To become a tax preparer, obtain a high school diploma, complete an approved tax education course, and apply for a Preparer Tax Identification Number (PTIN). Register with your state if required, such as CTEC in California. Gain experience, use IRS-recognized software, and maintain your credentials through continuing education.
Why Tax Preparation Is a High-Demand Career
Imagine a profession where people rely on your expertise every year. Tax preparers hold a crucial role in guiding taxpayers through one of the most financially significant responsibilities they face: filing tax returns. The demand for tax professionals spikes every tax season, and it’s not just temporary. With evolving tax regulations and increased scrutiny, trained tax preparers are more essential than ever.
Many clients need help preparing accurate income tax returns, especially small businesses and individuals unfamiliar with changing laws. The IRS continues to encourage e-filing and proper compliance, increasing reliance on trained professionals. Whether you’re looking for a side hustle or full-time career, this path is in demand, rewarding, and surprisingly flexible.
What Tax Preparers Actually Do
Tax preparers aren’t just form-fillers. They interpret complex regulations, identify deductions, and ensure clients stay compliant. Every tax season, professionals work with individual returns, small businesses, and even corporations to file accurate tax forms.
Typical tasks include:
- Preparing federal and state tax returns
- Using tax software to ensure compliance
- Explaining tax law changes to clients
- Maintaining tax preparer’s credentials through continuing education
- Representing eligible clients if enrolled in the AFSP or as an EA
Your Educational Journey Starts Here
Many preparers opt for a tax preparation course, either online or in person. These cover tax forms, deductions, credits, and ethical responsibilities. In California, the California Tax Education Council (CTEC) mandates a 60-hour course and passing a final exam to earn the Registered Tax Preparer credential.
Educational paths might include:
- 60-hour CTEC-approved qualifying course
- IRS Annual Filing Season Program refresher courses
- EA or CPA exam prep
Choose your path based on your career goals, whether that’s seasonal work, part-time service, or full IRS representation.
IRS Rules Every Tax Preparer Must Know
The IRS requires all paid preparers to have a Preparer Tax Identification Number (PTIN). It’s simple to apply for on the IRS website and is your gateway to tax preparation.
Here’s what else matters:
- AFSP (Annual Filing Season Program): This voluntary program enhances your standing with the IRS and grants limited representation rights.
- ERO (Electronic Return Originator): Want to e-file returns directly? You’ll need to become an ERO.
- Data Security: Yes, even tax preparers must maintain a written data security plan.
You’re probably thinking, “Do I really need all this?” If you want to be seen as a legitimate, professional tax preparer, absolutely. It’s your license to operate with credibility.
State-Specific Steps Like CTEC in California
If you’re in California, things get a bit more specific. CTEC registration is required unless you’re a CPA, attorney, or enrolled agent. Becoming a California Registered Tax Preparer (CRTP) means:
- Completing 60 hours of education (45 federal + 15 state)
- Passing an exam
- Getting fingerprinted and passing a suitability check
- Posting a $5,000 surety bond
Sounds intense? It is, but it establishes trust with clients. Plus, you’ll be listed in the CTEC directory, a source of new business.
Other states may have different requirements, so always check your state’s tax board or department.
Finding Accredited Tax Education Options
Where do you get quality tax education? Plenty of schools and platforms offer training, but not all are created equal. Look for IRS-approved or CTEC-compliant programs.
Some top choices include:
- National Association of Tax Professionals (NATP)
- IRS-Approved Continuing Education Providers
- Online course platforms like Surgent or Gleim
Costs vary, from $100 for a basic refresher to $500+ for an EA prep course. Choose based on your needs. Are you planning to work just one tax season, or do you want to build a long-term career?
Where to Get Real-World Practice
You can’t just study and expect clients to line up. You need real-world experience. And trust me, there are ways to get it—even without prior experience.
Try these:
- Volunteer with VITA (Volunteer Income Tax Assistance)
- Apply for internships at tax prep firms
- Offer friends or family free services during your first season
Maria Rodriguez, now a successful tax pro in LA, got her start by volunteering. One return turned into two, then ten. She gained confidence, learned from mistakes, and built a base of future clients.
