Tax preparers assist with filing, preparing and registering general tax forms. A tax preparer may also represent a client before the Internal Revenue Service (IRS). This includes reviews and tax court issues. Nonetheless, the degree of what a tax preparer can do depends on their qualifications and whether or not they have representation rights.
If you are keen on seeking a position as a tax preparer, here are some examples of what your resume should include and how it should be structured.
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Job Duties of a Tax Preparer
Tax preparers are responsible for scheduling meetings to help customers with the tax preparation process. They need to help with identifying the best way to file customer’s taxes by collaborating with them to identify their filing needs, including returns, liabilities, allowances, deductions and expenditure. They then need to file the customer’s tax returns.
A tax preparer’s expected set of responsibilities ordinarily include:
Preparing income tax and estate tax returns for individuals and corporations.
Auditing different financial records like income statements, receipts of expenses and past tax forms to determine which tax form to fill for the client.
Meeting with customers to gather their data on deductible costs, stipends, allowances and taxable income.
Researching tax laws to get help with abnormal returns.
Making correct entries on the tax form and calculating the amount of taxes owed by a person or company accurately.
Scanning the forms that people filled themselves to check for mistakes or miscalculations.
Developing working knowledge of different tax forms such as IRS Form 1120S, 1065, 1040, among others.
Keeping up with developments in federal and state tax laws.
Tax Preparer Median Salaries
According to the U.S. Bureau of Labor Statistics, the average salary of a tax preparer is $52,710 a year, with a projected employment growth rate of 2.9% as of May 2020. However, salaries vary depending on years of experience and qualifications.
Top Skills for Tax Preparers
Tax preparers work for accountants, businesses, nonprofit organizations, tax preparation services, government agencies or as independent contractors. Since 2001, the Internal Revenue Service (IRS) has required paid tax preparers to undergo a federal tax law examination to prove their technical skills and knowledge. The most successful candidates for tax preparer positions possess some common qualities to assist people with their tax returns well.
- Attention to detail: Tax preparers must make accurate calculations and avoid errors such as misinterpreting tax regulations or entering numbers incorrectly. A single mistake a tax preparer makes can cause trouble for their client with the IRS and state tax agencies. It is of the utmost importance for a tax preparer to be attentive at all times and develop the habit of double-checking their work for even the smallest of errors.
- Mathematics: Tax preparation is a number-heavy profession, so tax preparers must have a solid grasp of mathematics. Proficiency in arithmetic — addition, subtraction, multiplication, division, percentages and fractions — is one of the essential qualifications of a tax preparer. Beyond the fundamentals, the job often involves complicated formulas, so you must know algebra and possess the ability to solve equations accurately with or without a calculator.
- Communication skills: Tax preparation implies dealing with a lot of sensitive information from clients. Therefore, tax preparers must be able to communicate in a way that builds trust. Moreover, they must also be able to break down complicated tax laws into simple, concise terms.
- Critical thinking skills: You have to analyze the client’s unique situation and use deductive reasoning to determine if they qualify for deductions and credits, and categorize different types of income and losses. You also have to use sound judgment to establish the advantages and disadvantages of taking a particular course of action, such as opting for one tax write-off over another.
- Customer service: Tax preparers need to be approachable and friendly. Clients should feel that they can trust them with sensitive financial information and personal identifiers such as their social security number, and that they can meet their needs.
- Problem-solving: As a tax preparer, you may run into different issues, which you should handle and solve efficiently through practical solutions.
Educational Requirements for Tax Preparers
As a minimum, an aspiring tax preparer should have a high school diploma or its equivalent. However, many companies prefer individuals who have taken courses in tax preparation or accounting. In fact, accounting firms look for more experience and require an associate or bachelor’s degree in accounting or business. Other companies provide on-the-job training in accounting, taxation, scheduling and data management, among others.
The essential Internal Revenue Services (IRS) requirement for all paid tax preparers is to pass the suitability check and issue a Preparer Tax Identification Number (PTIN). However, some roles require tax preparers to become an enrolled agent, for which you’ll need a state license or an electronic Filing Identification Number (EFIN). If you want the right to represent clients with the IRS, you need to be an enrolled agent, Certified Public Accountant (CPA) or attorney. Once you receive a PTIN or an EFIN, you can legally be a tax preparer.
DegreesWhile there aren’t any higher education requirements for tax preparers, most employers prefer candidates who have obtained an associate or undergraduate degree in accounting, mathematics, economics or a related field.
Some universities that offer such programs are California State University, the University of Illinois at Urbana-Champaign and the University of Colorado Denver. The University of Texas at Austin also offers undergraduate and graduate degrees in Accounting. Furthermore, this is the leading school in business accounting in the country.
