Any profession within the tax industry requires impressive intellectual and personal skills. From your specialization to client niche to the rates you choose, there’s a lot to consider while entering the tax business industry. This is mainly because taxation activities themselves are somewhat complex and time-consuming. Tax impacts every part of modern society, from imports and exports to bureaucratic affairs, welfare concerns, and a range of other areas. Since the job of a tax preparer involves some of the most fundamental works in tax filing for businesses, it sure has a lot of scope and opportunities. However, given the massive diversity of the kinds of tasks you receive and the skills you implement during tax preparation, you may wonder if you’re made to bear the brunt of a seemingly demanding and taxing field.
The problem is that there is this particular uncertainty regarding a tax preparer’s job that leads to misinterpretations in the way people perceive the job roles. If you’re one of the crowds that have always wondered what it is like to work as a tax preparer and how you become a tax preparer in the first place, here’s all the information you need:
Is it Hard to Become a Tax Preparer?
There are both positive and negative aspects to the job of a tax preparer. The assignment covers the baselines of taxation, so it isn’t supposed to be highly technical or insanely demanding as far as educational requirements are concerned. However, given the breadth of tasks in the tax business, you may need to go through some extent of training and supervision if you’re going to handle specialized clients. There are certain accreditations and licenses that you must acquire if you want to do advanced tasks as a tax preparer. Like most licenses, the tax licenses also require you to pass specific licensing exams. However, the exams are not overly complicated or lengthy, so your chances of passing them are high, especially if you’ve taken out time to study for them. Put another way, becoming a tax preparer can be both easy and hard. Here are all the facets of a tax preparer’s career path!
The Easy Part of Becoming a Tax Preparer
As a tax preparation aspirant, you’ll often hear people comment about you having it easy. That is true. Tax preparation is much less of a bumpy ride than other fields in similar categories, such as insurance agents or credit providers, or other jobs. What’s more is that despite the relatively smooth path to becoming a tax preparer, the benefits are innumerable. So yes, things will be relatively easy for you as a tax preparer as far as the following aspects are concerned:
1. You Won’t Need an Elaborate Degree
In jobs such as attorneys and CPAs, there’s a lot of studying from the beginning of your college right until you enter the professional field, and even after you’ve had years of experience working in the area. For instance, attorneys in law and taxation usually spend a good decade working under the supervision and as subordinates before they can gain enough visibility, credibility, and clientele to consider pursuing a partially independent practice. As a tax preparer, however, your tunnel is relatively shorter, less dark, and way less complicated.
For tax preparation, you can start right after you get your associate’s degree. As compared to the 5+ years of studies in other fields, a tax preparation career will need only two years of an associate’s degree in relevant courses, including accounting, business, economics, finance, law, crypto, and so on. Even so, you can start a side gig in a tax preparation agency to gain experience even before you graduate!
2. You Can Find Plenty of Jobs as an Undergrad
Another problem tax majors face is that most job opportunities require a ton of experience, an elaborate academic background, and just a whole lot of full-time effort, which most students cannot manage along with their studies. If you’re looking for a more spontaneous, experiential, and practical line of work, you’ll be able to find plenty of opportunities that pertain to the long-term career paths in tax preparation. In other words, you don’t have to wait till your degree ends to become a tax preparer. You can be a rookie while pursuing your formal studies because, in tax preparation, there are some jobs that you can take up after completing your early semesters in associate classes.
3. The Market is Fertile
A significant part of becoming a tax preparer is also about landing good job opportunities. In the tax prep business, you will find that almost every industry requires your services. From government to private, organizations to individuals, corporate to welfare, intelligence, law enforcement, pharmaceuticals, ordnance, education, and almost every other line of work requires your services.
Therefore, even though competition runs high in this field, you’ll be able to progress steadily even before you’re done with your education. While becoming a tax preparer, you can multitask and find jobs that you can adjust with your timing, and then go on to more advanced jobs as you progress further in your career. You can find work in agencies that provide third-party tax filing assistance, and you can work in-house with companies that have extensive tax handling. If you do not want to go down these paths, you can also opt for independent practice with the basic skills you acquire along the way. All in all, there are numerous ways to make it big in the tax industry despite its saturation.
