Education and Training: High school plus training
Salary: Median—$32,000 per year
Employment Outlook: Good
Definition and Nature of the Work
Tax preparers work for independent or franchised tax preparation services and sometimes for lawyers or accountants involved in tax work. They use their knowledge of federal, state, and local tax codes and publications to prepare tax returns and make sure that their clients do not pay unnecessary taxes. Tax preparers usually specialize in preparing tax returns for individuals rather than for businesses or corporations.
Tax laws are subject to frequent change and vary from one area to another. For example, some states have community property laws that affect the taxes owed by married couples who file joint returns. Tax preparers must be aware of all the provisions and annual changes in the tax laws to advise their clients competently.
Tax preparers work intensively from January to April, which is considered the tax season. Evening and weekend work is required during this period to complete the workload. Because work tapers off after April 15, the annual deadline for submission of tax returns, few workers are employed full time as tax preparers for the entire year. Many work at other occupations during the remaining months or moonlight as tax preparers during tax season.
If the Internal Revenue Service (IRS) or the courts have reason to question the legitimacy of an individual's tax return, the tax preparer may testify about the preparation of the tax return. Tax preparers who have taken a special examination given by the IRS may represent their firm's clients before the IRS during a tax audit.
Tax preparation involves considerable research and attention to detail, so an ability to read quickly and thoroughly is essential. In addition, tax preparers must have an aptitude for working with figures and mathematical formulas. Because tax preparation firms use computers to complete clients' tax returns, familiarity with computer technology is also helpful.
Education and Training Requirements
Applicants must have a high school diploma as well as a thorough knowledge of tax laws and proficiency in math and computer applications. Many tax preparers have college training. Courses in accounting and business math provide useful preparation. Because tax laws are revised every year, preparers must continue their professional education. The National Association of Tax Practitioners offers continuing education classes yearly.
Getting the Job
The best way to get a job as a tax preparer is to apply directly to tax preparation services. Classified ads in local newspapers and ads on the Internet may also offer job leads.
Advancement Possibilities and Employment Outlook
Tax preparers can advance by taking the IRS-sponsored Special Enrollment Examination. Passing this exam enables tax preparers to represent their clients formally before the IRS during tax investigations or audits. Some experienced tax preparers open their own tax preparation services.
According to the U.S. Bureau of Labor Statistics, eighty-six thousand tax preparers were employed in the United States in 2004. Employment of tax preparers was expected to grow about as fast as the average for all occupations through the year 2014. These workers will be in demand as individuals continue to seek outside help in preparing their tax returns.
Tax preparers usually work in the office of their firm. They may travel to meet with their clients or to visit libraries or government offices. Beginners usually work under the close supervision of an experienced tax preparer. After gaining experience, they work independently.
Tax preparers must be able to work rapidly, accurately, and under pressure, because they must often meet tight deadlines. They should enjoy working with the public, because an important aspect of their work involves face-to-face consultations with clients.
Where to Go for More Information
National Association of Tax Professionals
720 Association Dr.
PO Box 8002
Appleton, WI 54912-8002
Earnings and Benefits
Tax preparers can work on a commission basis. Their commission is usually a percentage of the fee charged to the client and depends on the preparer's experience and the complexity of the tax return. In their November 2004 Occupational Employment Statistics survey, the Bureau of Labor Statistics reported that the median annual salary for tax preparers in 2004 was $32,000. Because tax preparers generally are hired for only part of the year, few tax preparation firms offer benefits to their workers.