Career in tax preparation?

Question

I'm ready to jump from engineering (boring) into a full time career in tax preparation. I just love taxes to the core of my very being (don't bother telling me how weird I am, I know already).

There are many options and I want to hear from career tax people which they feel is the best and why? I want pros and cons. I'm also interested in potential annual salaries.

1) Full time job with a large firm like H&R Block, but not as a manager or any other job where you don't do many actual returns.

2) Tax firm franchise owner...should I purchase an existing office or start a new one.

3) Hang out a shingle and start my own office or partner with someone else who has done this, learn from them, then buy them out.

I have enough cash to weather a few years of low income, but I am not interested in an extended dry spell. Also, do I need a CPA degree or just an EA?

What do you do in the summer months to stay busy?

Thank you all for your time.

Answer 1

There's no single answer to your question, TaxMan. It largely depends on what YOU want to do. Do you want to prepare lots of tax returns for people with a wide variety of financial situations? Then working at a franchise might be good exposure. Do you want to prepare lots of complicated returns? Then working in a firm that specializes in more complicated tax issues would be a good idea.

Either way, I do recommend you start with a firm before starting your own practice. You'll gain valuable experience working with clients, researching a variety of tax issues, and get used to the ebb and flow of the tax season.

Whether you need a CPA or EA license is up to you. CPAs handle more complex issues and not just tax. CPAs can handle audits and all sorts of accounting issues. Getting an EA is a great first step, and you can always take the CPA test later if you need to.

As for what I do in summer months? Let's just put it this way, it is now November and I have more work to do now than I had back in July. How do I stay so busy? Well that's a secret I'm not sharing. But there are specializations in the tax industry that aren't as seasonal. Most independent firms will have several specialities that will help even out the seasonal workload.

Hope this helps.

William Perez
taxes.about.com

Answer 2

I see you are already preparing taxes part time, and you are really serious about this. So go and get yourself certified or become an Enrolled Agent. You will, at a very minimum, need an Associates Degree in Accounting before you can sit for most exams (although maybe not for the EA exam). This may not take too long to accomplish if you already have a degree in engineering. Also, check out the N.S.A.'s website for the A.C.A.T. test requirements, which may be the quickest way to become an Accredited Tax Preparer. As Congress is going to mandate licensing for tax preparers, you will need to acquire credentials. But if you're that crazy about income taxes, maybe you should go for a career in accounting. Public accounting can be a very rewarding (year round!) career...as long as you don't take on more work than you can handle. Whatever you decide, good luck!