Salary, Job Description, How To Become One, and Quiz
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Tax Preparers
Tax Preparers prepare tax returns for individuals or small businesses.
Table of contents
What they do
Tax Preparers prepare tax returns for individuals or small businesses.
- Interview clients to obtain additional information on taxable income and deductible expenses and allowances.
- Use all appropriate adjustments, deductions, and credits to keep clients’ taxes to a minimum.
- Prepare or assist in preparing simple to complex tax returns for individuals or small businesses.
- Compute taxes owed or overpaid, using adding machines or personal computers, and complete entries on forms, following tax form instructions and tax tables.
Typical day
On a daily basis, Tax Preparers use all appropriate adjustments, deductions, and credits to keep clients’ taxes to a minimum. They answer questions and provide future tax planning to clients.
A typical day for a Tax Preparer will also include:
- Review financial records such as income statements and documentation of expenditures to determine forms needed to prepare tax returns.
- Explain federal and state tax laws to individuals and companies.
- Compute taxes owed or overpaid, using adding machines or personal computers, and complete entries on forms, following tax form instructions and tax tables.
- Furnish taxpayers with sufficient information and advice to ensure correct tax form completion.
- Prepare or assist in preparing simple to complex tax returns for individuals or small businesses.
Other responsibilities
Besides their typical day, Tax Preparers also consult tax law handbooks or bulletins to determine procedures for the preparation of atypical returns. They may also answer questions and provide future tax planning to clients.
On a weekly to monthly basis, Tax Preparers calculate form preparation fees according to return complexity and processing time required. They might also check data input or verify totals on forms prepared by others to detect errors in arithmetic, data entry, or procedures.
In addition, they use all appropriate adjustments, deductions, and credits to keep clients’ taxes to a minimum.
Although specific duties may vary, many of them explain federal and state tax laws to individuals and companies.
To some Tax Preparers, it is also their responsibility to interview clients to obtain additional information on taxable income and deductible expenses and allowances.
What is the job like
Job satisfaction
Is this job meaningful
68% said they were satisfied with their job and 35% said they found their job meaningful.
My name is Dmytro Serheeiv. I’m a professional tax specialist with more than 10 years of experience in the private, public accounting, and government sectors. I’m currently a self-employed tax consultant and the leading tax consultant at PDFLiner.
My typical day
I had a small office near the central IRS department in my city, where both individuals and businesses came to me to receive instant consultations and direct tax assistance.
The typical day at the office included meeting individuals and entrepreneurs in random order and amount. it’s totally impossible to predict how many clients you will have during the day because all people have different tax profiles. However, I always expect to spend nights and days at the office when the tax day comes. Hordes of people start feeling nervous about their taxes and literally run to me in sweat to get quick help without complications. I even hire 1-2 assistants from the state’s tax law university to get help and provide them with intensive practice all at once.
Now I process all the requests online due to the pandemic. The entire workflow has become moderately paced and virtually non-emotional as I rarely meet people face to face to get access to their documentation. I usually wake up early in the morning to reach my desk at around 7 AM and start getting through my mail to fish out all the tasks and schedule them up for the day. In most cases, I have a surplus of tasks and delegate the simplest of them to students online to pay more attention to urgent and complicated cases.
Pros
One of the biggest benefits of being a tax specialist is independence and high earning potential. Most of us start from relatively low wages but reach surprisingly high yearly checks by gaining reputation and expanding the client base. It’s also very important to remember that most of your clients will need help seasonally, which means working late hours every day by the end of each financial year.
I really enjoy getting through documentation like a knife through butter, it feels great to me. I also love to see the relief on the faces of my clients, who are usually so stressed by all those forms.
Cons
It’s probably also the biggest disadvantage of my job because nervous people don’t always formulate their needs well enough, so I have to figure out the details like a professional detective.
You also have to spend a lot of time and nerves to reach the point of financial satisfaction as clients see you as a nobody when you start. That’s why I highly recommend gaining expertise in respected companies before starting your own business in the field.
You should also be ready to invest quite a lot of money into professional software when you start working independently.
Advice for students interested in this career path
There are many tax consultants on the market. You may feel like there are too many of them and it impossible to compete, but that’s not true, actually. Work hard to gain the best field experience. Start practicing in companies from the very first year in the university and you will realize that the competition isn’t that intense for those who know more than others. Update your knowledge base all the time to keep up with the development of the niche and you will be able to provide effective help to customers and gain their trust quite easily. Customers usually return to good tax consultants, so building a client base is much easier than in, say, the real estate niche.
Pros
Suitable for people who like to follow routines.
Suitable for people who value relationships between co-workers and customers and want to work in a friendly non-competitive environment.
This career is perfect for people who love to work indoors.
It is not too difficult to get into this career. Previous work-related skill, knowledge, or experience is required for this career.
Cons
Not suitable for people who like to work with designs.
Salary is below average.
Long working hours (More than 40 hours per week).