Enhancing Your Resume and Authority
Below is a helpful comparison table showing the major certification pathways for tax preparers:
Comparison of Tax Preparer Certification Options
| Pathway | Requirements | Cost | Time to Complete | Credential | Representation Rights |
|---|---|---|---|---|---|
| PTIN Only | High school diploma, PTIN application | ~$20/year | 1 day | PTIN | None |
| AFSP | PTIN, 18 hrs CE, IRS refresher course | ~$100–140 | 1–2 months | Record of Completion | Limited to clients whose returns were prepared by the participant |
| CTEC (California) | 60-hr course, exam, $5k bond, PTIN | ~$150–300 | 2–6 months | CRTP | No federal IRS representation rights |
| Enrolled Agent (EA) | Pass 3-part IRS exam, background check | ~$300–600 | 6–18 months | EA | Unlimited representation before IRS |
| CPA | Bachelor’s degree, pass CPA exam, licensure | $1,000+ | 2+ years | CPA | Unlimited representation plus audit/accounting authority |
This table can help you decide how far you want to take your tax preparation career.
Think long-term. If you’re in this career for more than just a season, credentials matter.
Options include:
- EA (Enrolled Agent): Pass a 3-part IRS exam, gain unlimited representation rights
- CPA (Certified Public Accountant): Extensive education, licensure, and tax authority
- AFSP Participant: Annual education for limited representation
Each adds legitimacy. Enrolled Agents, for instance, are often hired by law firms and tax consultancies because of their deep tax knowledge.
Legal and Operational Steps to Start a Tax Business
Ready to fly solo? Starting your own tax business means more than printing business cards.
Here’s what you’ll need:
- Register your business with state authorities
- Apply for an EIN (Employer Identification Number)
- Secure a business bank account
- Choose professional tax software (e.g., Drake, TaxSlayer Pro)
Also, consider client privacy. Invest in secure filing systems and data encryption. Taxpayers trust you with sensitive information, you can’t afford a breach.
Grow Your Clientele Through Smart Outreach
You’ve got the skills. Now you need the people. Building a client base takes strategy:
- Set up a Google Business Profile
- Ask satisfied clients for testimonials
- Partner with local businesses for referrals
- Use Facebook, LinkedIn, or Instagram to show your expertise
One rookie mistake? Only marketing during tax season. Stay active year-round, offering tips, reminders, and value so clients think of you first.
Building a Loyal Clientele
Retaining clients is easier, and cheaper, than finding new ones. You want clients to return every year, right?
Best practices:
- Send tax prep checklists ahead of tax season
- Offer free consultations for new tax law changes
- Use scheduling tools to reduce friction
- Ask for feedback and improve your service
“Every March, I email reminders to past clients,” says Michael Chen, an EA in Denver. “They appreciate the personal touch. Some even refer their friends.”
Where This Career Can Take You
This isn’t just a seasonal gig, it’s a springboard. Tax preparers go on to:
- Own firms
- Teach tax law
- Offer bookkeeping services
- Become enrolled agents or CPAs
You might start as a solo preparer helping neighbors. A few years later, you’re leading a team, advising small businesses, or running a successful firm.
The key? Keep learning. Keep growing. The IRS might update forms, clients might have tougher questions, but with the right skills and mindset, you’ll be ready.
Typical Questions
Below are common questions we get asked.
What education is required to become a tax preparer?
A high school diploma is typically the minimum education needed to become a tax preparer. Some states, like California, require completion of a tax education course approved by the California Tax Education Council (CTEC). Additional certifications, like the IRS Annual Filing Season Program, enhance professional credentials and improve career prospects.
How do I get a Preparer Tax Identification Number (PTIN)?
You can apply for a PTIN through the IRS website by providing your personal information, tax compliance records, and paying a small annual fee. This number is mandatory for anyone preparing federal tax returns for compensation. Most tax preparers begin their career by registering for a PTIN.
What is the difference between an enrolled agent and a tax preparer?
An enrolled agent (EA) is a federally-authorized tax professional with unlimited rights to represent clients before the IRS. In contrast, most tax preparers without this credential can only prepare and file tax returns. Becoming an EA requires passing the Special Enrollment Examination and completing continuing education.
How do tax preparers maintain their credentials?
To maintain credentials, tax preparers must complete continuing education annually. For example, CTEC requires 20 hours of ongoing education each year. The IRS Annual Filing Season Program also includes refresher courses in tax law and ethics. Maintaining professional credentials helps tax preparers stay updated and compliant.
What skills do successful tax preparers need?
Tax preparers must understand tax law, pay close attention to detail, and communicate clearly with clients. Skills in accounting, time management, and using tax software are essential. Keeping up with tax regulations and filing requirements ensures accuracy and helps serve both individual returns and small businesses effectively.
Can I work as a tax preparer without experience?
Yes, many tax preparers start with no prior experience, especially after completing a tax training course. Entry-level positions, internships, or volunteering with programs like VITA (Volunteer Income Tax Assistance) are excellent ways to gain hands-on experience while building confidence and credibility in the tax preparation field.
