Top 11 Income Tax Preparer Certifications

Certifications are important for income tax preparers in the job market because they demonstrate a high level of competency and expertise. A certification provides employers with assurance that a potential employee is knowledgeable and qualified to do the job. Certifications also help to differentiate a potential employee from other applicants without certifications and allow employers to easily identify those who have met certain standards of knowledge and experience. Furthermore, obtaining certifications can open up opportunities for career advancement, as it shows employers that an individual is committed to learning new skills and staying current on changes in the field.

The purpose of this article is to review some of the best certifications for Income Tax Preparers and explain how they can help advance a tax preparer's career.

What are Income Tax Preparer Certifications?

Income tax preparer certification is a program designed to provide tax professionals with the knowledge and skills necessary to accurately and confidently prepare tax returns for individuals, businesses, and other entities. This certification can be obtained through several organizations, such as the IRS, H&R Block, or the National Association of Tax Professionals (NATP).

By obtaining this certification, income tax preparers gain a higher level of expertise and professionalism in their field. Certification programs often include classes on topics such as taxation law and regulations, filing procedures, and customer service. Additionally, many programs require participants to pass an exam in order to demonstrate their competence in preparing taxes.

Having a certification can give clients added confidence that their taxes are being prepared correctly by an experienced professional. It also provides employers with assurance that their employees have the necessary skills to handle complex tax situations. Certified income tax preparers may also be able to charge more for their services due to the extra knowledge they possess.

Income tax preparer certification is an important credential for anyone looking to work in the field of taxation or become self-employed as a professional tax preparer. It provides peace of mind for both clients and employers by ensuring that those handling their finances are knowledgeable and qualified individuals who adhere to industry standards.

Pro Tip: If you are a tax preparer considering certification, make sure to check the requirements for your state. Each state has different regulations and licensing requirements for tax preparers, so it is important to research the laws and regulations in your area before beginning the certification process.

Related: What does an Income Tax Preparer do?

Top 11 Income Tax Preparer Certifications

Here’s our list of the best certifications available to Income Tax Preparers today.

1. Certified Public Accountant (CPA)

Certified Public Accountant (CPA) is a professional designation that is awarded to individuals who have met certain educational, experience, and examination requirements set by the state boards of accountancy. CPAs are licensed by their respective states to provide accounting services to the public.

To become a CPA, an individual must first meet the educational requirements in their state. Generally, this requires completing 150 semester hours of college education with a concentration in accounting and business-related courses. Additionally, most states require that candidates have at least one year of public accounting experience before they can sit for the CPA exam.

The CPA exam is administered by the American Institute of Certified Public Accountants (AICPA). The exam consists of four sections: Auditing & Attestation (AUD), Business Environment & Concepts (BEC), Financial Accounting & Reporting (FAR), and Regulation (REG). Each section has its own fee and must be passed within 18 months for an individual to obtain their CPA license.

The cost of becoming a CPA varies from state to state but generally includes fees for educational courses, registration fees for the exam, and licensing fees. Additionally, there may be other costs associated with studying for and taking the exam such as study materials or review classes. In total, it can cost anywhere from $1,000-$3,000 or more depending on the state and individual circumstances.

2. Enrolled Agent (EA)

Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. Enrolled Agents are required to demonstrate to the IRS their competence in matters of taxation before they may represent a taxpayer before the IRS.

It typically takes about three months to become an Enrolled Agent after passing the Special Enrollment Exam (SEE). To get started, you must first apply for enrollment with the IRS. After your application is approved, you must then pass a three-part exam administered by Prometric that covers individual and business tax returns. Once you have passed this exam, you will be granted an Enrolled Agent status and can begin representing clients before the IRS.

The cost associated with becoming an Enrolled Agent varies depending on how much preparation and review materials you need in order to pass the exam. The exam itself costs $190 per part, or $570 total for all three parts. Additionally, there are various study materials available that range from free online resources to paid courses which can cost anywhere from $100-$500 or more depending on what type of course or material you choose.

