Educational Requirements for Tax Professionals
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This presentation discusses the educational requirements that an individual must possess prior to becoming a professional tax preparer.
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Educational Requirements for Tax Professionals
- 1. EDUCATION REQUIREMENTS Charles Davidson, Accelerated Tax Systems
- 2. This presentation discusses the educational requirements necessary for an individual to become a tax professional If you have questions, please contact: Charles Davidson Accelerated Tax Systems davidson@acceleratedtaxsystems.com www.acceleratedtaxsystems.com Education Requirements Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
- 3. Education Requirements Do not need to be study accounting, mathematics, or business No college degree required No minimum education required Some states require qualifying education California and Oregon Check your local requirements Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
- 4. Education Requirements Basic tax education is important Tax law is a complicated subject to learn Law changes every year Most companies will not hire someone without experience Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
- 5. Education Requirements Basic tax education is important Tax law is a complicated subject to learn Law changes every year Most companies will not hire someone without experience You have an ethical obligation to remain current within your practice area Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
- 6. Education Requirements Basic tax education is important Tax law is a complicated subject to learn Law changes every year Most companies will not hire someone without experience You have an ethical obligation to remain current within your practice area Check state requirements for qualifying / continuing education Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
- 7. Education Requirements Recommendation: Basic tax education course for everyone getting started in this business Annual program of continuing education to remain current with tax law changes Options: Start with state requirements (if any) Create your own strategic educational plan Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
- 8. Accelerated Tax Systems is a full-service company that provides the products, services, and resources that help you create and grow a successful tax practice. Tax Education Training Software and Bank Products Marketing Operations Consulting Services Accelerated Tax Systems Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
- 9. Contact Us Charles Davidson Accelerated Tax Systems 2910 Weald Way No. 514 Sacramento, CA 95833 (916) 717-6454 davidson@acceleratedtaxsystems.com www.AcceleratedTaxSystems.com Accelerated Tax Systems Copyright 2013 Accelerated Tax Systems. All Rights Reserved. www.AcceleratedTaxSystems.com
Editor's Notes
- But you don’t need to study accounting or finance in college and you don’t have to have an MBA in order to prepare tax returns. A college degree in any field is not a requirement.Now, I don’t want to give you the idea that a college education isn’t helpful. I believe very strongly in a well-rounded education. It will help you think analytically and communicate clearly. If you’ve taken math classes or business classes, that information will certainly come in handy but don’t let the lack of a college degree stop you from becoming a tax professional.There are currently no federal guidelines for minimum education for tax preparers. That may or may not change in the future. There are currently several initiatives to have federal and state governments more involved in regulating the industry, so this requirement could change in the future. But for now, understand that the IRS does not require you to meet any minimum educational standards.Now that’s not always true for individual states. Some states impose their own requirements on tax preparers. In California, for example, where I teach a majority of my classes, a new tax professional must complete a 60-hour basic tax education course before he or she can prepare tax returns.The course includes basic tax law concepts and instruction on how to complete each of the forms that may be included on an individual tax return.It’s not a lot of education but it’s enough to ensure you have some basic training to do your job. This preliminary training is called qualifying education. Currently the only two states that require qualifying education are California and Oregon. Laws are constantly changing, so be sure to check the individual requirements for your state.
- Even though there aren’t any minimum education requirements you shouldn’t think that you can get by without a basic education in tax law and tax return preparation.Tax law is a very complicated field. Preparing even basic tax returns requires understanding a lot of rules and requirements and the ability to apply that knowledge to your client’s situations. Even the most basic tax returns might require that you report various types of income and deductions, determine who can be claimed as a dependent, and to properly calculate an income tax liability, for example. Professional tax preparers must stay on top of an increasingly complex body of knowledge. One of the reasons tax law is so complicated is that it changes every year. For the last several years, these changes have happened very late in December meaning that there isn’t much time to learn the new laws. There are, of course, classes you can take to get you up to speed on the new changes each year. Most educational programs happen over the summer months but you can find some in the fall and even as late as January.Finally, here’s another tip. Many tax companies will not hire you if you haven’t taken a basic income tax preparation class. This is especially true for companies like H&R Block or Jackson Hewitt. In fact, they would prefer that you take the classes that they offer. For them, it’s a valuable source of off-season revenue.But there are very few companies that will hire you without some basic knowledge and probably a little experience as well. Even if there are no educational requirements for tax preparers in your state, you should consider enrolling in a basic income tax course.
- A good tax preparer also has an ethical obligation to keep up to date with the tax laws. You cannot serve your clients well unless you have an understanding of the tax law that involves their situation. Can you imagine if a client were to ask you whether her meal expenses could be deducted while she was visiting her rental property to complete an inspection? If you don’t know what the rules are regarding meal expense deductions, you will probably give your client bad advice. And if your client relies on that advice and ends up making a bad decision, you’ll quickly get a reputation for someone who doesn’t know what they are doing.It’s your job to know the tax law. It’s your job to be able to answer questions honestly based on your experience and your knowledge. And if you don’t know the answer, you’ll need to know how to research it in order to provide your client with the best information possible. If you’re not willing to do this, you should consider a different industry. The tax preparation business is not for you.
- I mentioned before that some states have regulations that govern the industry. Your state may require you to obtain minimum qualifying education before you can practice. Some states also require continuing education which is simply a minimum number of hours of classes you have to complete each year to continue to be eligible to practice.Again, I’ll give you an example from California. In California, you must complete a 60-hour qualifying education course from an educational provider approved by the California Tax Education Council, or CTEC. After your first year, you must complete 20-hours of continuing education each year to maintain your status as a California Registered Tax Preparer. As long as you continue to complete this education, you can continue to prepare tax return.Other states, and I think Maryland is an example, require you to pass a competency test before you can prepare tax returns in that state. Any time you have to pass a test, it’s a good idea to take a basic tax preparation course to learn the fundamental information on which the test is based.
- Here’s my recommendation for education.I believe very strongly that everyone who wants to become a tax professional should take a basic tax preparation course even if it is not required in your state.Taking a class will set you apart from others in your area who have not taken the time to do this and will provide you with a basic education that is critical for your success.I also recommend that you consider implementing a continuing education program to help you reach your career and business goals. Again, if you state has some requirements, use those for guidelines.Continuing education courses come a variety of flavors. You can take classes in just about any area you find interesting. Do you have clients who own a lot of rental property? Take classes to learn about preparing a Schedule E. Do you want to work with small businesses? Learn about partnerships and S-Corporations. Here’s the key. You can increase your business through specialization if you learn how to use your education as a marketing tool. Once you become an expert in a particular field, you can begin to promote your skills in that area.Don’t get caught in the trap of taking just one or two update courses each year. Instead, create a strategic plan for how you want to grow professionally. Think about where you want to be in a few years and plan your educational strategy to meet your career goals.In California, tax preparers are required to take 20 hours of continuing education each year. But I know many who take 30, 50, or 75 hours each year. They do this for a number of reasons. First, they love learning about new tax law. Second, they want to have the information and knowledge at their fingertips when a client asks a questions. Third, they want to learn new areas of tax law to open up their business and attract new types of clients.These preparers think strategically about their educational plan. Most have some kind of a written plan that gives them a roadmap of where they want to go over the next few years and then they pick educational programs that will help them achieve those goals.