Drake Software blog for tax pros, covering tax, IRS news, and more

How to Become a Tax Professional

How to Become a Tax Professional

Tax professionals play a crucial role in assisting individuals and organizations in navigating the complexities associated with maintaining accurate financial records and adequately submitting their taxes. Most tax preparers are detail-oriented, organized, and excel in working with numbers; whether you are seeking more general information or have experience you want to translate into a professional capacity, possessing these qualities is a great starting point for delving into the industry.  

In this blog post, we review the education and certification requirements for how to become a tax professional and provide insight into securing a tax preparer job. We will also provide information on extra resources, including what is available from us at Drake Software, to ensure you take your next steps with the confidence and preparation you need. 

Why Tax Preparation?   

One of the primary sources of appeal for becoming a tax professional is the high demand and job security. After all, any entity or individual receiving income in our society is responsible for filing taxes, and there will always be businesses and individuals that require assistance in correctly fulfilling their tax obligations. This demand offers exceptional stability; even outside of tax season, a role as a tax preparer can yield many alternative endeavors that are equally fulfilling and fruitful. Read our blog post about additional job opportunities for tax preparers 

Moreover, tax preparation as a whole offers continuous learning and growth opportunities. Tax regulations are constantly evolving, contributing to the dynamic nature of the industry, in addition to the value attributed to possessing a depth of knowledge on these subjects.   

You might also be interested in tax preparation if you are attentive to detail, enjoy solving complex problems, and can maintain high communication and integrity. Preparing taxes requires high precision and meticulous accuracy, and many preparers must navigate difficult circumstances and determine solutions regularly. Likewise, practicing effective communication and ethics will amplify the rapport you build with clients, helping you establish trust and confidence with your professional constituents. These qualities prove pivotal in allowing many tax professionals to thrive in their roles, so compatibility with these characteristics may be your rationale for pursuing a career as a tax preparer.  

Educational Requirements & Timeline 

Not every role as a professional tax preparer will require a formal degree in accounting, finance, or business. However, obtaining a related degree will likely enhance your marketability as an employee, expand your credibility in the field, and supplement important knowledge in the execution of the functions of the role. Consider the following educational paths:  

  1. Bachelor's Degree in Accounting/Finance: This type of degree is the most common avenue for pursuing comprehensive knowledge in this field, providing a thorough understanding of subjects like tax law, auditing, financial reporting, and principles of accounting. Demonstrating a strong level of commitment and expertise, this degree would serve as an asset in a career as a tax preparer.   
  1. Associate’s degree in Accounting: This is a slightly shorter route to obtaining a degree but will still provide a focused program that entails a solid mastery of fundamental accounting principles, tax regulations, and related software. You may seek additional education after completing this degree, but if not, this will provide a basis of relevant industry knowledge.  
  1. Tax Preparation Courses: Whether attending a higher education institution or searching online, there are a plethora of available tax preparation courses and programs. These courses often range in their content from varying types of tax forms, explaining deductions and credits, or relaying updates in tax laws. As a streamlined approach, you can quickly work through this style of education and efficiently acquire the necessary skills for this profession.  
  1. Special Enrollment Examination (SEE): If you are interested in pursuing an Enrolled Agent (EA) route in your career as a tax professional, you need to pass the SEE, a comprehensive test that tests your knowledge of federal tax laws. This designated tax preparation role is authorized by the U.S. Department of the Treasury to represent taxpayers to the IRS, focusing on representation during audits, collections, and appeals. You can visit the IRS website for more enrolled agent information or research the SEE. 

Depending on your educational pursuits and existing background, the time required to become a tax preparer varies. Bachelor's degrees are typically four years, and Associate's degrees normally take two years to acquire. Tax preparation courses, by contrast, can be more diverse and program-specific.  

No matter your educational background, as aforementioned, this is a highly dynamic and ever-evolving field. Investing in your education provides a foundation for your role as a tax preparer and will position you for success as you continue to seek up-to-date knowledge and educational requirements within the role.  

