Becoming a tax advisor, either to supplement your current income or as a full-time job, can be a rewarding and well-paying job. In the United States, for example, the average tax consultant earned $ 44,000 annually in 2014. Additionally, tax consultants deal with large sections of the public and, in many cases, can deliver good news to their clients about significant cash back to the customer. Review your returns from previous years. You will also have a lot of job security: people have to file their taxes every year regardless of the state of the economy. Although it may seem that being a tax consultant requires a lot of education and training, almost anyone can prepare to be in a few months. Read this article to find out how.
Part 1 of 3: Meet the Academic Requirements
Step 1. Meet the minimum requirements
In general, tax consultants must have a high school diploma or its equivalent. That means you don't need a bachelor's or associate's degree to start flourishing in the tax consulting business. However, aspiring tax consultants should keep in mind that the job requires some basic skills. While you're in high school, you could prepare for work by cultivating:
- strong math skills;
- basic computer skills and typing;
- customer service skills and experience;
- a basic understanding of tax rules (the necessary forms and deadlines).
Step 2. Evaluate your training options
Many tax consultants need to prepare a little before they can start working, as they do not have any formal training in the field. In these preparation courses, students learn about topics such as tax filing, taxpayer questions, exceptions, tax calculation, and refund schedules. Many institutions offer these courses, so it is best to evaluate several options before choosing the best one for your situation.
- Some tax consulting companies offer practical training, so try to apply directly for a job and see if they offer this type of training, which could save you a considerable amount of time and money. To find work, search online job portals before the start of tax season (in January).
- In the United States, enroll in a training program offered by the Council on Accounting and Tax Accreditation (ACAT) or the National Association of Tax Professionals (NATP). Check their web pages for more information.
- Many community and technical schools, as well as colleges, offer short certificate programs that can qualify you for an entry-level position. To find out more, search for programs in your area. Some of these programs may also be available online.
Step 3. Complete the tax training
No matter where you have decided to study, you will have to finish your studies before becoming a professional tax advisor. If you can, try to take advanced courses that include information on topics like estate taxes, capital gains, and retirement funds. This knowledge will make you stand out from the crowd.
- Be sure to save any information or notes you get from your classes, as you may need them later if you choose to pursue a certificate or higher education.
- Also, make sure that any skills you have acquired in tax consulting are appropriate for the state in which you will practice, as the requirements for filing taxes vary from state to state.
Step 4. Think of a higher degree of training
Although a simple course in tax consulting can prepare you for most of the roles required for tax filing, you may also want to reach higher and become a certified tax specialist or even a chartered public accountant or tax attorney. Obviously, these degrees will demand much more studies and expenses, but the opportunities for advancement and salary increase are much better. Without additional study (or your own tax consulting firm), there is very little room for progress in the tax consulting industry.
Part 2 of 3: Get Certified
Step 1. Obtain a Tax Advisor Identification Number (PTIN)
In the United States, before a tax advisor can begin work, they must also meet some state and federal requirements. First, ask the Internal Revenue Service (IRS) to assign you an identification number, by submitting your personal information (including your social security number), a tax return from the previous year and payment at a rate of fifty dollars. You can do this process virtually, through its website: https://www.irs.gov. By obtaining the identification number, you will register as an "unaffiliated advisor", which will give you the minimum level of authorization to prepare federal tax returns.
Keep in mind that this application will require you to disclose and explain any convictions for tax crimes or problems with your tax obligations
Step 2. Obtain state registration
To be fully licensed, you will likely also need to obtain state registration. However, these requirements vary by state. Verify the requirements that apply to your state by searching the internet for the words "tax advice record (your state)." However, in some cases, according to state law, you will be exonerated from this registration or not required.
For example, certified public accountants, tax attorneys, and affiliated agents (tax professionals evaluated by the IRS) are, in most cases, exempt from state registration
Step 3. Evaluate the possibility of becoming an affiliate agent
An affiliate agent is a tax advisor who has demonstrated proficiency in preparing tax returns. Tax consultants can become affiliate agents either by working for the IRS for a specified period or by passing a special affiliation examination (SEE) and submitting an online application for such status. After you pass the exam or get the required work experience, you can apply for affiliate agent status by completing IRS Form 23 and submitting to a background check.
Step 4. Consider taking the IRS exam
In 2014, the IRS introduced the Annual Tax Season Program. This program offers annual continuing education courses and a qualification exam for tax advisers, granting them the status of "registered tax advisers". You can begin the qualification process through this program by enrolling in classes from an approved continuing education provider in your area. You can find the list of approved providers here.
Although this program is currently voluntary, it can give you the credibility you need to be successful, especially if you plan to start your own tax consulting business
Part 3 of 3: Find a job
Step 1. Work for a tax preparation consultancy
Many tax consultants begin their careers by working for an established tax preparation consultancy. These companies will train you on state and local requirements for filing taxes, and can help you with any difficulties you may have at first. After getting this experience, you will be more prepared to change jobs, start your own business, or study more.
- The biggest advantage of doing this type of work is that many tax consultants offer free practical training and continuing education.
- While this type of job is a great first step for a tax advisor, you will only find employment during tax season, which will put you out of work for about two-thirds of the year. This is great for part-time workers, but if you want to be a full-time tax consultant, you may have to look for other types of jobs.
Step 2. Work for an accounting or legal firm
In addition to companies specializing in preparing tax returns, there may also be jobs available in accounting or legal firms that offer tax services. In these roles, you will likely support a certified public accountant or tax attorney in preparing their clients' tax returns. In other words, you will be doing more than just entering customer information; In addition, you may be dealing with certain tax procedures or the complexities of tax law.
- Finding this kind of job could be easier if you are able to differentiate yourself from other tax advisers by specializing in certain types of tax or business returns. For example, perhaps you could specialize in filing certain kinds of complex taxes, such as those on international assets.
- These opportunities may also be available from many other types of companies, so be sure to check online job boards and newspaper classifieds for new opportunities.
Step 3. Start your own business
With enough experience or credentials, you can start your own tax return preparation business as an independent tax advisor. Start by publicizing your services to the community and begin to develop your customer base. With friendly and reliable service, you may soon find that your business could grow and flourish. Over time, you may even be able to open another franchise and hire other tax consultants to do the work for you.
- It may be a good idea to start with family and friends before moving on to other clients. This could help you get off to a stress-free start as you fine-tune the details of the tax filing process. From there, you can distribute business cards and rely on the recommendations for more business.
- This will be the best choice if you want to work as a part-time tax advisor. It's easy to run a tax consulting business out of your home and charge lower prices than some of the more renowned tax consultants.
- If you want additional work during the year, also consider offering your services as a tax consultant or personal accountant to clients for whom you prepare tax returns.
Tax consultants can also demonstrate their experience by obtaining a certificate from the Accounting and Tax Accreditation Council (ACAT), which requires a minimum of three years experience in tax return preparation, in addition to passing a test
- The job can be stressful, as any mistake could cost the client a lot of money. Plus, customer stress can be contagious.
- Unless you get more training (as an affiliate agent or tax accountant), you may only find work during tax season, between January and April.
- Tax consultants often do not receive benefits because they do their work on a seasonal basis.