming interview? We’ve got tons of career advice resources to help you with your job search.