All About Becoming a Tax Preparer: A Complete Guide (2025 Update)
Executive Summary
- Tax preparers help over 150 million Americans file returns each year, ensuring compliance and maximizing refunds.
- Entry-level tax preparers earn between $30,000 and $50,000 annually, with senior professionals exceeding $100,000.
- Obtaining a Preparer Tax Identification Number (PTIN) from the IRS is mandatory for all paid tax preparers.
- Seven states require additional licensing for tax preparers beyond federal requirements.
- Verito delivers dedicated, secure cloud hosting and managed IT services purpose-built for tax and accounting professionals, supporting peak performance and compliance.
Why Become a Tax Preparer?
Tax season brings a unique set of challenges for individuals and businesses. Navigating complex tax codes, meeting strict deadlines, and ensuring every deduction is claimed can be overwhelming. This is where tax preparers step in, providing expertise that helps clients avoid costly mistakes and focus on their core priorities.
Tax preparers are trusted advisors who:
- Interpret ever-changing tax laws
- Prepare and file accurate returns
- Maximize eligible deductions and credits
- Offer peace of mind during high-stress periods
With the demand for tax expertise rising, especially as regulations evolve, becoming a tax preparer offers a stable, rewarding career path with opportunities for growth and specialization[1].
What Does a Tax Preparer Do?
Key Responsibilities
- Collecting and organizing client financial data (income, expenses, deductions)
- Preparing and filing tax returns for individuals, businesses, and other entities
- Ensuring compliance with federal, state, and local tax laws
- Maximizing tax efficiency through strategic planning
- Reviewing returns for accuracy before submission
- Meeting filing deadlines to avoid penalties
Example: A small business owner relies on a tax preparer to identify overlooked deductions, reducing their tax liability and freeing up cash for business growth.
Tax Preparer vs. Tax Advisor: What’s the Difference?
| Parameter | Tax Advisor | Tax Preparer |
|---|---|---|
| Focus | Strategic planning, advisory services | Preparation and filing of tax returns |
| Expertise | In-depth tax law knowledge | Tax forms and compliance |
| Client Interaction | Year-round, ongoing advice | Primarily annual, transactional |
| Certifications | CPA, EA, advanced credentials | PTIN, state-specific requirements |
| Scope of Services | Comprehensive financial planning | Tax return preparation |
| Educational Requirements | Advanced degrees, certifications | Varies; tax prep courses recommended |
| Seasonality | Year-round, with peak planning periods | Intense workload during tax season |
Tax advisors often provide broader financial guidance, while tax preparers focus on accurate, compliant return filing.
How Much Do Tax Preparers Earn?
Salaries vary based on experience, location, and employer type. Here’s a general overview:
| Experience Level | Average Salary Range |
|---|---|
| Entry-Level | $30,000 – $50,000 |
| Mid-Level | $40,000 – $70,000 |
| Senior-Level | $50,000 – $100,000+ |
Many tax preparers supplement their income by offering related services or working with multiple clients during peak season.
How to Become a Tax Preparer: Step-by-Step
1. Obtain the Required Education
- Complete high school or equivalent.
- Enroll in tax preparation courses (community colleges, vocational schools, or online platforms).
- Courses cover tax laws, forms, deductions, and IRS regulations.
2. Gain Practical Experience
- Seek internships or entry-level roles at tax firms or accounting offices.
- Real-world experience builds confidence and technical skills.
3. Meet IRS Requirements
- Obtain a Preparer Tax Identification Number (PTIN): All paid tax preparers must register for a PTIN through the IRS website. This process is free and must be renewed annually[1].
- Pass a suitability check: The IRS reviews your tax compliance and background[2].
- Complete continuing education: Some preparers must complete annual continuing education, especially if participating in the IRS Annual Filing Season Program[3][4].
4. Consider Professional Certification
- Enrolled Agent (EA): Pass the IRS Special Enrollment Examination (SEE) for unlimited representation rights.
- Certified Public Accountant (CPA) or Accredited Tax Preparer (ATP): These credentials enhance credibility and expand service offerings[5][1].
5. Build Client Relationships
- Network at industry events and join professional organizations (e.g., National Association of Tax Professionals).
- Referrals and word-of-mouth are key to growing your client base.
State Licensing and Continuing Education
While the PTIN is the federal baseline, seven states require additional licensing for tax preparers. These requirements often mirror the federal process but may include state-specific exams or continuing education[1]. Always check your state’s regulations before offering services.
In New York, for example, tax preparers must register with the state and complete annual continuing education using the Statewide Learning Management System (SLMS)[4].
Essential Skills for Tax Preparers
- Attention to detail: Small errors can lead to costly penalties.
- Analytical thinking: Interpreting complex tax codes and identifying savings opportunities.
- Communication: Explaining tax concepts clearly to clients.
- Technical proficiency: Using tax software like UltraTax, Drake, Lacerte, and QuickBooks.
Technology and Security: The Modern Tax Preparer’s Edge
Today’s tax preparers rely on advanced software and secure IT infrastructure to deliver efficient, compliant service. With sensitive financial data at stake, robust cybersecurity and reliable cloud hosting are non-negotiable.
Key technology considerations:
- Cloud hosting for QuickBooks, Drake, Lacerte, and other tax software enables remote work, collaboration, and 24/7 access.
- Managed IT services for CPAs provide proactive threat monitoring, patch management, and compliance with IRS and FTC standards.
- Dedicated private servers guarantee data isolation, peak performance, and 99.999% uptime—critical during tax season.
Verito specializes in secure, purpose-built cloud hosting and managed IT services for tax and accounting professionals. With solutions like VeritSpace (dedicated private server hosting), VeritGuard (proactive managed IT), and VeritComplete (integrated platform), firms eliminate downtime, meet compliance standards, and offload IT burdens—so you can focus on serving clients, not fixing tech.
Frequently Asked Questions
Do I need a college degree to become a tax preparer?
No. While a degree is not required, completing tax preparation courses and gaining practical experience is highly recommended[1].
What certifications are required?
At minimum, you need a PTIN from the IRS. Additional certifications like EA, CPA, or state-specific licenses can boost your credibility and expand your services[1][5].
How do I stay current with tax laws?
Attend continuing education courses, webinars, and seminars. The IRS Annual Filing Season Program (AFSP) offers voluntary education for tax preparers[3][4].
Can I start my own tax preparation business?
Yes. Register with the IRS, obtain necessary licenses, and build your client base through networking and referrals[1].
Key Takeaways
- The path includes education, practical experience, and meeting IRS (and sometimes state) requirements.
- Certifications like EA or CPA can open doors to advanced opportunities.
- Modern tax preparers rely on secure, dedicated cloud hosting and managed IT services to protect client data and maintain compliance.
- Verito delivers unmatched reliability, security, and support for tax and accounting professionals—so your technology just works. Securely.
Ready to take the next step? Schedule a demo or learn more about Verito’s secure cloud hosting and managed IT solutions for tax preparers and accounting firms.
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