How do i get certified to prepare taxes?

Question

i'm currently in the insurance business and would like to start preparing taxes but i don't know if i have to take classes or take a test. does anybody know (prefferably out of experience) what i need to do??

Answer 1

Competence is not required except in California, Oregon and Maryland. In all other states all you have to do is hang out your shingle. Some major chains, particularly H&R Block & Jackson Hewitt offer very basic classes to the public. If you do well in them, you may be offered a low paying seasonal job in one of their offices.  

If you want to operate at a professional level, you should study for the special enrollment examination to be certified as an enrolled agent.  This will allow you to represent taxpayers the same as CPAs and attorneys. There is information on the link to the National Association of Enrolled Agents web site.

Answer 2

3 answers-

1)  Anyone can set up an office and prepare taxes.  I don't recommend this, but no certification or experience is necessary.  A CPA is someone authorize to attest to information to be used by a third party, usually financial statements- it has very little to do with tax preparation.  (note that a CPA has the ability to practice before the IRS in the event of a dispute while an unenrolled preparer may not be able to)

2)  Join a public accounting  firm- if you have a business background and are willing to put in the hours, there will be some firm out there willing to give you a chance.  This is the best option as experience is more important in the profession than education.

3)  Unfortunately most firms like to hire newbies out of college with very little experience.  If you find trouble finding a spot in a firm due to your age/experience, you may consider taking courses in accounting and taking the CPA exam as this will greatly improve your appeal to a public accounting firm.  State boards provide CPA licenses so the requirements vary by state, but you can refer to www.nasba.org or www.cpa-exam.org to learn more about the exam and licensing requirements for each state.

Answer 3

In most states, you do not need to take a test but you should take some training.  The most you need to do is file for a tax preparers ID.  Many of the returns you will come across involve property and stock transactions so you will need to know how to handle all of the tax implications on variations of these transactions. Companies like H&R Block oftten hold classes as does most community colleges.  Many accountants, especially with a CPA are often quite successful in this area.

Answer 4

As the others have stated, most states do not require certification for tax preparers. California and Oregon are two exceptions that I know of. There may be others.

As one person stated, a CPA can certify financial statements, but may have little to no experience in taxation issues.

A CPA and an attorney may represent clients before the IRS. Another option is the Enrolled Agent. An enrolled agent is authorized to represent tax payers before the IRS just like Caps and attorneys They get their authorization to do so by the federal government, however, while CPAs and attornys are regulated by the states.

Unlike a CPA that may or may not have training in tax issues, all enrolled agents have tax knowledge and training. We are required to take a minimum of 24 hours of tax training each year to maintain our certification.

H & R Block has a good basic class to introduce you to the basic forms for personal income tax. If you choose to work for block for experience, you can tax advance level classes that cover specific areas of taxation. This includes, gift tax, estates and trust income tax, estate tax, partnerships, corporations, rental real estate, Schedule C, retirement income. The list goes on.

I have worked for Block for 16 years and became an Enrolled Agent 5 years ago.