4. It’s an Affordable Career Path
Although you can make quite a handsome earning be in a tax preparer, you don’t need to spend too many resources on acquiring the necessary training for tax preparation. You have to enroll in a 60-hour tax preparer’s course that gears you up for getting your licensure. This course has 45 hours dedicated to federal taxation, while the other 15 hours are for the Californian Taxation laws.
There are several course preparers and course materials you can avail and meet the essential criteria for starting as a tax preparer. Some people give a mere few weeks to complete their course, and then they can get their PTIN (Preparer Tax Identification Number). This is quite an affordable route compared to the studies and practices you need to undertake for other niches in the tax business!
The Harder Parts in Becoming a Tax Preparer
Becoming a tax preparer won’t take you long, but it sure isn’t an effortless journey. You may face specific difficulties that might lead you to question your career choice at times. What could these barriers include? Here’s an introduction to help you map your path:
1. Relative Academic Value
Technically, you only need an associate’s degree and a PTIN from the Internal Revenue Service to qualify as a tax preparer. However, that’s the lowest, clerk-level qualification in the tax industry. If you want to grow in the tax preparation industry, you’ll still have to juggle academic activities alongside your career.
This refers to the concept of relative educational value. Stable, affirmative progress in your tax preparation career is only possible when you climb up the academic ladder, earning bachelor’s, specializations, and executive-level degrees. There’s a conundrum of choices and mistakes meeting you at different points of the path, making it challenging to identify and implement the right choice!
2. You Don’t Have a Clear Sense of Direction
Since tax preparation doesn’t have a formal degree program, you’re most likely going to wing it throughout your journey. At least in the initial days of your career. Although this freedom of choice in your career may seem liberating at first, it can be counterproductive later on. When you do not have a defined path ahead of you, it can be hard to decide which way you want to go. Furthermore, the industry is not particularly warm towards new talent. So finding the right mentor might be a struggle for most new tax preparers. This is while your head is still buzzing with a million questions about how to navigate your way through the tax industry.
Where do you want to apply to study for a PTIN? Which courses in the associate’s degree would best suit your aspirations as a tax preparer? Which niche of tax preparation should you specialize in? How do you find the best strategies to implement the 17,000-pages-long tax code? And most importantly, how do you adapt to the varying ways in which tax preparation takes place these days?
3. Getting the License Can Be Difficult
Getting IRS-approved licensure could be quite a complicated process for many people. While it’s a straightforward process as far as the studies are concerned, your licensing can take time in some instances.
These may include not having credible qualifications or a recognized degree or diploma, not providing complete details, or simply not performing well on your IRS PTIN test. So unless you score a minimum of 70% on your test (you can retake the test though it lowers your credibility), and provide complete, updated documents, the IRS may not be exactly fast in processing your application!
4. It’s Mostly Seasonal Work
Eccentric is perhaps the best word to describe how a tax preparer’s world functions. You can get your combination of academic qualifications, specialize in any niche you deem suitable, and set up your workspace wherever you prefer and however you like it. But not all setups and paths will lead you to a stable, sizeable income for the whole year. Most of the average tax preparer’s earnings are only seasonal and occasional.
And even though there are plenty of clients, they’ll only require your service for a specific set of days, after which you’ll have to look for new clients to sustain the job. In a nutshell, it’s mostly seasonal work, and during your initial years as a tax preparer, you’ll often find yourself fighting the urge to quit the industry altogether!
There are numerous perks to becoming a seasoned tax preparer. These can include a good income, easy access to the field, little to no capital for a start-up, and numerous opportunities to grow and excel in the tax industry. However, the job does not come easy either, and you will have to cross multiple barriers on your way to success. However, if you persist and persevere during the hard days, you will reap the numerous benefits of becoming a tax preparer a few years down the road. The most important thing to remember is that, like all careers, it takes some time to become good at the job. However, the more you practice, increase your tax-related acumen, and further your education in the field, the more successful you are bound to be.