3. Accredited Tax Preparer (ATP)

Accredited Tax Preparer (ATP) is a professional designation awarded by the National Association of Tax Professionals (NATP). It is designed to recognize tax professionals who have achieved a high level of knowledge and expertise in the field of taxation. To become an ATP, you must meet certain educational requirements and pass an exam administered by NATP.

The educational requirements for becoming an ATP include completing at least 15 hours of continuing education in taxation and ethics, as well as passing a comprehensive three-hour examination. The exam covers topics such as federal tax law, individual and business taxes, filing procedures, accounting principles, and tax preparation software.

The process to become an ATP typically takes about six months. You must first complete the required coursework or training program before taking the exam. After successfully passing the exam, you will be issued your Accredited Tax Preparer certificate from NATP.

The cost to become an ATP varies depending on which training program or courses you choose to take. Generally speaking, it can cost anywhere from $500-$1,000 to become certified.

4. Certified Tax Resolution Specialist (CTRS)

A Certified Tax Resolution Specialist (CTRS) is a professional who specializes in helping taxpayers resolve their tax debt issues. CTRSs are trained to provide the highest level of service and expertise in resolving tax problems. They understand the complexities of the IRS and state taxation systems and are knowledgeable in areas such as installment agreements, offers-in-compromise, penalty abatement, audit representation, and other related services.

It typically takes about 6 months to become a CTRS. To become certified, individuals must complete an approved course of study that covers topics such as federal and state taxation laws, IRS regulations, negotiation techniques, dispute resolution strategies, ethics, and more. After completing the coursework, applicants must pass a comprehensive exam administered by the National Association of Tax Professionals (NATP).

The cost for becoming a CTRS varies depending on where you take your training courses. Generally speaking though, it can range from $500-$2,000 for the required coursework and exam fees.

Once certified as a CTRS, individuals must meet certain continuing education requirements each year to maintain their certification status. This ensures that they stay up-to-date with changes in tax laws and regulations so they can continue providing quality service to their clients.

5. Certified Tax Coach (CTC)

Certified Tax Coach (CTC) is a professional designation that is awarded by the National Association of Tax Professionals (NATP). It is designed to recognize tax professionals who have achieved a high level of knowledge and expertise in the field of taxation. The CTC designation demonstrates that the holder has a comprehensive understanding of tax law, regulations, and practices.

It takes approximately one year to complete the CTC program. To get started, you must first become an active member of NATP and then complete the CTC program requirements. This includes completing three courses: Fundamentals of Taxation, Advanced Taxation Issues, and Professional Ethics for Tax Professionals. You will also need to pass an exam with a score of at least 80%.

The cost for becoming a Certified Tax Coach varies depending on your membership status with NATP. For non-members, it can range from $1,000-$2,500. Members receive discounted rates ranging from $400-$1,000. In addition to these fees, you may also be responsible for any additional costs associated with taking the required courses or exams.

Once you have completed all requirements and passed the exam, you will receive your CTC certification and can use it to demonstrate your expertise in taxation to employers or clients.

6. Registered Tax Return Preparer (RTRP)

Registered Tax Return Preparer (RTRP) is a designation issued by the Internal Revenue Service (IRS) to individuals who have completed a competency exam and background check. The purpose of the RTRP program is to ensure that tax return preparers are qualified to accurately complete tax returns for their clients.

To become an RTRP, individuals must pass the Registered Tax Return Preparer Test. This test covers topics such as federal tax law, ethics and professional conduct, and filing requirements. The test consists of 60 multiple-choice questions and takes approximately two hours to complete. It costs $116 to take the test.

Once an individual has passed the RTRP exam, they must submit an application for registration with the IRS. This application includes a background check which includes fingerprinting and verification of identity. The application process typically takes 6-8 weeks to complete.

