How to Become a Tax Preparer & Train for Tax Preparation
The tax return preparation trade is a multi-billion-dollar industry with several thousand commercial tax return preparation businesses in the United States and around the world, according to the Internal Revenue Service. In the U.S., training and licensing requirements for tax preparers vary between states. Even if you have no experience, plenty of courses are available to provide you with the necessary training to prepare income tax statements.
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Instructions
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Register to perform fee-based tax preparation services. Depending on the state in which you practice and the professional credentials you hold, you may be required to register your business. Lawyers and certified public accountants, for instance, are licensed by their states to prepare income tax returns. Registration requirements vary between states, which in many cases mandate training as well as charge a fee.
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Educate yourself. States that mandate the registration of tax preparers generally require instruction in basic personal income tax law by an approved educator. Before taking a course, verify that it has been approved by the state to fulfill your educational requirements. In states without educational requirements, training is still important to ensure you know enough about tax laws to properly prepare income tax returns. Successfully completing a tax training or certification program also lends credibility to your business, according to the Accreditation Council for Accountancy and Taxation. Tax courses typically cover such topics as filing requirements, income and wages, interest and dividends, tax credits, tax deductions, depreciation and penalties
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Learn your legal obligations. All paid tax return preparers are subject to Internal Revenue Code penalties for activities such as aiding or abetting in the understatement of a taxpayer's liability on a return or failing to provide the taxpayer with a copy of the return. Tax return preparers are also subject to criminal sanctions for helping taxpayers prepare false or fraudulent returns. Familiarize yourself with the rules to avoid penalties.
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Monitor changes to regulatory requirements. In 2009, the IRS began developing new rules for tax return preparers. These could lead to requirements for all tax preparers to register, obtain identification numbers, pass competency tests and complete a specified number of hours of continuing education each year. Check the IRS website for updates on the changes and the ways they would affect your business.
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References
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
