A taxpayer is a person or a business subject to pay tax. In simple words, one who pays tax is a taxpayer. Tax paid for an individual is termed as ‘income tax’.
Tax revenue is important for the government to function as a state. An individual who earns above the prescribed limit of the government is entitled to pay tax. This applies to a business as well. If a company/business earns above the prescribed limit of government, a company/business is entitled to pay tax.
Income tax is a percentage of an individual’s income or business’s income paid to the government to run the nation. Tax (individual and business) payers who don’t have any technical expertise seek the help of tax preparers. In this blog, let us discuss the required skills, pros, and cons, different roles, and responsibilities of remote tax preparer jobs.
Tax preparer
A tax preparer is a person who helps taxpayers in the preparation of their returns of income and other income tax-related issues. In some countries, tax preparer profession needs approval from the tax department to help taxpayers to file income tax returns.
A tax preparer’s work doesn’t stop with filing income tax returns; the preparer should also be responsible for advising clients and analysing the data submitted by them. The preparers are required to maintain high confidentiality regarding the details provided by the clients.
A tax preparer should be knowledgeable of tax regulations; this helps in e-filing the income tax returns and also to provide advisory services to the clients regarding investment options to reduce the tax payable amount. The business of the tax preparer doesn’t limit with one or two clients. Providing good service to the clients secure the existing customers and helps to promote the business.
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Did you know? The first know system of taxation was in Ancient Egypt around 3000 – 2800 BC in the First Dynasty of Egypt of the Old Kingdom of Egypt, according to the University of Pennsylvania Almanac.
Remote tax preparer job requirements
Advising and provide future tax planning to clients, filing the income tax returns, adhere to the deadlines, handling communication from tax authorities and clients. The work of a tax preparer job is not a confined one. The preparer undertakes various responsibilities. To be a successful tax preparer, a tax preparer should expertise in a few skills. Those skills are as follows.
1. Tax laws
According to tax laws, it is mandatory to file an ‘income tax returns’ if the income of an individual or business exceeds the basic exemption limit. The basic exemption level depends on the age and income of the individual during that financial year.
Each country has its specific tax laws. To calculate taxable income, one should have a good understanding of the tax law to know how much to pay, what are all the exemptions client could avail, etc. It is not possible to file taxation without the knowledge of tax laws. A person cannot thrive the job of a tax preparer if the person isn’t sound about the taxation laws.
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2. E-filing
Nowadays, IT return preparations are based or carried out online. E-filing or electronic filing is submitting the income tax return online. The traditional way is to file the returns physically in the Income Tax Department’s office. E-filing is the other way used to file the returns via the internet. The application form can be downloaded from the ‘income tax filing website’ of their respective country’s taxation authority. The procedures to file the returns online would be explained in the state’s particular website in a detailed manner.
3. Basic numeracy
People from different segments get into tax, and you don’t need to be an expert in Mathematics. It is just that you need to be comfortable with numbers. , you would be dealing with numbers – income, tax percentage, etc. From computing it till to filing the income tax returns, one would be in constant touch with the numbers.
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4. Commercial awareness
The key role of a tax preparer is to reduce the tax payable for a client. A tax preparer should advise the different avenues where one can invest money and save them fully or partially from paying tax. There are multiple options one could consider for deducting the rate of tax like contributing to the national pension system, health insurance premiums, deduction on interest on home loan & home loan repayment, contributing to charity, senior citizens saving scheme, etc. A tax preparer, on assessing the options that the client could potentially avail, should advise their clients regarding those schemes where one can invest and save money from tax payment.
5. Time management
Time management is crucial in remote tax preparer jobs. Tax preparers help taxpayers in filing the returns of income to the respected government. If the filling exceeds a certain point of time instructed by the government, the taxpayer would be levied some penalty charges. For this, a tax preparer should prioritise tasks. A proper to-do-list helps the tax preparer to follow things efficiently. Prioritising, meeting the deadlines and taking responsibility for a professional workload is essential to become a successful tax preparer.
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6. Multi-tasking
A tax preparer should be good at multi-tasking. In remote tax preparer jobs, one won’t be dealing just with one person or one business. The business model for a tax preparer is to work for multiple clients to earn good money. Apart from that, the tax preparer would be juggling between multiple tasks – from coordinating with different clients, assessing the income and taxable amount of the clients, filing the tax returns, and keeping themselves updated regarding tax exemptions (a day-to-day activity).
7. Organised work plan
Proper planning and remaining highly organised is important for online tax preparer jobs. A tax preparer would be working for many clients and need to adhere to the deadlines to file tax returns. Failure in adhering to a deadline would result in penalty charges. So, a tax preparer should plan out things properly and prioritise them accordingly.
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8. Attention to detail
As a tax preparer, you should be clear and specific on what you do and what you hear. In tax laws, the stated regulation is what it means, and you need to interpret it exactly in that way. Even while receiving the details from the clients, working on it, and while filing the income tax returns, one should specify the details exactly. This means paying attention to every word and number. Failure in attention to details would disrupt the seamless flow of your business.
9. Communication
In tax preparer jobs, a tax preparer is required to explain the complex regulations in a way non-specialists can understand. Also, you won’t be working from an office where people can come, visit you and clear their doubts. Your communication should be clear, crisp and in layman terms, it is your responsibility to ensure that the client has understood the details clearly.
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Tips:
Maintain proper to-do-list. This ensures that you don’t miss out on any particular deadlines.
What are the duties of a tax preparer?
Tax preparers should responsibly advise the clients and file their income tax returns. It is their professional responsibility to ensure the confidentiality of the client’s income details and provide good service to promote the business. The tax preparer should also provide future tax planning suggestions to their clients. The tax preparers should also be knowledgeable about the tax legislation to provide advisory services to their clients. The responsibilities of work from home tax preparer jobs can be classified as primary and secondary duties.