After all requirements are met, individuals will receive their official RTRP certificate from the IRS. This certificate will be valid for three years before needing to be renewed with additional continuing education credits or retaking the competency exam again.

Overall, it can take up to 10 weeks or longer for an individual to become an RTRP once they have taken the competency exam, submitted their application, and received their certificate from the IRS. The total cost of becoming an RTRP is $116 for taking the competency exam plus any additional fees associated with submitting your application and completing your background check (if applicable).

7. National Association of Tax Professionals (NATP)

The National Association of Tax Professionals (NATP) is a professional association that provides education, training, and resources to tax professionals. It was established in 1979 and has over 19,000 members from the United States, Canada, and other countries.

It takes approximately 4-6 weeks to get NATP certification after submitting an application and passing the qualifying exam. To qualify for NATP certification, applicants must have a minimum of two years of experience as a tax preparer or related field. Applicants must also complete an approved continuing education program and pass the NATP examination.

The cost to become certified with NATP varies depending on the level of certification you are seeking. The basic membership fee is $99 per year plus any applicable state fees. Additional fees may apply if you are seeking additional certifications such as Enrolled Agent or Certified Public Accountant (CPA).

To become certified with NATP, applicants should visit their website at www.natptax.com to register for an account and review the requirements for certification. Once registered, applicants should follow the instructions provided on the website to complete their application and submit payment for any applicable fees.

8. National Association of Enrolled Agents (NAEA)

The National Association of Enrolled Agents (NAEA) is a professional organization that provides certification and education to individuals who are enrolled to practice before the Internal Revenue Service (IRS). Enrolled agents are federally-authorized tax practitioners who have unlimited rights to represent taxpayers before the IRS.

To become an enrolled agent, you must pass a three-part examination administered by the IRS. The exam covers individual and business tax returns, ethics and representation rights. It typically takes 6-12 months to complete the exam process.

You can obtain study materials for the exam from a variety of sources, including self-study courses, online programs, or in-person classes. After passing all three parts of the exam, you will be eligible to join NAEA as an enrolled agent.

Membership in NAEA is not mandatory but it does provide additional benefits such as access to continuing education courses and networking opportunities with other enrolled agents. The cost of joining NAEA varies depending on your membership level; however, annual dues start at $125 for basic membership.

9. American Institute of Professional Bookkeepers (AIPB)

The American Institute of Professional Bookkeepers (AIPB) is a professional organization that provides certification to bookkeepers. The AIPB certification is the most widely recognized and respected credential for bookkeepers in the United States. It is designed to demonstrate a bookkeeper’s knowledge and proficiency in accounting principles, financial record-keeping, payroll processing, and other related topics.

To become certified by the AIPB, you must pass an exam that covers a variety of topics such as accounting principles, financial statement preparation, payroll processing, taxation issues, and more. The exam takes approximately four hours to complete and consists of multiple-choice questions.

In order to take the AIPB certification exam, you must first complete an application form available on their website or from your local library. Once your application has been approved, you will be sent a registration package with instructions on how to register for the exam. After registering for the exam, you will receive further instructions on how to prepare for it.

The cost of taking the AIPB certification exam varies depending on where you are located in the United States but typically ranges from $200-$400 USD. This fee includes both the cost of taking the exam and any additional materials needed for studying or preparing for it.

Once you have passed the AIPB certification exam, you will receive a certificate that is valid for five years before needing to be renewed. To maintain your certification status during this time period, you must complete continuing education courses offered by AIPB or other approved organizations every two years.

10. Internal Revenue Service Annual Filing Season Program

The Internal Revenue Service Annual Filing Season Program (AFSP) is an IRS program that provides recognition to tax return preparers who demonstrate their competency and commitment to the tax system by completing continuing education courses. The AFSP is voluntary and open to all tax return preparers who are not attorneys, certified public accountants, or enrolled agents.

