Top 10 Tax Preparer Certifications

Certifications are important for tax preparers in the job market because they demonstrate a level of knowledge and expertise that potential employers look for. They show that the individual has taken the time to learn and understand the complexities of tax law, as well as gaining proficiency in tax preparation software. Having a certification also indicates to employers that the preparer is committed to staying up-to-date on changes in tax regulations and laws. A certification also provides assurance to clients that their taxes will be prepared correctly, which can lead to more business for a tax preparer.

This article reviews some of the top certifications for Tax Preparers and explains how they can help to enhance a tax preparer's career.

What are Tax Preparer Certifications?

Tax preparer certification is a credential offered by the Internal Revenue Service (IRS) that demonstrates to the public and employers that a tax preparer has the knowledge and qualifications to accurately prepare taxes. The certification process requires tax preparers to complete a minimum of 18 hours of continuing education courses, pass an IRS-approved competency examination, and adhere to professional standards for tax preparation.

The certification helps to ensure that taxpayers receive quality service from qualified professionals who are up-to-date on all applicable laws and regulations. It also provides assurance to employers that their employees have the necessary skills and qualifications to provide accurate services. Furthermore, having a certified tax preparer can help save time when filing taxes as they have a better understanding of the laws and processes involved with filing returns. In addition, those with certification may be eligible for discounts on software or services related to filing taxes, which could potentially save money in the long run. Finally, obtaining certification can open up new job opportunities in areas such as bookkeeping or consulting.

Pro Tip: When selecting a tax preparer, make sure to check for certification from the IRS. Certified tax preparers have passed a testing and continuing education program that ensures they are up-to-date with the latest tax laws and regulations. This will help ensure that you receive accurate advice and the best possible return.

Related: What does a Tax Preparer do?

Top 10 Tax Preparer Certifications

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

1. Certified Public Accountant (CPA)

A Certified Public Accountant (CPA) is a professional designation that is earned by individuals who have met certain educational, experience and examination requirements set forth by the state in which they are licensed. CPAs are responsible for providing a wide range of accounting services including auditing, tax preparation, financial planning and consulting.

In order to become a CPA, an individual must meet the education, experience and examination requirements set forth by the state in which they plan to be licensed. Generally speaking, these requirements include completing 150 semester hours of college coursework in accounting and related subjects; passing the Uniform CPA Exam; obtaining at least one year of supervised experience in public accounting; and meeting all other applicable licensing requirements. Depending on the state, additional educational or work experience may be required as well.

The amount of time it takes to become a CPA varies from person to person depending on their current academic background and work experience. For those who already have an undergraduate degree in accounting or related field, it can take anywhere from six months to two years to complete the remaining requirements for licensure. For those without any prior college credits or work experience in accounting, it can take up to four years or more to become a CPA.

The cost of becoming a CPA also varies from state-to-state but generally includes fees for application materials, exam registration fees and review courses if necessary. In addition, many states require CPAs to complete continuing education courses each year in order to maintain their license which can add additional costs as well.

2. Enrolled Agent (EA)

Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and is empowered by the U.S. Department of Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. Enrolled Agents are the only federally-authorized tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS.

To become an Enrolled Agent, applicants must pass a three-part exam administered by the IRS or demonstrate equivalent experience through prior employment with the IRS. The exam tests knowledge on individual and business taxes as well as ethics. It typically takes 3-6 months to complete all three parts of the exam, depending on how quickly you can study and prepare for each part.

The cost for taking the EA Exam varies based on where you take it and other factors such as whether you need to purchase study materials or use a review course provider. Generally speaking, you can expect to pay around $1,000 - $2,000 for everything including registration fees, study materials, review courses, etc.

3. Accredited Tax Preparer (ATP)

Accredited Tax Preparer (ATP) is a professional designation awarded to individuals who have demonstrated knowledge and proficiency in the field of tax preparation. The ATP designation is offered by the National Association of Tax Professionals (NATP).

To become an ATP, individuals must complete a comprehensive course of study in taxation and pass an exam administered by NATP. The course typically takes approximately 80 hours to complete and covers topics such as individual income tax preparation, business taxes, estate and trust taxes, payroll taxes, and ethics.

Individuals interested in becoming an ATP can take the course online or in person at select locations. The cost for the course varies depending on the provider but generally ranges from $500-$800. After completing the course and passing the exam, individuals will receive their ATP certification within 4-6 weeks.

4. Certified Financial Planner (CFP)

Certified Financial Planner (CFP) is a professional certification for financial planners. It is recognized worldwide as the standard of excellence for financial planning professionals. The CFP designation signifies that an individual has met rigorous education, examination, experience and ethical requirements set by the Certified Financial Planner Board of Standards.

