The Disadvantages & Advantages of Becoming an Income Tax Preparer
A career as a tax preparer is one logical option for anyone who is good with numbers and enjoys unraveling mysteries. Becoming a paid tax preparer, whether licensed or not, will be a lifestyle change for most people as well as a career change. It is not your typical 9 a.m. to 5 p.m. job, and it may involve duties you have never considered a part of tax preparation.
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Job Requirements
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Be curious and flexible. In addition to the obvious need for a flair with numbers, anyone considering tax prep as a career will also need to have a sense of curiosity and an absolute ability to multitask. Most of all, you will need an earnest desire to keep learning. Tax law changes occur so frequently that keeping up with the changes is nearly a full-time job. Expect to spend many hours each year researching tax law specifics if you intend to be one of the best in the business.
Work Environment
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Be ready for anything and anyone. Tax preparers run a gauntlet between the client, computer, stacks of paperwork and the IRS. Every tax return is different from the one before or after it, even if they all use the same forms. There is no such thing as an "average" tax return or audit, and each client needs to be heard and understood. Tax season is only about 4 months long, so you may need to work very long hours.
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Employment Season
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Find an additional or related career to keep food on the table during the "off" season. If you like the idea of working only the first four months of the year and your budget can work with that, tax prep could be a great career for you. To work year-round in a tax prep office, you'll need an accounting background or be able to fill some other niche in financial services.
Frustrations
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Expect tax work to be tedious, as well as very detailed. It's a lucky day when the client brings you a neat list where all expenses are already tallied according to correct tax categories, cost information is listed for all sold assets and income is listed according to what form it belongs on. A year's worth of receipts might be handed to you in a shoebox, plastic crate or even a roasting pan -- two days before the filing deadline. The smaller the office you work in, the more of your own clerical duties (copying, stapling, filing) you will also perform. A good sense of humor will serve you well at these times.
Earnings
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Get licensed. Without a license you will make minimum wage at most major franchises early in your career and not much more as you gain experience. Because the IRS only recognizes Enrolled Agents (EAs), Certified Public Accountants (CPAs) and attorneys to represent taxpayers at all administrative levels of audits and collections, those are the licenses that earn good money in tax work. You'll stay busy year-round and have plenty of interesting work to do.
Specialties
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Find what interests you and develop a specialty. In your initial education as well as your early years of professional practice, you will work on all types of tax returns under the supervision of a more seasoned practitioner. Use this time to see which areas of tax law are most intriguing. You can develop specialties in small business (Schedule C) returns, S Corporations, C Corporations, individual tax returns, investment income, rental deductions or a combination of niches. Licensed preparers can also have specialties in representation work such as audit cases and wrestling with the IRS on collection cases.
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References
- Photo Credit Microsoft Office Images