The primary duties of remote tax preparer jobs are as follows
1. Filing income tax returns for clients
Filing the income tax return is the primary duty of tax preparation jobs. This includes collecting and uploading relevant documents such as salary slips, interest certificates, etc. Uploading these documents will help you compute the gross taxable income and will provide the details of TDS (tax-deductible at source) from the income. Downloading forms, computing total income, tax liability, computing the final tax payable money and filing the income tax return after all the taxes are paid is the entire full cycle of filing income tax returns.
2. Client advisory
In tax preparation jobs, your job doesn’t confine with filing taxation. It is the responsibility of the tax preparer to report the clients about the tax-deductible investment sources. The tax preparer should interpret the tax codes and offer solutions. There are a few options where investing money in them would save fully or partially payable tax money. Some of those options are contributing to the national pension system, home loan repayment, health insurance premiums, etc. A tax preparer should inform the clients about these avenues where investing money on them would fetch some income and also help in a tax deduction.
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The following are the secondary duties of remote tax preparer jobs
- A tax preparer handles the communication between the clients and tax authorities.
- Discuss future tax planning with the clients
- For accuracy, a tax preparer should audit the tax forms
- Analyse the submitted tax data by the client to maximise the outcome for the client
- To secure the repeat business and continuously expanding the client base
There are certain rules to qualify as a tax preparer which is based on the place where one lives. Each country has its own set of qualifications to become a tax preparer. However, to qualify as a tax preparer is not a difficult job. The details mentioned above tend to be the tax preparer job description of most of the companies or of her/his own company.
Pros and cons of remote tax preparer jobs
A career in tax preparation is a rewarding one. But it has its advantages and disadvantages. Let us discuss the pros and cons of online tax preparer jobs.
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Pros
1. Freelance
Remote tax preparer jobs are the perfect ones for freelancing. Freelancing to many clients is the only way to increase the profit of the business. As a tax preparer, you can work for any number of clients. There aren’t any particular restrictions unless you don’t feel stressed. An extensive variety of jobs one could do from home and make money online and tax preparer is one of them.
2. A learning process
It is important to be knowledgeable about the tax regulations and legislation. The market is big, and many companies and individuals provide the same service you do. The way you tackle to reduce the tax payable money of the clients is the main factor that helps to grow your business. For this, you need to have good knowledge of tax regulations and tax legislation. The day-to-day changes in taxation law should also be noted, a good one for those who are interested in learning.
3. Work-life balance
This is the advantage of almost all the remote jobs. But the perks of work-life balance in working as a tax preparer is likely more compared to other remote jobs. There would be more work only during the month of filing annual returns. During other months, a tax preparer won’t have much work pressure – just limited to the advisory, advising about the tax preparation process, etc. Hence a tax preparer can spend a good time with families and friends.
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4. Flexibility and no commute
The work of remote tax preparers are highly flexible. Generally, most of the tax preparation offices also are open evenings and weekends. Tax preparation is an ideal one for work from home jobs. Moreover, no commute is involved. All the conversations take place by the phone itself. Only in rare conditions, tax preparers get to meet the clients. That do, clients go to the tax preparers’ place.
Cons
1. Work stability
As this is all about filing income tax returns, the work of the remote tax preparer would flourish only during the tax filing month. Prepare tax planning for clients, updating yourself about the new regulations would mostly be the only work during other months.
2. Competition
There are many tax preparers in each country. Ranging from big four companies (Deloitte, EY, KPMG & PwC) marking its presence all over the world to other small companies and individual tax preparers, the competition is huge in the market.
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3. Time management
As a tax preparer, the primary responsibility is to file income tax returns. The filing should be done within a specific time. A tax preparer should adhere to the deadlines and file the income tax returns. Failing to adhere to the deadline can cost the client dearly. This impacts the successiveness of your business.
4. Routine work
Other than keeping yourself updated about the constant changes in the tax laws, the work of the tax preparer is almost a routine one. If a person only helps in filing income tax returns, the preparers’ work is too simple and unchallenging. If you are a person looking for challenging tasks, easily bored on the same process work, you need to reconsider before entering the field.
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FAQs
1. Who is a tax preparer?
A tax preparer is a person who helps his clients in filing the income tax returns.
2. What are the skills you need to be a tax preparer?
Knowledge in taxation laws, commercial awareness, ease in using a computer for e-filing, basic numeracy, communication, multi-tasking, organisation skills, time management are the skills required for a tax preparer.
3. What are the duties of a tax preparer?
To file income tax returns, provide advisory service, and discuss future tax planning are the major duties of a tax preparer and tends to be the tax preparer job description.
4. What are the advantages and disadvantages of work from home tax preparer jobs?
The advantages of tax preparer jobs are working for many clients, flexible work hours, good work-life balance, no commute, etc. The disadvantages of working as a tax preparer are it is a routine work, the prevalence of competition in the market requires proper management skills, etc.
5. What is a tax preparer salary?
Tax preparer salary differs from country to country. In a developed country like the USA, the average yearly salary of a tax preparer ranges between USD 28,000 to USD 32,000. In a developing country like India, the average yearly ranges between USD 4,000 to USD 6,000.
6. How do you attract tax clients?
Begin with families and friends, joining networking groups, marketing yourself on Instagram, Facebook and other relevant social media, conducting free tax planning seminars, etc. This process would help a tax preparer in attracting more tax clients.
7. What is tax accountant jobs?
The work of both tax preparer jobs and tax accountant jobs is the same, to assist in filing income tax returns. It is that the tax accountant has a different level of qualification and experience than a tax preparer. However, a tax accountant is qualified to provide long term assistance to businesses and individuals.
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