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Tax Facts: What is a Tax Preparer?

What is a tax preparer?

This question is something you want to ask whether you’re an employee or a business owner. After all, it’s best not to commit various tax crimes, even when you’re unaware. 

In this guide, we will discuss everything to know about tax preparers. Read on and learn about tax preparer duties today:


What Is a Tax Preparer?

A tax prepare is a professional in charge of preparing, calculating, and filing income tax returns. They do it on behalf of both businesses and employees.

Various types of preparers exist, depending on their credentials. Third-party organizations issue licenses on some while others have none. Learning these types allows you to get the most out of your tax outcomes.

What Does a Tax Preparer Do?

Tax preparers aim to complete and file tax forms for various clients. They understand tax law, allowing them to review your information. It includes the following:

  • Social Security numbers
  • Income statements
  • Personal and business expenses

These pieces of information let preparers determine the expenses and situations resulting in tax credits or deductions. They can also offer advice based on their tax return calculations. It ensures your tax liability next year is lower.

Tax Preparer Credentials

As mentioned above, tax preparers vary between credentialed and non-credentialed. This section will discuss their differences.

Credentialed Tax Preparers

Most tax preparers have credentials to work all year. They focus on both accounting and tax-related processes. These professionals include:

  • Certified Public Accountants (CPAs)
  • Tax Attorneys
  • Enrolled Agents (EAs)

These preparers receive their credentials from either a state board or the Internal Revenue Service (IRS). It is more common for EAs to get their certification from the latter. As for CPAs, they can take Universal Accounting’s tax preparation course.

Non-Credentialed Tax Preparers

These are individuals with no certifications from the above-mentioned organizations. Instead of meeting various requirements, most non-credentialed tax preparers self-study. Some receive training from tax preparation stores.

Non-credentialed tax preparers include:

  • Seasonal tax store employees
  • Volunteer Income Tax Assistance
  • Annual Filing Season Program participants

Tax preparers working with various businesses and organizations need not carry credentials in most cases. After all, they only give tax preparation assistance for a few months every year, during tax season.

Benefits of a Tax Preparer

Now you know about tax preparer responsibilities, it’s time to learn how they benefit your business. Their primary advantage is getting a risk-covered consultancy. They prevent legal consequences by giving audit assistance.

At the same time, your business can focus more on building business strategies. It means exploring more options to gain profits and opportunities. With a tax preparer, you can avoid the stress of dealing with taxes every year.

Hire a Tax Preparer Now

We hope our guide answered your question, “what is a tax preparer?” Use these facts to determine whether they are worth your investment.

However, learning what these professionals do is only the beginning. Look for desirable qualities to get the best one around.

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