Learn How to Become a Tax Preparer

Understanding the Tax Preparer Profession

A tax preparer is a professional who helps individuals and businesses complete and file their tax returns. According to the U.S. Bureau of Labor Statistics, there are approximately 78,500 tax preparers working in the United States. These professionals work with clients to gather financial information, calculate tax liability, identify deductions, and submit completed returns to the Internal Revenue Service (IRS).

Tax preparers differ from other tax professionals in important ways. Certified Public Accountants (CPAs) and Enrolled Agents (EAs) have broader credentials and can represent clients before the IRS, but tax preparers focus specifically on tax return preparation. Some tax preparers work year-round, while others operate seasonally during tax season (typically January through April). Many work independently, while others work for tax preparation firms, accounting offices, or financial institutions.

The work involves understanding complex tax codes, staying current with changing regulations, and communicating clearly with clients about their tax situations. For example, a tax preparer might help a freelance graphic designer understand which business expenses can be deducted, or assist a retired couple in determining the tax consequences of their pension and investment income. The role requires attention to detail, organizational skills, and the ability to explain tax concepts in straightforward terms.

The median annual wage for tax preparers was $44,050 as of May 2023, according to the Bureau of Labor Statistics. Employment is projected to grow by 4% between 2023 and 2033, which is about as fast as the average for all occupations. This steady demand reflects the ongoing need for tax preparation services across the country.

Practical Takeaway: Research the different types of tax professionals and understand where tax preparers fit within the broader tax services industry. This will help you determine if this career path aligns with your interests and strengths.

Educational Requirements and Foundational Knowledge

Most tax preparers begin with at least a high school diploma or GED. However, many employers prefer applicants with some college coursework or an associate degree, particularly in accounting, business, or finance. Unlike CPAs, tax preparers do not always need a bachelor's degree, which makes this career path more accessible than some other accounting professions.

Building foundational knowledge in several areas is essential. You should develop understanding of basic accounting principles, including how debits and credits work, the difference between income and expenses, and how financial statements are organized. Learning about different business structures—sole proprietorships, partnerships, corporations, and LLCs—is important because each type has different tax implications. Additionally, understanding personal finance topics like investment income, retirement accounts, and deductions will serve you well when working with individual clients.

Many people start by taking community college courses in introductory accounting and business mathematics. These courses typically cost between $150 and $300 per course at community colleges. Online platforms also offer foundational courses, with many available for $50 to $200. Some individuals learn through self-study using textbooks and IRS publications, though this approach requires significant discipline and motivation.

Key knowledge areas to develop include:

• Basic accounting and bookkeeping principles
• Personal income tax fundamentals
• Business income and expense tracking
• Payroll tax basics
• Tax deductions and tax credits
• IRS forms and filing requirements
• State and local tax considerations

The IRS provides free educational resources through its website, including publications explaining different tax topics. IRS Publication 17, "Your Federal Income Tax," and IRS Publication 334, "Tax Guide for Small Business," are widely used references. Many tax preparers keep these and other IRS publications readily available as they work.

Practical Takeaway: Enroll in at least one introductory accounting course at a local community college or through an online provider to build your foundational knowledge in a structured way.

Obtaining Tax Preparer Credentials and Certifications

While some tax preparers work without formal credentials, obtaining a recognized certification significantly improves job prospects and earning potential. The most common credential for tax preparers is the Registered Tax Return Preparer (RTRP) certification, though as of 2023, this credential is no longer being issued by the IRS. However, many existing RTRPs continue to practice, and the certification remains a credential that some employers value.

Currently, the primary path to formal tax preparer credentials is through the Certified Public Accountant (CPA) license or the Enrolled Agent (EA) credential. An Enrolled Agent is a federally recognized tax credential issued by the IRS. To become an EA, you must either pass the three-part Special Enrollment Examination (SEE) or have worked for the IRS in a specific capacity for at least five years. The SEE covers three areas: individual income tax, business income tax, and representation, practice, and procedures. The examination costs approximately $306 for the entire three-part exam. Enrolled Agents must complete 72 hours of continuing education every three years to maintain their status.

Many tax preparers pursue the CPA credential, which requires a bachelor's degree, typically with 150 credit hours of education (beyond the standard 120-hour bachelor's requirement). CPAs must pass the Uniform CPA Exam, which has four sections. The exam costs approximately $1,000 to $1,500 total. CPA requirements vary by state, but most states require 120-150 hours of post-secondary education and 1-3 years of relevant work experience.

Professional certifications and designations include:

• Enrolled Agent (EA) — IRS credential for tax representation and preparation
• Certified Public Accountant (CPA) — State-licensed credential with broader accounting responsibilities
• National Association of Certified Public Accountants (NACPAP) certifications — Offered by professional organizations
• Coursework certificates from tax preparation companies — Programs offered by H&R Block, Jackson Hewitt, and other firms

Many tax preparation firms offer their own training programs that result in company-specific certifications. These programs typically take 40-120 hours and cover the firm's specific software and procedures. While these certifications don't carry weight outside the company, they can help you obtain employment quickly.

Practical Takeaway: Research the Enrolled Agent credential as a focused, achievable certification for tax preparers. Examine the SEE exam requirements and determine whether pursuing this credential aligns with your career timeline and goals.

Getting Training Through Tax Preparation Companies and Programs

One of the most direct paths into tax preparation is through training programs offered by established tax preparation companies. Major national firms like H&R Block, Jackson Hewitt, Liberty Tax Service, and JTX (formerly JT Taggart) all offer seasonal training programs that prepare people to work as tax preparers during tax season. These programs provide structured learning, real-world practice, and employment opportunities.

H&R Block offers one of the largest training programs in the country. Their online tax course takes approximately 120 hours to complete and covers federal and state income tax preparation. The program costs typically ranges from $150 to $500 depending on promotions and options. Upon completion, graduates can work as tax preparers at H&R Block offices across the country. The company hires thousands of seasonal tax preparers each year, making this a reliable entry point for people new to the field.

Jackson Hewitt offers similar training through their JH Tax School program. This program teaches tax return preparation and typically takes 60-100 hours to complete. Graduates can work at Jackson Hewitt locations or use their training to seek employment elsewhere. Liberty Tax Service and other firms provide comparable programs with varying time commitments and costs.

These training programs typically include:

• Instruction on current tax law and regulations
• How to use the company's tax preparation software
• Hands-on practice preparing actual tax returns
• Information on IRS requirements and documentation
• Customer service and communication skills
• Review and assessment of your knowledge

A significant advantage of company-based training is immediate employment opportunity. After completing training, you