Most Americans dread April 15, but tax preparers can make tax season easier to manage. Tax preparers maneuver a maze of federal, state and local tax laws to help taxpayers complete their income tax returns. To handle the job’s responsibilities, tax preparers need specific skills and training. Tax preparers, also called tax advisors, tax consultants and tax associates, will see average job growth of 10 to 19 percent through 2020, according to the U.S. Department of Labor. I will show you all you need to know about Tax Preparer’s Career Information.
Duties
Tax preparers have several job responsibilities. Their work starts with interviewing taxpayers for information on taxable income and potential write-offs or credits. A review of financial records, including income statements and receipts, follows. Once they have a handle on a client’s obligations, tax preparers use IRS tax tables and computer programs to total the tax bill and determine the amount owed or overpaid. Where applicable, preparers use gross-income adjustments, deductions and credits to reduce clients’ final tax tab. Tax preparers also go over numbers on forms to verify that added amounts or data entries are correct. Preparers may work with both individual taxpayers and small businesses.
Characteristics
Tax preparers need several characteristics and skills to handle their duties. Math skills are key, because tax preparation is a numbers-heavy job that calls for an understanding of how to use arithmetic or algebra to solve problems. Critical thinking skills, such as logic and reasoning, are essential to coming up with solutions for complicated returns. To determine a client’s needs and convey important information about required documentation and return completion, tax preparers must have communications and listening skills.
Education
Tax preparers don’t need a college degree. Many community colleges and vocational schools offer programs that teach local, state and federal tax laws in as little as six months. The amount of coursework varies; some schools require 10 to 12 classes, while others set an educational standard of 90 hours of classroom work. Coursework typically includes classes on itemized deductions, retirement plans, tax planning, business expenses, payroll taxes and partnership taxation. Also, because tax laws change every year, the IRS requires paid tax preparers to take 15 hours of continuing education annually, including 10 hours of courses in federal tax law, three hours of federal updates and two hours of ethics.
Registration
The IRS requires all paid tax return preparers to register annually with the agency and obtain a Preparer Tax Identification Number. Once tax preparers have received their tax identification number, they must pass the IRS’ Registered Tax Return Preparer Competency Test, which includes questions on determining file status, adjusting gross income, choosing deductions and credits and understanding tax payments, among other subjects. Tax preparers are eligible to practice once they have their Registered Tax Return Preparer certificate. Renewal season is every fall, from October to Dec. 31. As of 2012, the annual cost to register was $64.25. Attorneys, CPAs and enrolled agents do not need to register annually with the IRS to prepare tax returns.
Pay
Tax preparers took home a median annual income of $32,320 as of May 2011, according to the U.S. Bureau of Labor Statistics. The bottom 10 percent of earners averaged $18,540, while the top 10 percent averaged $71,450. By industry, insurance carriers paid tax preparers the highest annual average income, at $58,390. Also paying above average were corporate headquarters, at $52,070, and financial investment activities, at $44,870. Tax preparers based in Massachusetts earned the highest annual average pay by state, at $58,990. Rounding out the top three were New Jersey, at $57,040, and Alaska, at $53,020.