What Education Is Required to Be a Tax Preparer?
Tax preparers serve a simple yet integral role, working with private citizens and small businesses in filing their annual state and federal tax returns. As part of the accounting industry, tax preparers must be well versed in tax laws in order to support their clients' needs and safeguard the reputations of the companies for which they work. The educational requirements of tax preparers can vary greatly depending on their chosen career path.
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The Facts
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Individuals in the accounting field typically have a bachelor's degree in business administration with an emphasis in accounting or finance. Although many institutions prefer that their tax preparers have a bachelor's degree in a related field, it is not required. Businesses that specialize in tax preparation generally offer their own courses and training, requiring that their tax preparers complete them successfully and have some background, education or experience in accounting. Many firms prefer that their tax preparers take the Accredited Tax Preparer (ATP) examination to become ATP certified.
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Function
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Tax preparers must have knowledge of current tax laws, an understanding of the filing process, and abilities to organize their clients' tax information and correctly complete the applicable forms. A background in accounting or bookkeeping is desirable, but prospective tax preparers must still take tax preparation courses, which vary by state. These courses are usually offered by the hiring firm; they can also be taken at a number of community or 4-year colleges, accredited online schools and independent schools specializing in tax education.
Benefits
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A beneficial step in tax preparer education is to obtain ATP certification. In order to do this, the individual must have 3 years of tax preparation experience or 2 years of applicable college credit and 1 year of experience in the field. ATP testing occurs biannually at testing centers countrywide and focuses on tax preparation knowledge, tax laws and ethics. ATP certification provides the individual with a competitive edge in the industry and signifies a desirable level of expertise to potential employers and clients.
Potential
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Individuals with experience or a background in tax preparation have the knowledge and skills necessary to move into higher-level accounting jobs including Certified Public Accountant (CPA), auditor or controller. These advanced positions require a bachelor's degree with an emphasis in accounting, finance or a related field. Individuals who wish to become a CPA must also take a special licensing exam, serve in an accounting role under an already-licensed CPA for a designated length of time (which varies by state) and pass an ethics course.
Considerations
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While some employers may provide the necessary course work and continuing education, tax preparers are ultimately responsible for obtaining the classes and/or certifications necessary for the position. The initial testing for ATP certification costs $200, and certified tax preparers must complete a renewal process every 3 years, refiling for their certification once the continuing professional education courses have been successfully completed. Both the additional courses and refiling have varying fees associated with them.
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- Photo Credit "studying till the sun goes down" is Copyrighted by Flickr user: jekert gwapo (Jek Bacarisas) under the Creative Commons Attribution license.
