What is a tax preparer?

What is a tax preparer? 

A tax preparer is a person who prepares, calculates and files income tax returns on behalf of individuals and businesses. 

The tax preparation space is a 11 billion dollar industry. With that being said there is a great demand for tax professionals.  

There are 4 types of tax preparers. CPA, Enrolled Agent, Tax Attorney, and non credential tax preparer. 

In most states there are no licenses, degrees, or special licensing needed to become a tax professional. I highly suggest checking your state requirements. 

In most cases you just need to take  a quality tax course, obtain a PTIN, and check your state requirements to begin a fast tracked career in the recession proof tax industry. 

Each year you should continue your education to be up to date on the tax code and all the latest updates. 

Let’s break down the types of tax preparer’s and see where you may fall in this category. 

CPA- Certified Public Accountant is a person licensed by the state to offer accounting services to the public. 

EA-Enrolled Agent- An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee.

Tax Attorney- Is a person who is licensed to practice law. Most states require an attorney to have a law degree and pass a test administered by the bar association. Like CPAs and Enrolled agents they have unlimited rights to represent a client before the IRS. 

Okay, Last but not least is the 

Non-Credentialed tax preparer- Tax preparer that is an individual that can prepare taxes without any professional credentials or certificates from an external organization. This is the type of tax professional I am most familiar with. I have been practicing and making a living in this field for the last decade.