The program consists of two parts: a Record of Completion and a Certificate of Completion. To receive the Record of Completion, tax return preparers must complete 18 hours of continuing education courses related to federal taxation and ethics. To receive the Certificate of Completion, they must also pass a competency test administered by the IRS.

It typically takes between three and six months to complete the AFSP requirements. Tax return preparers can begin the process by registering for an IRS e-file Account Identification Number (EFIN). Once registered, they will be able to access the course materials needed to fulfill the requirements for both parts of the program.

The cost of participating in the AFSP depends on how many courses are taken and which course provider is used. Generally speaking, it costs around $100-$200 per year for most individuals who are taking all 18 hours of required courses.

11. Chartered Tax Professional (CTP)

Chartered Tax Professional (CTP) is a certification offered by the National Association of Tax Professionals (NATP). The CTP designation is the highest level of recognition available to tax professionals, and it demonstrates a commitment to excellence in tax preparation and compliance.

To qualify for the CTP designation, applicants must meet certain educational and experience requirements. These include having a bachelor’s degree or equivalent education in accounting or taxation, completing at least two years of professional tax experience, passing an exam administered by NATP, and completing continuing education courses every three years.

The CTP exam consists of multiple-choice questions covering topics such as individual income taxes, corporate taxes, partnership taxes, estate and trust taxes, international taxation, ethics and professional responsibility. The exam takes about four hours to complete and costs $325.

Once applicants have passed the exam and met all other requirements for the CTP designation, they will receive their certificate from NATP. This certificate serves as proof that they have achieved the highest level of recognition available to tax professionals.

The cost of obtaining the CTP designation varies depending on factors such as whether you are already a member of NATP or if you need to take additional courses to meet the educational requirements. Generally speaking, however, it typically costs around $500-$1,000 in fees for application materials and exams.

Do You Really Need a Income Tax Preparer Certificate?

No, you do not need an income tax preparer certificate in order to prepare taxes for clients. However, it can be beneficial for a few reasons. First of all, having a certificate shows potential clients that you are knowledgeable and qualified to handle their taxes. It also provides assurance to them that your work is up to professional standards and that you understand the complexities of the tax code. Additionally, having a certificate may open up more business opportunities for you as potential clients may prefer someone with a certificate over someone without one.

That said, there are many ways to become knowledgeable about preparing taxes without obtaining an income tax preparer certificate. You can take online classes or courses related to tax preparation and become familiar with the laws and regulations governing taxes. You can also read books on the subject or attend seminars and conferences related to taxation. In addition, becoming certified by the IRS is another way to demonstrate your knowledge of tax preparation and gain credibility in the industry.

Ultimately, whether or not you choose to obtain an income tax preparer certificate is up to you. It may help boost your business prospects, but it is certainly not required in order to become proficient in preparing taxes for others.

Related: Income Tax Preparer Resume Examples

FAQs About Income Tax Preparer Certifications

1. What is an income tax preparer certification?

Answer: An income tax preparer certification is a credential that demonstrates a person has the knowledge and skills to prepare taxes for individuals and businesses.

2. How do I get an income tax preparer certification?

Answer: To get an income tax preparer certification you need to complete a certified program, such as one offered by the Internal Revenue Service (IRS) or a professional organization like the National Association of Tax Professionals (NATP).

3. What are the requirements for an income tax preparer certification?

Answer: Requirements vary by program, but generally include passing a competency exam and completing continuing education credits each year.

4. Are there different levels of income tax preparer certifications?

Answer: Yes, there are different levels of certifications depending on the complexity of taxes you want to be able to handle. The most advanced level is Enrolled Agent (EA), which is recognized by the IRS and allows you to represent clients in audits, collections and appeals with the IRS.

5. Is an income tax preparer certification required by law?

Answer: No, but most states have laws that govern who can provide certain services related to filing taxes; in some cases, this may require a specific type of certification or license. Check with your state's department of revenue for more information about its specific requirements.