How much do they make
Average salary
Average hourly wage
Entry-level Tax Preparers with little to no experience can expect to make anywhere between $22,090 to $29,310 per year or $11 to $14 per hour.
| Salary by experience | Annual | Hourly |
|---|---|---|
| Highest (Top 10%) | $93,540 | $45 |
| Senior (Top 25%) | $65,960 | $32 |
| Median | $44,300 | $21 |
| Junior (Bottom 25%) | $29,310 | $14 |
| No experience (Bottom 10%) | $22,090 | $11 |
This table shows the top 10 highest paying industries for Tax Preparers based on their average annual salary.
| Salary by industry | Annual | Hourly |
|---|---|---|
| Legal Services | $79100 | $38.03 |
| Management of Companies and Enterprises | $64200 | $30.86 |
| Office Administrative Services | $63830 | $30.69 |
| Employment Services | $62370 | $29.99 |
| Computer Systems Design and Related Services | $56900 | $27.36 |
| Management, Scientific, and Technical Consulting Services | $56320 | $27.08 |
| Other Professional, Scientific, and Technical Services | $54630 | $26.26 |
| Professional and Commercial Equipment and Supplies Merchant Wholesalers | $52650 | $25.31 |
| Accounting, Tax Preparation, Bookkeeping, and Payroll Services | $52240 | $25.12 |
| Credit Intermediation and Related Activities | $51130 | $24.58 |
View more salary by industries here.
Where can they work
Where can Tax Preparers work? Here is a table showing the top 10 largest employers of Tax Preparers including the average salary in that industry.
| Employers | Total Employed | Annual Salary | Hourly Wages |
|---|---|---|---|
| Accounting, Tax Preparation, Bookkeeping, and Payroll Services | 59950 | $52240 | $25.12 |
| Management, Scientific, and Technical Consulting Services | 730 | $56320 | $27.08 |
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities | 470 | $ | $* |
| Management of Companies and Enterprises | 110 | $64200 | $30.86 |
| Employment Services | 110 | $62370 | $29.99 |
| Office Administrative Services | 80 | $63830 | $30.69 |
| Individual and Family Services | 60 | $50260 | $24.16 |
| Credit Intermediation and Related Activities | 60 | $51130 | $24.58 |
| Computer Systems Design and Related Services | 60 | $56900 | $27.36 |
| Other Professional, Scientific, and Technical Services | 50 | $54630 | $26.26 |
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What is the work day like
Working hours
Working schedule
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Telephone
How often do you have telephone conversations in this job?
Group discussions
How often do you have group discussions in this job?
Public speaking
How often does this job require you to do public speaking?
Level of competition
How much competitive pressure is in this job?
What is the work environment like
Office-style environment
Indoors in an environmentally controlled condition
Warehouse-style environment
Indoors in a non-controlled environmental condition such as a warehouse
Outdoors
Outdoors exposed to all weather conditions
Outdoors – Under Cover
Outdoors but under cover (e.g. structure with roof but no walls)
How to become one
Difficulty to become one
Required level of education
What level of education do you need to perform the job?
Relevant majors
Taxation
Accounting
Accounting Technology and Bookkeeping
Relevant work experience
How much related work experience do you need to get hired for the job?
On The Job Training
How much on the job training do you need to perform the job?
Should you become one
Best personality type for this career
People with this personality type likes to follow set procedures and routines. They prefer working with data and details more than with ideas.
People with The Builder personality type likes practical and hands-on work. They prefer working with plants, animals, and real-world materials like wood, tools, and machinery.
People with The Thinker personality likes to work with ideas that require an extensive amount of thinking. They prefer work that requires them to solve problems mentally.
People with The Artist personality likes to work with designs and patterns. They prefer activities that require self-expression and prefer work that can be done without following a clear set of rules.
People with The Helper personality type likes to work with people and in teams. They prefer work that allows them to build relationships with others.
People with The Leader personality likes to start and work on projects. They also like leading people and making many decisions.
People with The Organizer personality type likes to follow set procedures and routines. They prefer working with data and details more than with ideas.
You can read more about these career personality types here.
People who are suitable for this job tend to like following set procedures and routines. They like working with data and details more than with ideas.
They also like starting up and carrying out projects. They like leading people and making many decisions. Sometimes they require risk-taking and often deal with business.
Take this quiz to see if this is the right career for you.
Work Values
Which values are the most important to a person’s satisfaction for this job?
You are someone who is results oriented. You prefer work that allows you to utilize your skills and abilities while at the same time giving you a sense of accomplishment.
You are someone who values job security, steady employment, and good working conditions. You also prefer work that keeps you busy all the time with something different to do every day.
You are someone who values job advancement and leadership roles. You prefer work that receives recognition for the work you do and jobs that are looked up to by others in the company and your community.
You are someone who likes to provide a service to others. You prefer a work environment where you can work with your co-workers in a friendly non-competitive environment.
You are someone who values a company that stands behind their employees. You prefer a work environment where everyone is treated fairly and is being supported by the company.
You are someone who likes to work on your own and make your own decisions. You prefer work that requires little supervision and are allowed to try out your own ideas.
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