By Tim Frye
If you are looking to become a tax preparer, then of course you would want to know how difficult the process is before you jump right into the arena of tax preparation. As with any profession, the job seems a lot harder when you are looking in from the outside. That is not to say preparing taxes is easy by any stretch of the imagination, but the modern day tax preparer can get away with being a lot less educated due to the proficiency of today’s tax software. This article will answer the question of how hard it is to be a tax preparer in in turn give you some vital information when you start on your path to become one of the best tax pros in the business.
How Complicated is the Tax Code?
When you are first learning about the tax code it can all seem so overwhelming! You are hearing about these foreign things called credits, deductions, personal exemptions, and so on. The material can also be extremely dry, depending on the author of the course you are taking. There is no mistaking the fact that it will take a long time to get accustomed to the constantly morphing tax code. However, if you can get the basics down you can be ready to roll and prepare taxes for money within months of starting you tax prep course. The first year doing taxes should be spent preparing simple to intermediate returns. And most likely you won’t run into anything too complicated because people are not ready to trust their complicated returns to a rookie. So at the basic income tax level, things are fairly simple, and with the advent of super good tax software doing most of the work for you, it is pretty much date entry at the basic tax level. The real obstacles approach when you get into the long form arena with clients who are spreading their finances around which in turn makes their taxes much more complicated. And makes your mistakes that much more magnified.
What Type of Tax Returns Should I be Preparing After My First Year?
So after your first year preparing taxes you should definitely have the basics down you can move on to preparing long forms to get used to that part of the game. Unless you have a ton of clients, it can be difficult to make good money just doing short forms because the service is relatively inexpensive. Long forms, on the contrary, can bring in as much as $500 per client. To be good to great at preparing long forms you must be very knowledgeable about tax credits and deductions, and must be in turn able to convert that knowledge into actual money saved for your client. At the intermediate level taxes begin to get pretty difficult regardless of how much the tax software will help you. If you get good at preparing long forms you are going to be making good to great money and with that have great client retention because your people will trust you and keep coming back.
How Hard is to be an Enrolled Agent?
At the advanced enrolled agent level tax preparation gets tough. That is why it is important to approach the complicated returns gradually over the years and not rush into any crazy tax returns in your first few years preparing taxes. You will mess up and you will lose a client, and your mind, in the process. It is safe to say after five years of preparing taxes you should be an expert if you are really putting your work in. You must be keeping up to date with all the latest tax codes changes that are relevant to your client.
So, in conclusion, basic tax preparation is essentially data entry and is not very difficult at all. As you go into the intermediate stages of tax preparation, you are going to be required to know much more about tax code and its laws. And as you approach the enrolled agent arena, you should be well versed in all things tax related.
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