If you prefer online programs, Penn Foster College offers an affordable online associate degree in Accounting that teaches essential accounting skills businesses need, such as creating, organizing and maintaining financial records, assessing financial data and analyzing financial statements.
Other online associate degrees worth checking out are offered by Southern New Hampshire University and Herzing University, both of which can be completed in less than two years.
Certifications and coursesCertifications aren’t mandatory to get a job as a tax preparer, but they make you a more competitive candidate by proving you have the skills for the role.
For example, individuals who pass the exam to receive the Accredited Tax Preparer (ATP) designation are recognized as being prepared to file individual’s returns in adherence to IRS standards. However, offering evidence of taking training in tax codes and tax return filing may be enough for some employers. Let’s take a look at some options you can consider to improve your credentials and your chances of landing the job:
- Online: The National Tax Training School offers a course in Federal Income Tax which can be completed in as little as eight weeks. This is the only accredited distance education tax school in the U.S. where you can become a trained federal income tax preparer, as well as take other advanced federal income tax courses.
- Membership associations: For experienced tax preparers, a professional certification is also an option. Professional associations such as the Accreditation Council for Accountancy and Taxation (ACAT) offer the ATP credential, and the National Association of Tax Professionals (NATP) offers additional training programs.
- For-profit companies: Liberty Tax offers tuition-free online and classroom courses taught in different U.S. states. Courses at Liberty Tax are free, although there may be a small fee for books. Other practical online courses are offered by Jackson Hewitt Tax Service and Surgent Income Tax School. These online courses can be completed at the student’s pace, so they are great options for people of all backgrounds. Also, the private company H&R Block has a convenient guide on how to become a tax preparer, as well as a tax course.
Tax Preparer Resume-writing Tips
Recruiters are always on the lookout for qualified candidates. Now that you understand the necessary skills and job responsibilities of tax preparers, all you need is an excellent resume to showcase your abilities to hiring managers. Here are some suggestions to help you write a resume that can get you the interview!.
- Select the best resume format for your qualifications. Depending on where you are in your career, you may have a lot of experience or none, a prestigious certification or be enrolled in tax preparation courses. Because everyone’s credentials are different, selecting the resume format that’ll make you stand out is an essential step in writing an effective resume. If you have a lot of experience, you can opt for a chronological resume, which lists your work history in reverse chronological order and details the tasks of each role you’ve had. Alternatively, you can choose a combination format to also add weight to your skills. If you’re new to the workforce, changing career, or have gaps in your work history, the functional format may be best for you because it draws attention away from your experience and focuses solely on your qualifying skill set. Whichever your situation, make sure to choose the format that will show your credentials in the best light.
- Tailor your resume to the position. One-size-fits-all resumes might be useful to apply to multiple jobs quickly, but they have a lower chance of matching the exact requirements the employer is looking for in candidates. A better approach is to tailor your resume to the position to which you want to apply. Have a list of all your skills, previous experiences and relevant education at the ready, and then select the ones you see mentioned in the job ad. Doping these few tweaks to your resume before applying can increase your odds of passing to the interview phase.
- Quantify your responsibilities and achievements. Identifying and listing your achievements at school or previous roles is very beneficial in any resume. What’s even more beneficial is quantifying your daily tasks at previous jobs and any achievements you’ve had to be as specific as possible. For example, while saying that you “successfully prepared tax returns that got clients high returns” is good, try quantifying it like this: “successfully prepared five to eight daily tax returns that got clients a 10-30% higher return than they expected.”
- Write a captivating summary. A recruiter usually reads through many resumes a day, so they don’t always read them until the end. That’s why it’s crucial to capture their attention within the first few seconds of them reading your resume. Since the first section is the professional summary or objective statement, use this space to include your most relevant skills, quantified achievements and credentials that make you qualified for the role. However, remember to keep it short and straight to the point as this part should only be three to four sentences long.
How do I stay up to date on new tax legislations?
Both new and seasoned tax preparers must keep up with changes in the law. As a result, most preparers devote some time each day to monitoring any IRS updates, technical corrections, or other state or local changes that may affect their business. The IRS website is a great place to start because it has a wealth of publications and instructions to help new and seasoned tax preparers manage changes to the tax code, frequently asked questions and other helpful hints.
What does a tax preparer charge for their services?
This may vary significantly for most preparers depending on the area in which they specialize. Although there is no one-size-fits-all solution to how much a tax preparer should charge, according to the National Society of Accountants, the average fee for preparing Form 1040 with Schedule A to itemize personal deductions, as well as the federal income tax return, was $323 in 2020. The average fee for preparing Form 1040 with the standard deduction, as well as a state income tax return, was $220.