Preparing income taxes is a good way to put extra cash in your pocket during the cooler months. The number of tax jobs normally peaks in February and falls to a low point in July, according to the U.S. Bureau of Labor Statistics. Preparers don't need a college degree, but they normally need some type of training. Once you have the know-how, you must meet government requirements to work for pay.
A tax preparer should be a people person with good basic skills. Someone who wants to help others is a good fit for the job. You must be a superior listener and able communicator to get the information needed from clients. Good reading ability will help you decipher complicated tax documents and instructions. You should also be detail-oriented, good with numbers and math, and organized.
Tax-preparation companies usually require at least a high school diploma or the equivalent. Some companies give on-the-job training, but others hire graduates of special training programs. You can find tax certificate programs in community colleges and universities, and they are also offered by the National Association of Tax Professionals and the Accreditation Council of Accountancy and Taxation. The classes normally cover topics such as interviewing techniques, tax forms and filing status.
The Internal Revenue Service requires anyone who does taxes for pay to register for a preparer tax identification number. The minimum age is 18. Tax workers who don't fill out the 1040 series of forms, however, don't need to register. Certified public accountants, attorneys and other finance professionals don't need a number unless they fill out a "significant" portion of any return. If you do taxes without a PTIN, you can get hit with an IRS penalty.
Obtaining a PTIN
To get a PTIN, create an online account with the IRS, fill out the forms and pay the application fee. If you prepare taxes without supervision, you must also pass an IRS exam and complete continuing education each year. You are considered supervised and don't need a test if do not sign any tax returns personally and you work for a certain type of employer, such as a certified public accountant, an attorney or a company with at least 80 percent ownership by CPAs, attorneys or enrolled agents of the IRS.
Tax preparers in Oregon, California and Maryland have to jump through more hoops to work for pay. In Oregon, they need 80 hours of tax instruction or equivalent studies and a passing score on an exam. In California, preparers need a 60-hour state-approved course and a $5,000 bond. Certain professionals, such as CPAs and attorneys, don't need to register. Preparers in Maryland must register if they do state taxes. The requirements are a high school diploma or GED and a federal PTIN.
- U.S. Bureau of Labor Statistics: Employment in Tax Preparation Services
- Education-Portal: Tax Preparer -- Educational Requirements to Be a Tax Accounting Professional
- Internal Revenue Service: Notice-2011-6 -- Supervised-Preparers and Non-1040 Preparers
- DegreeDirectory.org: Tax Preparer -- Career Summary, Employment Outlook, and Educational Requirements
- O-Net Online: Tax Preparers
- IRS: Frequently Asked Questions -- Do I Need a PTIN?
- IRS: PTIN Application Checklist -- What You Need to Get Started
- Oregon.gov: How to Become Licensed in Tax Preparation
- The Income Tax School: Tax Preparer Regulations