Tax preparers are professionals who help individuals and businesses file their tax returns. They may work for accounting firms, tax preparation companies, or as independent contractors. Tax preparers have different levels of education and certification, depending on the type and complexity of the tax returns they handle.
Some of the common tasks that tax preparers do are:
- Gather and organize financial records and documents from clients, such as income statements, receipts, deductions, and credits.
- Review the information and check for accuracy, completeness, and compliance with tax laws and regulations.
- Use tax software or online platforms to enter the data and calculate the tax liability or refund amount.
- Advise clients on tax-saving strategies, such as retirement plans, charitable donations, or education expenses.
- Prepare and file federal, state, and local tax returns electronically or by mail, depending on the client’s preference and the deadline.
- Communicate with the IRS or other tax authorities in case of any issues, errors, or audits.
- Keep up to date with the latest tax laws and changes that may affect their clients.
Tax preparers may specialize in certain types of tax returns, such as individual, corporate, partnership, estate, trust, or nonprofit. They may also have different credentials and qualifications, such as:
- Enrolled agents (EAs): These are tax preparers who have passed a comprehensive exam administered by the IRS and have unlimited rights to represent taxpayers before the IRS.
- Certified public accountants (CPAs): These are accountants who have met the education and experience requirements of their state board of accountancy.
- Annual filing season program (AFSP) participants: These are tax preparers who have completed a voluntary program of continuing education and ethics training offered by the IRS. They have limited rights to represent taxpayers before the IRS.
- Unenrolled preparers: These are tax preparers who do not have any formal credentials or qualifications. They can only prepare basic tax returns and cannot represent taxpayers before the IRS.
Tax preparers play an important role in helping individuals and businesses comply with their tax obligations and maximize their tax benefits. They need to have strong analytical, mathematical, and communication skills, as well as attention to detail and accuracy. They also need to follow ethical standards and protect their clients’ privacy and confidentiality.