If you’re considering a career in tax prep, there are a few things to consider. You’ll want to know the qualifications of a credentialed preparer versus a non-credentialed one. And you’ll want to make sure you have some experience in your chosen niche to set yourself apart from the competition. In this article, we’ll cover each of these topics, including cost and software options.
While you may not think of an Enrolled Agent as a tax preparation professional, they do exist. Known as Enrolled Agents, they represent individuals and businesses before the Internal Revenue Service (IRS). Their training includes the interpretation of tax codes and regulations, as well as representation and professional development. They must also complete 72 hours of continuing education each enrollment cycle. Enrolled Agents can prepare taxes for individuals, businesses, and estates. They are also qualified to represent taxpayers before all administrative levels of the IRS.
While Enrolled Agents are professionals, they are not the only professionals who prepare taxes. Private practices, law firms, and banks all need Enrolled Agents. There is a wide range of experience available among these professionals. You can also hire a CPA to help you prepare your tax return. In order to hire an Enrolled Agent for tax prep, you will need the following:
Tax preparers who do not hold professional credentials are referred to as non-credentialed. These individuals may be seasonal tax preparers at a tax store or IRS Volunteer Income Tax Assistance Program volunteers. Non-credentialed tax preparers must complete an annual filing season program and PTIN and receive a certificate. The IRS has a list of 10 things to look for when choosing a tax preparer.
IRS-certified tax experts, such as Richard Furlong, are often sought after by clients. Those who participate in the IRS’s Annual Filing Season Program take continuing education (CE) credits to stay current with the latest tax laws. Those with the AFSP credential are able to represent clients in front of the IRS. This credential can be valuable for the examiners of your tax return.
There are several different software options for tax preparation, and your choice may be dictated by your level of education. If you are a complete beginner, you should opt for a software that walks you through the tax preparation process. However, if you are more experienced, you should go for a more complicated program that allows you to manipulate your taxes. The comparison chart below includes the MSRP of a number of tax preparation programs.
Cost is another consideration, but this is not always public. Most tax software options are tailored to suit the needs of individual taxpayers, and the cost will depend on the type of software you purchase. Some tax preparation software programs charge a flat fee for unlimited returns; others charge separately for individual and entity returns. Not all vendors make their pricing available publicly; they prefer to discuss it with potential customers. Fortunately, the survey results are still useful, and the results are quite compelling.
The cost of tax preparation varies significantly depending on the region. For example, a form 1040 with state return and Schedule A typically costs $137 in the East South Central region. The Pacific region, on the other hand, costs about $292 on average. For all states, however, the cost of tax preparation can be significantly lower. In addition, tax professionals in each region may charge more than the national average. For this reason, it is advisable to research the costs of tax preparation before hiring a preparer.
If you choose to have a professional prepare your taxes, make sure to ask them if they will file your state returns electronically. You should also ask if the price includes suggestions on how you can maximize your tax credits and deductions. Tax preparers may charge for each form. Additionally, some may handle communication with the IRS on your behalf and make corrections to errors on your return. Make sure to inquire about the fees of all tax preparation services in advance.