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How to Become a Tax Preparer in Texas
Preparing Taxes in Texas
If you live in Texas and you’re good with numbers, working as a tax return preparer is a good way to earn money. No degree is required, and you can train for this career in a short period of time. Many working parents also appreciate the scheduling flexibility that tax preparation work can offer.
According to the United States Bureau of Labor Statistics, tax preparers complete annual income tax return forms, working for both small businesses and individuals. This job typically involves reviewing financial documents provided to you by your clients and then entering this information into state and federal tax forms, such as the 1040. As a tax preparer, you’ll be expected to identify possible deductions and tax credits, seeking to minimize a client’s tax liability while maximizing his refund.
No license is required for tax preparers in Texas, which is consistent with the laws in most U.S. states. Still, many tax preparers opt to receive some kind of training so that they can provide the best service to their clients. Many national tax preparation companies offer free or low-cost training to those interested in becoming a tax preparer. In fact, the training program offered by one major tax preparation company requires only 60 hours of instruction in most states. Some vocational schools also offer training, but you may want to compare the cost of these programs to those provided free by tax-preparation companies.
Tax preparation companies provide free training, so they can recruit new preparers each tax season. Completing a training program is not an offer or guarantee of employment: If you decide you want to work for the company, you’ll still need to complete an application and undergo an interview process.
Before you can begin preparing tax returns, you’ll need to obtain a preparer tax identification number (PTIN) from the IRS. You can do this online, and no fee is involved. In addition, the IRS provides training courses and continuing education programs for tax preparers. In fact, if you would like to get some real-world practice in tax preparation before going professional, you can contact social service agencies in your area to learn about becoming a volunteer tax preparer for people in your community.
According to the BLS, the national median annual wage for tax preparers, as of 2016, was $36,550.This means that 50 percent of tax preparers made more than $36,550 and 50 percent made less.
As a tax preparer, you will usually work in an office setting. If you work for a tax preparation company, you may work in one of their offices or even a “pop-up” tax center set up in a grocery or department store. If you’re self-employed, you have the option of working from home or a standard office. It’s important to keep in mind that tax preparation is a seasonal business one that primarily runs from January until the middle of April. Things may pick up again in October, which is when those who have received a six-month extension are required to submit the returns. Expect to be extremely busy around deadline periods: You may need to ask for cooperation from your family during this time.
Years of Experience
According to a survey by PayScale.com, tax preparers can expect to earn more money as they gain job experience. Survey results showing the correlation between years on the job and income are below:
- 0–5 years: $25,000
- 5–10 years: $31,000
- 10–20 years: $36,000
- 20+ years: $41,000
Job Growth Trend
The BLS does not track employment growth for tax preparers specifically. Instead, this occupation is grouped with others in the classification of “Professional, Scientific and Technical Services.” Employment in this segment is expected to grow between 10 and 14 percent between 2016 and 2026. However, note that this covers a wide variety of professional service jobs, and it’s not specific to tax preparers.
- BLS.gov: Tax Preparers
- PewTrusts.org: Most States Have No Rules for Independent Tax Preparers
- IRS.gov: IRS Tax Volunteers
- IRS.gov: IRS-Sponsored Continuing Education Programs
- IRS.gov: Link & Learn Taxes
- O*Net Online: Tax Preparers
- PayScale.com: Tax Preparer Salary
- HRBlock.com: How to Become a Tax Preparer
- IRS.gov: PTIN Requirements for Tax Return Preparers
Lainie Petersen writes about business, real estate and personal finance, drawing on 25 years experience in publishing and education. Petersen's work appears in Money Crashers, Selling to the Masses, and in Walmart News Now, a blog for Walmart suppliers. She holds a master's degree in library science from Dominican University.