Certifications and Other Requirements  

The Internal Revenue Service (IRS) maintains specific requirements for tax preparers who receive compensation for their labor. As is customary within the industry, tax regulations are often modified, so verifying what statutes are currently in place is necessary. Here are the requirements in place as of September 2021:  

  • Preparer Tax Identification Number (PTIN): Tax preparers must obtain a PTIN from the IRS before preparing returns. This identifier is used to trace tax preparers and must be included on all returns they prepare. There is an associated fee and guidelines for renewal, so read more about obtaining a PTIN from the IRS here 
  • Continuing Professional Education (CPE) Credits: While there is no longer an IRS-sanctioned competency test, tax preparers are encouraged to pursue continuing education to remain current in their tax regulations and procedures. Participating in these programs approved by the IRS enhances your expertise and ensures you avoid any potential penalties. We have a helpful article that explores more specific guidelines for IRS CPE requirements 
  • Some states may also have specific requirements for tax preparers under their jurisdiction. We recommend researching your state to remain eligible to provide services where you are located.  

Seeking Employment  

After completing your education and training requirements, embarking on a job in the tax preparation industry will provide you with tangible experience that strengthens your instruction. There are several strategic pursuits that will jumpstart your career, and we have listed some below.  

  • Accounting firms most often employ tax preparers to assist clients with tax planning, filing tax returns, and IRS compliance. Whether seeking a local or national opportunity, ample openings across the industry will provide invaluable experience to build upon your expertise and introduce you to clients. Check company websites regularly for open job postings or reach out directly for a more personal approach to inquire about any available opportunities.  
  • Self-employment is another option for tax professionals who choose to provide personalized services to clients. This route allows you to set your own hours, build a client base, and learn about tax operations from a business standpoint holistically. Keep in mind that self-employed tax preparers must undergo strategic planning, lots of marketing endeavors, and deep professional development.  
  • Local, state, and federal government agencies also hire tax professionals to ensure compliance with tax laws and assist taxpayers with filing their returns. You can find these positions by checking government job boards and websites for availability, or work directly for the IRS seasonally to establish your early experience as a tax professional.  
  • Finally, networking is an indispensable tool. Attending conferences, joining professional groups, and connecting with other tax preparers are extremely advantageous to expand your network. Drake Software is present at various tradeshows nationwide, which you can find here, to contribute to your success as a tax preparer. You may also prefer to participate in online communities, such as forums or LinkedIn groups, focused on accounting and tax-related topics that provide a platform to connect with like-minded professionals and stay updated on industry trends.  

Additional Resources 

If you are looking for more information about how to become a tax professional, these additional websites are good resources for information and guidance.   

  • Internal Revenue Service (IRS) Website: The official website of the IRS is a broad resource for tax regulations, different forms, publications, and regulation updates. You can read more about the required tax preparer credentials here, or learn about the Annual Filing Season Program here. Visit www.irs.gov to explore more.  
  • The National Association of Tax Professionals (NATP) is a professional group for tax preparers that provides extra resources and support. For members, the NATP website offers publications, research tools, webinars, and community forums for idea sharing and collaboration amongst fellow professionals.  
  • The National Society of Accountants (NSA) is another organization that supports tax professionals. By becoming a member and visiting their website, you have access to information, education, group advocacy, and webinars that help you develop as a tax professional.   
  • At Drake Software, we provide tax preparation software specifically designed to serve tax professionals. While we offer software, we also are set up with tools and resources to ensure you are well-equipped for success. Visit our guide for how to get set up with the IRS and with Drake Software here 
  • Finally, state taxation websites can also provide state-specific information and resources for tax preparers. Whether you need a certain form or are seeking more information for tax laws in your state, you can search for your state's taxation department website to learn more.   

Overall, becoming a professional tax preparer can require a combination of education, certifications, and on-the-job experience. Based on your personal qualities and skills, you can pursue a rewarding and successful career by learning and applying the intricacies of tax regulations. In your job search, remember to utilize available resources, including the tools we offer at Drake Software for your ease and flourishing as a tax preparer.   

Emily McCollin