Monday, March 16, 2015

Is a College Degree Needed to Become A Tax Return Preparer?



In a word, no.

If you intend to become a Certified Public Accountant, your state probably has an education requirement that includes the need for a certain number of college credit hours equivalent to a college degree in order to become licensed. If you intend to pursue the path of a CPA, then yes, college is the only way to go for many reasons.

However, it is not necessary to become a Certified Public Accountant to be a successful tax return preparer or tax advisor.

In fact, getting that college degree can cost you years of effort and money that will delay your real education in the field of tax and business and will not give you any significant additional qualifications or capabilities.

Depending on what you want to do in the tax field, a degree may be a complete waste of money and time. Much has been written about the fact that a college degree has become so expensive and jobs have become so scarce and salaries have become so depressed that most people would do better to learn some sort of trade.

Looking back, I would have been much better off financially if I'd skipped college and gotten more relevant training and education. Employers are interested in what you know and what you can do for them, not in your degree, in most cases (there are exceptions where a degree is necessary). Unfortunately, most of your time in college will be spent studying subjects that have little or no impact on your ability to succeed in any type of business.

 What Certification Do You Need?

It is true that you will need some sort of professional certification to hold up to prospective clients. The Enrolled Agent designation is the next best thing to being a Certified Public Accountant. It is highly respected and is recognized by the IRS. By studying for the Enrolled Agent exam, you'll be exposed to a lot more tax law and regulations than you will by studying for the CPA exam. You'll be able to represent clients before the IRS.

Find out more about the difference between a CPA and an Enrolled Agent.

You would also benefit from taking some courses and getting certified in bookkeeping as well as becoming skilled at Quickbooks. I got a pretty good education in "accounting" and financial statement presentation in college, but I knew nothing about basic bookkeeping, which would have been a fatal flaw if I'd tried to open a tax return preparation business straight out of college. You don't need bookkeeping skills to do tax returns for individuals, but if your clients have any sort of business you'll need to understand double-entry bookkeeping and Quickbooks.

Success Without College

To be successful as a tax return preparer you'll need the following:
  • Professional license (Enrolled Agent)
  • Knowledge of double-entry bookkeeping
  • Quickbooks accounting software skills
  • Wide general knowledge of tax law and regulations
  • Extreme in-depth knowledge of your chosen tax niche
  • Ability to seek out new knowledge and stay up-to-date
  • Ability to use the internet and personal contacts to generate business
  • A sense of personal and professional ethics and a strong desire to help other people

Education and Training Without College


So, where are you going to get the necessary training without going to college? The first step, in my opinion, is to be sure you really want to go into the tax return preparation business. Take an H&R Block course and work for them for a season. Don't base your entire decision on that experience, but use it as a decision-making tool.

If you are already sure this is what you want to do, you'll need to take an income tax return preparation course. You could start with H&R Block's course, but here are a couple of others that would offer more and offer distance learning:



Want to test your tax knowledge now? Try this free online quiz.

Bookkeeping knowledge is necessary if you plan to do any tax work for businesses, no matter how small. Here are some places to get started:

I took the Universal Accounting Bookkeeping course a number of years ago and I can tell you that it is very good, but not cheap. It's alot cheaper than college though.

Quickbooks is the leading small business accounting software. You should learn it, but you should understand that the wave of the future is web-based software like Quickbooks Online. Quickbooks does offer a program called Quickbooks Advisor which you should consider if you plan to offer any level of Quickbooks consulting in your practice.

Your Tax Niche

One thing is for sure, you'll enjoy more financial success with less work if you specialize and become the "go-to" person in your niche. Here are just a few ideas for niches:
  • Child Daycare businesses.
  • Real Estate Investors
  • Day Traders
  • Nonprofit organizations (charities)
  • Social Clubs
  • Homeowner's Associations / Condo Associations
  • People who work from home
  • Foreign students and workers (international tax issues)
  • Retired persons
  • Health care professionals
  • Quickbooks Training
  • Business Valuations
  • IRA and Retirement Account specialist
  • Divorce tax issues
  • Bankruptcy tax issues
  • IRS Problem Resolution

College Overrated

Today there are so many free and low-cost learning opportunities, largely because of the internet, that you can become incredibly well educated without ever setting foot in a college. Many college courses are full of propaganda. Certainly they all sell you a pack of lies regarding how much money you will earn when you graduate.

What college promoters will tell you is that they will make you an "educated" person which will help you in all aspects of life. This has generally been true, but if you've ever listened to some of the YouTube interviews on college campuses where interviewers ask basic questions about history and government, or biology and evolution,  to college students you'll quickly realize that many college students are more ignorant than the average "man-on-the-street."

If you want an education beyond your tax and accounting needs there is an overwhelming amount of free resources on the internet that you will enjoy much more than the forced and boring learning environment of a college classroom. There are excellent resources on logic, history, economics, politics, math, science, and writing. Don't forget writing. Developing your writing abilities is one of the best investments you can make. As a new business owner you'll want to learn all you can about writing sales copy for the web. It will pay you back in spades.

If you plan to become a college professor you'll need a Phd. If you want to go into a field like engineering, science, math, or medicine, you'll need that college degree.

But to be a highly successful tax return preparer and tax advisor you should consider avoiding the degree and go for direct training and experience.

Go for it! Take control of your learning experience.

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