What is a Tax Preparer?
A tax preparer is a professional that is qualified to calculate, file and sign income tax returns on behalf of individuals and businesses. They can also be a representative of taxpayers during IRS examinations of tax returns. This profession may have several sort of job titles, along with different certifications and educational levels. You just need to carefully choose which type of tax professional will best suit your situation.
When tax return filing comes, most of the taxpayer nowadays hire a professional tax preparer. The most personal and sensitive details of the taxpayers – marriage, income, children and social security number, they trust it to these professionals.
What does a Tax Preparer do?
Filing of tax returns should be done by people and companies yearly. There are different types of tax preparation professionals, as well as several levels of experience and appropriateness to an individual’s personal tax situation. Registration is required by the Internal Revenue Service (IRS) to all paid tax preparers. They must obtain a Preparer Tax Identification Number (PTIN) and include it on all returns they sign.
The following is an overview of the various types of tax preparation professionals:
Tax Preparers for Chains or Local Outlets
These professionals are trained to some extent, but their training and experience could be at any level. A lot of them do this as a second job, and only for four months out of a year. If an individual’s return is a fairly simple one, this may be the most inexpensive option for them. If there is any problem to their return, some of these preparers may be lacking on background or knowledge on how to maximize on certain deductions.
Enrolled Agents
To be an enrolled agent, one should have license from the federal government. One should also either been a former IRS employee (for at least ten years) or have passed an IRS exam. Also, a completion of the required credit hours every year in tax regulations and accounting methods and with expertise in tax planning and the preparation of tax returns. A lot of them specialize in a specific tax area, and can be regarded as an individual with the IRS and state tax agencies if there are any questions about their return.
Certified Public Accountants
Guiding an individual through complex financial situations are what they’re best at. They are the best option when someone encounters financial situations like retiring recently, started or closed a business, gotten divorced or had any other significant lifestyle changes that have impacted their financial situation. They can configure an overall tax plan for an individual and can also represent them before the IRS. In a mid-sized to large firm, the initial work is done by a staff person who has up to a few years of experience. A more experienced person will review the work. The senior people in the company be likely to focus on matters such as planning (the tax laws are complex and there are different ways to do things that can reduce the taxes) and making decisions on more complex issues.
Tax Attorney
Clients who have large assets and business dealings or the ones interested in sheltering part of their income are handled by these tax attorneys. They are tax specialists, expert with complex corporate matters, know the latest tax laws and are excellent in tax disputes. But despite that, they may not be as eligible in preparing actual tax returns.
What is the workplace of a Tax Preparer like?
Accounting firms, franchise tax businesses, law firms – these are just some of the variety of organizations where tax preparer works. Plenty of these seasonal tax workers have other jobs they work year-round. For them, tax-preparation work adds a second shift during tax season, so their total workday might last 12 to 14 hours.