How Hard is it to be a Tax Preparer?
By Tim Frye
There seems to be plenty of confusion when it comes to determining how hard it is to actually do taxes. Turbo tax has made a millions telling people it really is not that hard, and they don’t need any help and they can go it alone. CPAs have made stacks of cash telling you that doing your own taxes is the fastest way to end broke or in the slammer. The truth is somewhere in between. How hard is it really to prepare income taxes? Well, let us find out.
How Good is Your Tax Preparation Program?
When pondering how difficult tax preparation truly is, one must first look at the worker’s tools at hand. In 2013, it is safe to say most tax preparers or taxpayers for that matter are not filing their taxes by hand. Modern day technology allows for the tax preparer to perform a bit of data entry and reach an end result. So the better and more intricate the tax program, the easier it will be to perform a multitude of tax returns without missing a beat. The more complicated tax software will take a while to get used to, but essentially, if you know where to put the numbers, the computer will do the crunching. So when you look at it this way tax preparation is really not that hard, after all-it is just data entry.
Short Form or Long Form
One of the main determinations in the difficulty of filing taxes is whether your client is going with the short form or the long form. The short form is when the taxpayer uses the standard deduction and does not itemize expenses. This tax return can be relatively simple and many times can be finished within minutes.
The long form is a different story. The long form is when the taxpayer itemizes their deductions, because they have enough qualifying expenses on the Schedule A to reach beyond the standard deduction. This is where CPAs earn their big checks. As the situation grows more complicated, the taxpayer grows more confused and in need of professional help. It is very difficult to keep up with the tax code and its constant alterations, so in this light tax preparation can be profoundly difficult. Yes, you can still just do data entry and if you put things in their proper place, though it may take longer than a short form, you should reach an accurate result. The thing is people using the long form tend to want to maximize their deductions, and the computer cannot always tell you what deductions are available to you client. People will spend the money on you if they can be comfortable that you will adroitly navigate them through the maze that is federal taxation. If you don’t have much tax knowledge, you won’t be doing tons of long forms. Gathering tax knowledge is not easy. Wait, it is actually painful and can drive a tax preparer to the brink of insanity. The longer the form, the more difficult the tax preparation process will be.
Dealing with Tax Clients
One of the other components of preparing a tax return that can be difficult is just balancing the acts of relating to the clients while still inputting data and maximizing deductions. It doesn’t sound like too much of a challenge, but ask any tax preparer about a return they fat fingered while talking to client about something not tax related and they may tell you differently. People come to certain tax preparers because they are drawn to them. So regardless of the type of preparer you are, most people are going to want to relate to you, to talk to you while you file their return. So while you are listening to your client gleefully tell you their son is having a son, you still have to somehow factor that information into a tax paradigm. Hmmm. Is the son still a dependent? If so, who is going to claim the grandson? You have to learn to relate to the client with ease, make them comfortable with you as a person. And you also must at the same time concimintingly filter and input information accordingly while putting them at ease with their tax situation. So this can be pretty tough, especially for a newer tax preparer.
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