CareerExplorer’s step-by-step guide on how to become a tax preparer.

Step 1

Is becoming a tax preparer right for me?

The first step to choosing a career is to make sure you are actually willing to commit to pursuing the career. You don’t want to waste your time doing something you don’t want to do. If you’re new here, you should read about:

What do tax preparers do?
Career Satisfaction
Are tax preparers happy with their careers?
What are tax preparers like?

Still unsure if becoming a tax preparer is the right career path? to find out if this career is right for you. Perhaps you are well-suited to become a tax preparer or another similar career!

Described by our users as being “shockingly accurate”, you might discover careers you haven’t thought of before.

Step 2

High School

Prepare for the job in high school by cultivating strong math skills, basic computer skills, customer service abilities, and a very basic understanding of tax regulations, and tax forms.

Step 3

Tax Training

After obtaining a high school diploma, aspiring tax preparers typically complete some form of tax training at a technical college or vocational school; through the Accreditation Council for Accountancy and Taxation (ACAT) or the National Association of Tax Professionals (NATP); or on-the-job with an employer.

Coursework commonly covers filing status, standard deductions and exemptions, taxable benefits, tax schedules, refund calculation, taxpayer interviews, electronic filing, and state-specific tax codes.

Programs aimed at full-time professional tax preparers go beyond teaching the preparation of individual tax returns. They include instruction in corporate and small business quarterly filings, payroll taxes, estate taxes, capital gains, retirement plans, and other advanced topics.

Since the tax-preparation field requires direct contact with clients, employers tend to value job candidates with proven speaking and writing skills. Taking additional courses in communication is therefore recommended.

Though not required, an Associate’s degree or Bachelor’s degree in accounting or business may expand employment opportunities.

Step 4

IRS & State Registration

Before tax preparers can begin working in the field, they must meet federal and state requirements.

Firstly, they must apply to the IRS for a Preparer Tax Identification Number (PTIN). To submit an application, preparers must pay a $50.00 fee and provide personal information including their social security number and their previous year’s tax return. Once they receive a PTIN, tax preparers are registered as an ‘unenrolled preparer,’ granting them the minimum level of clearance to prepare federal taxes. Unenrolled preparers are limited to filing only certain types of tax returns and cannot represent their clients before the IRS beyond the basic audit level.

The PTIN allows the IRS to keep track of tax preparers and spot fraud or other illegal activities. The application requires disclosure and explanation of any felony convictions or past issues relating to tax obligations and can be completed online.

Tax preparers must include their PTIN on all tax returns that they sign. Preparers who do not sign tax returns and are supervised by a certified public accountant (CPA), attorney, or enrolled agent (see Step 4, below) are exempt from this regulation.

Individual states set their own requirements for registration and licensure of tax preparers. Some states require only that tax preparers have a valid PTIN, while others mandate education and testing. Preparers who are CPAs, attorneys, or enrolled agents (see Step 4, below) may be exempt from some state registration requirements.

To become an authorized electronic or e-file Provider, tax preparers must submit a separate application to the IRS and undergo a screening process. Electronic Filing Identification Numbers or ‘EFINs’ are issued to individuals or firms. Ordinarily, individual employees of a tax preparation service would not have an EFIN; the firm would generally have a single EFIN.

Step 5

Consider Becoming an Enrolled Agent

Enrolled agents can file returns for and represent all types of taxpayers. To become an enrolled agent, tax preparers must pass a three-part examination (the Special Enrollment Examination) that tests knowledge of individual tax returns, business tax returns, and representation of clients before the IRS. In addition to passing this exam, enrolled agent candidates must pass a compliance check on their tax history. Once licensed, these agents must complete sixteen hours of continuing education annually to maintain their status.

Step 6

Voluntary Certification

The Accreditation Council for Accountancy and Taxation (ACAT) administers an examination and grants the Accredited Tax Preparer (ACT) credential. Although the certification is voluntary, it demonstrates a tax preparer’s expertise in tax codes and regulations, which may increase employment opportunities.

To be eligible to sit for the examination, preparers must have at least three years of experience. ACAT considers one tax season, lasting from January to April, to be the equivalent of a year of experience. The Council also allows college credit to account for up to two years of experience.

How to become a Tax Preparer

Tax preparers typically hold a high school diploma or equivalent. There are no other strict educational requirements to enter the field. Some employers provide on-the-job training, while others may prefer to hire candidates with some postsecondary education.

Community colleges and some universities offer certificate programs that qualify students for entry-level positions. Professional organizations such as the Accreditation Council for Accountancy and Taxation (ACAT) and the National Association of Tax Professionals (NATP) also provide training in tax regulations and tax return preparation. Many of the larger income tax preparation firms run in-person classes prior to tax season to train additional staff for temporary jobs.

Prospective tax preparers must register with the Internal Revenue Service and obtain a preparer tax identification number. Some states stipulate that they complete a certain number of hours of tax instruction and pass a written exam.