Tax Preparer Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of a tax preparer. Feel free to use our tax preparer job description template to produce your own. We also provide you with information about the salary you can earn as a tax preparer.
Who is a Tax Preparer?
Tax preparation refers to the process of filling out tax returns with financial information. This helps to determine tax liability and to find out if taxpayers owe money or are entitled to a refund. If taxpayers are not confident about their tax returns or wish to make savings on taxes, they can hire professionals to help them. Tax preparers who are licensed to practice must be certified and can provide details about their training and certifications to customers upon request.
Tax preparation involves obtaining the right tax form for each taxpayer, as well as any worksheets or paperwork. This may not be a problem for some people, who can simply use the basic tax forms without additional paperwork. Some people may have more complex tax issues since they run businesses or handle complex income.
Tax preparers are financial professionals who prepare and file tax returns for individuals and businesses. They meet with clients to collect their tax information such as marital status, children, dependents, salary, and any other taxable income, among other requirements by the Internal Revenue Service (IRS). They then fill out, sign, and file the necessary forms according to state and federal tax codes. Tax returns can be very complicated and many people and businesses hire tax preparers to get the best tax refund possible.
Tax preparers complete tax forms that are submitted to the Internal Revenue Service (IRS). Individuals and/or small businesses can be clients. However, a tax preparer might only work for one employer.
Certified or uncertified tax preparers are trusted sources of financial assistance. They can be trusted with sensitive information about a client’s marital status and annual income, as well as Social Security or Medicare deductions from their paychecks. The tax season is the busiest season for tax preparers, and it runs from January to April.
Every year, tax returns must be filed by individuals and businesses. There are many types of tax professionals. Each one has a different level of experience and is appropriate to each individual’s tax situation. All tax preparers paid by the Internal Revenue Service (IRS), must be registered. All tax preparation professionals must have a Preparer Tax Identification Number, or PTIN, and include it on any returns they sign.
Here’s a list of all the different types of tax preparation professionals.
- Tax preparers for chains or local outlets
This is a part-time job for many tax preparers, but they only work four months a year. This may be the most affordable option for an individual whose return is simple. Some preparers might not have the necessary experience and knowledge to maximize deductions if the return is complex.
- Enrolled agents
These professionals have been licensed by the federal government and must have been IRS employees for at least ten years or passed an IRS exam. They are required to complete credit hours each year in tax regulations, accounting methods. They are skilled in tax planning and preparation of tax returns. Numerous enrolled agents are experts in one tax area and can help individuals with any questions regarding their tax returns.
- Certified Public Accountants
These professionals can help individuals navigate complex financial situations. A certified public accountant might be the best choice for someone who has recently retired, closed, or started a business, divorced, or experienced other major lifestyle changes that could have an impact on their financial situation. Certified public accountants can create a comprehensive tax plan for individuals and represent them before the IRS. A staff member with a few years’ experience will do the initial work in a large or mid-sized firm. The work will be reviewed by a more experienced person. Senior members of the firm will focus on matters such as planning (tax laws can be complex, so there are many ways to reduce taxes), and making decisions about more complicated issues.
- Tax Attorney
Most tax attorneys work with clients with large assets or business dealings. They also help those who want to shelter a portion of their income. These tax experts are skilled in complex corporate issues, have a good understanding of tax laws, and can resolve tax disputes. They may not be as skilled in the actual preparation of tax returns.
Tax preparers can work for a variety of organizations such as law firms, franchise tax companies, accounting firms, and many others. Seasonal tax workers may also have other jobs that they do year-round. Tax preparation work is an additional shift that they do during tax season. This means their workday can last between 12 and 14 hours.
Tax Preparer Job Description
Below are the tax preparer job description examples you can use to develop your resume or write a tax preparer job description for your employee. Employers can also use it to sieve out job seekers when choosing candidates for interviews.
The duties and responsibilities of a tax preparer include the following:
- Assisting with administrative tasks, such as answering phones and setting up appointments.
- Collecting and organizing confidential information about clients’ income, expenses, and allowances.
- Understanding the tax laws of both federal and state, including adjustments, credits, and deductions.
- Double-checking data entry and math equations to ensure they are correct.
- Working with accounting and financial software
- Reviewing previous tax returns and financial documentation to find missing or insufficient information.
- Calculating taxes due or refunds due to the client.
- Consulting tax law publications for guidance in unusual situations.
Qualifications
Education
Many companies require tax preparers to have a minimum educational requirement which is a high school diploma. They also prefer candidates who have taken courses on tax preparation and accounting. Accounting firms may require an associate’s degree or a bachelor’s degree in business or accounting if they are looking for skilled tax preparers.
Training
Many tax preparers are provided with training on the job in accounting, taxation, and data management. Tax preparers may take online courses or go to vocational school to learn the skills needed to perform their job. To be able to answer clients’ queries, they might also research tax laws.
These organizations can offer high school students the training and support they need to become tax preparers:
- Accreditation Council for Accountancy and Taxation
- The National Association of Tax Professionals, (NATP).
Certification
All tax preparers need to have a Preparer Tax Identification Number or PTIN from the IRS. Simply visit the IRS website to obtain your PTIN. The IRS will issue you a PTIN that you can use for every tax return that you prepare or sign. You might be required to become certified to qualify for advanced tax preparation jobs.
A state license to become a certified public accountant (CPA), requires completion of accounting courses or a degree in accounting and passing the Uniform Certified Public Accountant Examination.
An enrolled agent (EA), a federal license, requires passing the Special Enrollment Examination. These professionals can represent clients in taxation matters with this certification.
To maintain your certifications, both certificates require that you complete a set number of continuing education hours each year.
