A tax preparer is a person who prepares, calculates and files income tax returns on behalf of individuals and businesses. But how do you become a tax preparer? What types of qualifications are needed? What tools are available to increase your productivity? And what does a tax preparer do on a day-to-day basis? Most tax preparers prepare, file, or help with general tax forms. Beyond these basic services, a tax preparer can also defend a taxpayer before the IRS. This includes audits and tax court matters.
However, the extent of what a tax preparer can do depends on your credentials and whether you have representation rights. Tax preparers are responsible for completing and filing tax return documents. This process requires professionals to work with a variety of unique tax forms for each client. Outside of tax season, professionals often fill out budget forms and can contact self-employed clients several times a year.
A tax preparer is a professional who is qualified to calculate, file and sign income tax returns on behalf of individuals and businesses. They can also represent the taxpayer during the examination of IRS tax returns. There are several types of jobs that these professionals can have, as well as several certifications and educational levels; individuals must choose which type of tax professional best suits their situation. Any tax professional with an IRS tax preparer identification number (PTIN) is authorized to prepare federal tax returns.
However, tax professionals have different levels of skills, education, and experience. According to the BLS, tax preparers are primarily employed in accounting, tax preparation, bookkeeping and payroll services. This industry employs more than 67,000 tax preparers. The next most employed industry is management, scientific and technical consulting services, which employs 460 tax preparers.
Depending on experience levels, your client list, and the specific characteristics of your business, the types of tax returns a preparer will work on can range from an individual income tax return, Form 1040, to a corporate income tax return, the Form 1120, up to the interpretation of complex partnership agreements. The work of tax preparers follows a different cycle, with a massive influx of work between the beginning of the year and April 15, and a sharp decline with a minimum of work for the rest of the year. Many tax preparers are self-employed; these professionals cultivate a client base and operate their own business structure, often from home. They provide advice on future tax planning and communicate with clients about upcoming tax requirements and deadlines.
Tax preparers often help those with more complex tax situations and, therefore, prefer to use the assistance of a professional rather than filing their taxes on their own. If you use the services of a paid tax preparer or facilitator, you are entitled to protection against unfair treatment. Tax preparers spend most of their time in an office environment reading financial documents and filling out forms. Tax preparers can also speak with their clients in person to learn more about their record-keeping practices and potential cancellation opportunities.
Previous accounting experience and experience filing taxes for businesses demonstrate that a candidate has the technical skills to ensure compliance when preparing tax documents. A great first stop is the IRS website, which is full of publications and instructions that will help new and experienced preparers address changes in the tax code, as well as frequently asked questions and other helpful tips. Tax preparers review each customer's receipts and payment receipts, along with any other documentation important to the client's financial situation. To get larger returns for their clients, tax preparers review tax laws to find tax exemptions and credits.
They can only represent clients whose returns they have prepared and signed, but only before revenue agents, customer service representatives and similar IRS employees, including the Taxpayer Defense Service. Anyone can prepare a paid tax return as long as they have an IRS Tax Preparer Identification Number (PTIN). Good tax preparers are focused, routine-oriented people who have the natural mathematical skills to perform the correct calculations on tax forms. .