Tax Preparers

Career summary

Tax preparers may also be called income tax advisors.

Tax preparers fill out tax returns for others for a fee. Their job is to complete the required forms using all the possible deductions to reduce their clients' tax debt. In larger firms, some tax preparers check forms and verify tax returns prepared by others.

Tax preparers first review clients' tax records to gather information about what forms to use. They look at previous years' tax returns, wage statements, and other tax records. They interview clients about their work, their expenses, and their investments. They also ask about events in the previous year that might affect clients' taxes, such as a new job.

Often tax preparers can complete the return at the interview with the client. They refer to tax tables and compute tax amounts. However, complex returns require more time. Sometimes tax preparers fill out detailed data sheets to be processed later. For unusual returns, tax preparers consult tax law handbooks or bulletins.

When returns are complete, tax preparers calculate their fee. They consider the complexity of the return and the time spent to complete it.

Tax preparers interpret current tax law for their clients. They also inform clients of the expected effects of new tax laws. Some tax preparers assist their clients with such matters as:

• Tax planning
• Recordkeeping
• Audits

Tax preparers who are enrolled agents with the Internal Revenue Service (IRS) may represent their clients at audits.

Related careers

This career is part of the Finance cluster of careers.

Related careers include:

• Accountants and Auditors
• Actuaries
• Bookkeeping and Accounting Clerks
• Credit Analysts
• Credit Checkers and Authorizers
• Insurance Adjusters and Examiners
• Insurance Policy and Claims Clerks
• Loan Clerks
• New Accounts Clerks
• Tax Examiners
• Title Examiners and Searchers

Job duties

Task list

The following list of tasks is specific to tax preparers.

• Review clients' tax records, such as wage statements and previous tax returns.
• Interview clients about income, expenses, investments, and other information.
• Fill out tax forms or data sheets.
• Compute tax amounts, using calculator or computer.
• Calculate preparation fee based on complexity of return and amount of time required.
• Follow tax instructions and tables, and consult tax law handbooks for unusual returns.
• May check returns and verify returns prepared by others, especially in larger firms.
• Inform clients of current tax law interpretation and the effects of new tax laws.
• May assist clients with tax planning, recordkeeping, audits, and other tax-related matters.

Common work activities

Tax preparers perform the following tasks. These tasks are common to many careers.

• Get information needed to do the job
• Use computers
• Update and use job-related knowledge
• Process information
• Perform for or work with the public
• Document and record information
• Establish and maintain relationships
• Evaluate information against standards
• Analyze data or information
• Identify objects, actions, and events
• Perform administrative tasks
• Organize, plan, and prioritize work
• Communicate with supervisors, peers, or subordinates
• Explain the meaning of information to others
• Make decisions and solve problems
• Communicate with people outside the organization
• Schedule work and activities
• Provide advice and consultation to others

Work requirements

Working conditions

In a typical work setting, tax preparers:

Interpersonal relationships

• Communicate with others by telephone, e-mail, and in person on a daily basis. They also write letters and memos, but less often.
• Have a medium level of social contact. They meet with clients, but spend much of their time working with forms and information.

Physical work conditions

• Often work indoors.
• Share office space with other workers.

Work performance

• Must be very exact in their work and be sure all details are done. Errors could cost clients money or cause legal problems.
• Make decisions on a weekly basis that strongly impact clients.
• They make some decisions without consulting a supervisor, but often get advice before acting.
• Repeat the same work activities.
• Determine some, but not all, of their daily tasks and goals without talking to a supervisor.
• Work in a competitive atmosphere where weekly deadlines must be met.

Hours/travel

• May work only during tax season, which is January through April.
• May work long hours, including evenings and weekends, during tax season.

Physical demands

Tax preparers frequently:

• Sit for long periods of time.
• Use their hands to handle, control, or feel objects, tools, or controls.

It is important for tax preparers to be able to:

• See details of objects that are less than a few feet away.
• Understand the speech of another person.
• Speak clearly so listeners can understand.

It is not as important, but still necessary, for tax preparers to be able to:

• Use fingers to grasp, move, or assemble very small objects.
• See details of objects that are more than a few feet away.
• See differences between colors, shades, and brightness.

Skills and abilities

Tax preparers need to:

Communicate

• Understand spoken information.
• Understand written information.
• Listen to others and ask questions.
• Read and understand work-related materials.
• Speak clearly so listeners can understand.
• Write clearly so other people can understand.

Reason and problem solve

• Use reasoning to discover answers to problems.
• Analyze ideas and use logic to determine their strengths and weaknesses.
• Combine several pieces of information and draw conclusions.
• Follow guidelines to arrange objects or actions in a certain order.
• Notice when something is wrong or is likely to go wrong.
• Judge the costs and benefits of a possible action.
• Recognize the nature of a problem.
• Develop rules that group items in various ways.
• Understand new information or materials by studying and working with them.

Use math and science

• Choose a mathematical method or formula to solve problems.
• Add, subtract, multiply, and divide quickly and correctly.
• Use math skills to solve problems.

Manage oneself, people, time, and things

• Check how well one is learning or doing something.

Work with people

• Be aware of others' reactions and understand the possible causes.
• Look for ways to help people.

Education and training

Educational programs

The programs of study listed below will help you prepare for the occupation or career cluster you are exploring.

Programs of study directly related to this occupation

• Taxation

Other programs of study to consider

• Accounting Technology and Bookkeeping
• Entrepreneurial and Small Business Operations
• Finance
• Office Management

Training

To work as a tax preparer, you typically need to:

• have a high school diploma or equivalent; and
• complete moderate-term, on-the-job training.