To show dedication to their profession and their commitment to learning, tax preparers may also consider becoming a member of one of the many professional associations. These associations include:
- American Institute of Certified Public Accountants
- National Association of Tax Professionals
- National Association of Enrolled Agents
- Institute of Management Accountants
- National Society of Accountants
Essential Skills
- Time Management
High productivity is essential for business success. Great time management is one of the best ways you can ensure high productivity in your tax prep office.
Your time should be balanced between serving existing clients, bringing on new clients, and managing different tasks necessary to run your office. You will need to manage payroll, employee reviews, training, and reviewing your email correspondence.
To make these tasks more efficient, you should create standard procedures and systems. You won’t spend too much time trying to figure out what you should do each day if you have a system. Each task will have a standard answer.
You may need to take time to decide the procedures and systems that your office should use. Your office will be able to accomplish more tasks quickly and efficiently once you have these in place. This will increase productivity.
It is important to prioritize certain tasks over others. Time management is about prioritizing tasks. This skill can be learned as you practice tax preparation.
- Organization
Good organizational skills are also essential for productivity. Tax preparers must manage large amounts of information, including IRS forms, client records, emails, and other documents.
You should also have an organized calendar for appointments before you book a client meeting. This will avoid scheduling conflicts.
You must also ensure that each client has a tax folder organized. You may be provided with many tax documents, financial records, and other files by the client. These documents should be filed correctly, secured and safe.
It is important to learn organizational skills. You don’t need to do it all yourself. It is important to find people who can help you organize. This is part of a good organization! Being able to delegate tasks to others!
- Customer Service skills
Tax preparation is a service-oriented industry. Tax preparation is not about completing tax returns accurately and efficiently. However, it’s more than fulfilling basic obligations. It is important to not neglect customer service.
What does this mean? This means that you want to provide a positive customer experience. It all comes down to the way you treat customers. Clients will feel happier when you give your complete attention to them.
Customers should feel at home in your office. They should feel they can trust you to do a great job and that all their information is kept confidential.
This requires skills that not all tax preparers may possess. You will need to find people who are skilled in this field if you are having difficulty.
- Problem-Solving skills
A winning mindset is essential in tax preparation. This means looking at problems as opportunities are being determined to find the best solutions. If you allow yourself to be overwhelmed by anxiety and negativity, you won’t be able to solve problems well.
Your clients will need you to prepare their tax returns. This involves figuring out which deductions they can claim as well as how to claim them (i.e. standard deduction vs. detailed deduction). It is essential that you fully understand your client’s financial situation. You will also need to be familiar with tax regulations applicable to your client’s case.
Tax preparers must also be ready to solve problems. Many issues could arise. Computer problems could occur at a workstation. Sometimes, a simple tax return can prove to be more challenging than anticipated.
You should also review your processes and systems often. With this, you might be able to find a more productive and efficient way to do something.
- Software literacy
Tax preparation offices today handle virtually everything digitally. Professional tax preparation software is used to complete tax returns and is submitted to the IRS electronically–that’s e-filing. The client documents are then scanned and sent electronically. They can be stored on computers and cloud platforms.
Software tools are essential for day-to-day office tasks. These include web browsers and word processors as well as spreadsheets, databases, document managers, digital calendars, messaging apps, and document managers. Remote office setups are becoming more common. Video conferencing apps like Zoom, Skype, and Slack will allow you to communicate with clients or team members.
Every tax preparer should be able to use software literacy. You must be able to use different programs with confidence. It is also imperative to adhere to the best digital security practices.
Software literacy is about knowing how to use the tools that you need to make your tax practice run more efficiently. These tools include professional tax preparation software such as UltimateTax and tax office management software like ProClient. Before you sign up for a subscription, you can download a free trial version.
How to Become a Tax Preparer.
You can apply for jobs as soon as you graduate high school if you can use your math, computer, and customer service skills. You can gain more job opportunities by gaining experience or training.
These are some steps to becoming a tax preparer.
- Complete entry-level education.
To become a tax preparer, you must earn your high school diploma and pass the General Educational Development test (GED). Tax advanced math courses are available, as well as those who practice taxation and statistics.
- Gain customer service experience.
Employers prefer candidates with at least one year of experience in customer service, retail, administration, or similar positions. These positions can be a great way to improve your problem-solving and interpersonal skills.
- Learn tax preparation.
You can learn more about tax law and documents by enrolling in taxation or accounting courses at an online or local technical college. For current or aspiring tax preparers, professional organizations like the ACAT and NATP offer courses and resources. The courses might include topics like deductions and exclusions, taxable benefits and refund calculations, electronic filing and tax codes, and many more.
- Register for your PTIN.
The IRS website has the PTIN application form. When applying for a PTIN, you will need information such as your Social Security Number and the previous year’s tax returns. To prepare taxes, you will also need your PTIN.
- Get certified
You might consider pursuing a federal or state certification as an EA or CPA to further your tax preparation career, or to be eligible for full-time tax jobs. Each state has its requirements for CPAs. However, you will need to have completed a minimum of two years of work experience and coursework. The three-part exam is required to become an EA. It usually takes between three and eight months to complete.
Where to Work
Tax preparers work during the busiest time of year, from January 1 to April 15. They might work overtime or on weekends during this time, which can make it very hectic. They may work up to 40 hours per week. This job is often only part-time or seasonal for many tax preparers.
Most tax preparers work in shared or private offices. They may also travel to meet current clients or find new clients. They often work closely with other tax professionals as well as individual and corporate clients.
Tax Preparer Salary Scale
In the United States, the average annual salary for a tax preparer is $64,271 per annum.