Education after high school

A college degree is not required. However, you need formal training in tax preparation. Community colleges and business schools provide these programs. You generally receive a certificate upon completing the course. College-level courses in economics, business, and computers can be helpful.

Work experience

While specific experience is not required, jobs working with people and paperwork are good preparation for this occupation.

On-the-job training

Employers train tax preparers in tax law, forms, and procedures. They also provide training in office procedures and tax software. Training can last up to one year.

Helpful high school courses

In high school, take classes that prepare you for college. A college preparatory curriculum may be different from your state's graduation requirements.

You should also consider taking some advanced courses in high school. This includes Advanced Placement (AP) and International Baccalaureate (IB) courses if they are available in your school. If you do well in these courses, you may receive college credit for them. Advanced courses can also strengthen your college application.

Helpful electives to take in high school that prepare you for this career include:

• Accounting
• Computer Applications
• Economics
• Office Procedures

Many tax preparers are self-employed. If you want to run your own business some day, you should consider taking these courses as well:

• Accounting
• Entrepreneurship
• Introduction to Business

The courses listed above are meant to help you create your high school plan. If you have not already done so, talk to a school counselor or parent about the courses you are considering taking.

You should also check with a teacher or counselor to see if work-based learning opportunities are available in your school and community. These might include field trips, job shadowing, internships, and actual work experience. The goal of these activities is to help you connect your school experiences with real-life work.

Join some groups, try some hobbies, or volunteer with an organization that interests you. By participating in activities you can have fun, make new friends, and learn about yourself. Maybe one of them will help direct you to a future career. Here are examples of activities and groups that may be available in your high school or community.

Things to know

Employers may prefer to hire tax preparers who have training in accounting. Employers may also prefer applicants with a bachelor's degree. Some employers prefer to hire applicants who are enrolled agents with the Internal Revenue Service (IRS).

Employers prefer applicants who are friendly and helpful and can get along with all types of people. They also prefer applicants with good math skills who can work quickly and accurately under pressure.

Applicants must be familiar with current tax laws. Tax accounting courses are offered by some tax service businesses. Graduates of these courses are often offered positions as seasonal tax advisors/preparers.

Tips

Get involved with DECA or Junior Achievement while in school. Familiarity with current tax codes and work experience as a seasonal tax preparer is helpful. Obtain certifications in as many areas as possible.

Cost to workers

Tax preparers may wish to join a professional association, which may have annual dues. Most tax preparers pay for continuing education seminars and tax publication subscriptions. If you are self-employed, there will be costs associated with setting up a business.

Licensing/certification

All tax preparers must be registered with the Internal Revenue Service and have a preparer tax identification number (PTIN). Preparers must pay a user fee for their PTIN.

Preparers who are certified as enrolled agents can legally represent clients at audits before the IRS. To become an enrolled agent, applicants must have approved past IRS service and technical experience or have passed an exam. Both tracks for becoming an enrolled agent require a suitability and background check. The written exam has three parts. There are no education or experience requirements for taking the exam. However, the exam covers college-level tax accounting questions. More information about the exam is available from any district IRS office. Enrolled agents also must take a minimum of 16 continuing education courses annually and renew their certification every three years. Tax preparers who are not enrolled agents are much more restricted by the IRS in the duties they can perform.

Visit this website for more information applicable to all tax preparers:
https://www.irs.gov/tax-professionals 

#2/18/20

Job listings

Listed below are links to job categories from the National Labor Exchange that relate to this career. Once you get a list of jobs, you can view information about individual jobs and find out how to apply. If your job search finds too many openings, or if you wish to search for jobs outside of Washington, you will need to refine your search.

• Tax Preparers 

To get a listing of current jobs from the WorkSource system, go to the WorkSource website .

Wages

Some tax preparers work much longer hours during the busy tax season. Some may work only during tax season. Some tax preparers work on commission rather than for a wage. All of these factors affect how much tax preparers earn.

Wages vary depending on the education and experience of the tax preparer. Wages also vary by employer and area of the country.

Full-time tax preparers who work year round usually receive benefits. Typical benefits include sick leave, paid vacation, and health insurance. Self-employed tax preparers must provide their own insurance.

Employment and outlook

Washington outlook

The table below provides information about the number of workers in this career in various regions. It also provides information about the expected growth rate and future job openings.

National employment

About 17% of tax preparers are self-employed.

Major employers:

• Accounting, auditing, and bookkeeping firms
• Tax return preparation firms

National outlook

Demand for this occupation is growing as fast as average. Frequent changes to complex laws send people to tax preparation services for help.

Job openings occur as people leave the occupation to retire or for other reasons. Job prospects are best for those with formal training.

Other resources

National Association of Enrolled Agents 
1730 Rhode Island Avenue, NW, Suite 400
Washington, DC 20036-3953

National Association of Tax Professionals 
PO Box 8002
Appleton, WI 54912-8002
800.558.3402

National Society of Accountants 
1330 Braddock Place, Suite 540
Alexandria, VA 22314
800.966.6679
703.549.6400

National Tax Association 
1100 Vermont Avenue, NW, Suite 650
Washington, DC 20005
202.737.3325

References

Career cluster

• Finance

Career path

• Conventional (Business Operations)

O*Net  occupation

• Tax Preparers (13-2082.00) 

O*Net job zone 

• Job Zone 3 - Medium preparation needed. Previous work-related skill, knowledge, or experience is required for these occupations.

DOT occupation

• Tax Preparer (219.362-070) 

Holland occupational cluster

• Conventional/Enterprising/Social

COPSystem

• Business Skilled