To become a CFP, individuals must complete a CFP Board-approved educational program and pass the CFP Certification Examination. The educational program must include coursework in areas such as insurance planning, tax planning, retirement planning, investments and estate planning. Once these requirements are met, individuals may apply to take the CFP Certification Examination.

The CFP Certification Examination is administered over two days and consists of two three-hour sessions of multiple choice questions. The exam covers topics such as general principles of financial planning; insurance planning; employee benefits; investment planning; income tax planning; retirement savings and income plans; estate planning; and professional conduct and regulation.

The cost to take the CFP Certification Examination varies depending on when you register for it. Generally speaking, it costs between $800-$1,000 to take the exam. Additionally, there are other fees associated with becoming a CFP such as application fees and annual renewal fees which range from $50-$300 depending on your circumstances.

5. Chartered Tax Professional (CTP)

A Chartered Tax Professional (CTP) is a professional designation given by the National Association of Tax Professionals (NATP). It is designed to recognize individuals who have achieved a high level of expertise in taxation. The CTP credential is highly respected and recognized in the tax industry, and it demonstrates that an individual has the knowledge and experience necessary to provide quality tax services.

It typically takes between two and four years to obtain the CTP credential. To become a CTP, you must complete a minimum of 80 hours of continuing education in taxation-related topics, pass an exam administered by NATP, and meet other requirements outlined by NATP.

The cost for obtaining the CTP credential varies depending on your location and whether or not you are already an NATP member. Generally speaking, it costs between $250-$750 for non-members to obtain the CTP credential. If you are already an NATP member, then the cost is usually lower.

To get started on your path towards becoming a CTP, visit the NATP website for more information about their requirements and fees associated with obtaining this credential.

6. Registered Tax Return Preparer (RTRP)

Registered Tax Return Preparer (RTRP) is a designation given by the Internal Revenue Service (IRS) to individuals who have passed a competency test and have met certain educational requirements. The RTRP designation allows tax preparers to represent taxpayers before the IRS in audits, collection matters, and appeals.

To qualify for the RTRP designation, applicants must pass an IRS-administered competency test and complete 15 hours of continuing education annually. The competency test covers topics such as individual and business tax returns, ethics, recordkeeping, and other related topics.

The process of becoming an RTRP takes approximately two weeks from the time you submit your application until you receive your certification. To get started, you must first register with the IRS as a tax return preparer. You can do this by completing Form 23 Application for Preparer Tax Identification Number (PTIN). Once you have obtained your PTIN number, you can then register for the RTRP exam on the IRS website.

The cost of taking the RTRP exam is $116 plus any applicable taxes or fees. This fee includes both the cost of taking the exam and any associated materials needed to study for it. Additionally, there may be additional costs associated with obtaining continuing education credits each year to maintain your RTRP status.

7. National Association of Tax Professionals (NATP)

The National Association of Tax Professionals (NATP) is a professional organization that provides education and resources to tax professionals. The organization was founded in 1979 and has over 20,000 members worldwide. NATP offers a variety of services for tax professionals including continuing education, conferences, publications, online tools, and more.

In order to become a member of the NATP, individuals must meet certain qualifications. These include having at least two years of experience in the field of taxation or having completed an approved educational program in taxation. Additionally, applicants must pass an exam administered by the NATP to demonstrate their knowledge and understanding of taxation laws and regulations.

To get started with becoming an NATP member, individuals should contact the organization directly for more information and to sign up for the membership application process. This process typically takes about 4-6 weeks to complete depending on the individual's qualifications and availability.

The cost of joining NATP varies based on the type of membership chosen (e.g., student vs professional). Generally speaking, professional memberships range from $99 - $299 per year depending on which services are included in the membership package. Student memberships are generally discounted rates ranging from $25 - $50 per year.

8. Accredited Tax Advisor (ATA)

Accredited Tax Advisor (ATA) is a professional designation awarded by the National Association of Tax Professionals (NATP). The ATA credential recognizes individuals who have demonstrated expertise in tax preparation and compliance.

The ATA designation requires passing an exam that covers topics such as individual and business taxation, ethics, and tax law. To be eligible to take the exam, applicants must meet certain requirements such as having at least two years of experience in tax preparation or related fields, or completing a NATP-approved course.

It typically takes between six months to one year to complete the requirements for the ATA designation. The cost of obtaining the ATA designation varies depending on what courses or materials you choose to use for your studies. Generally speaking, you can expect to pay anywhere from $500-$1,000 for tuition and materials.

9. Certified Tax Coach (CTC)

Certified Tax Coach (CTC) is a professional certification program that provides tax professionals with the knowledge and skills necessary to provide comprehensive tax planning and preparation services. The CTC program consists of four courses, which can be completed online or in-person. It typically takes about six months to complete the entire program.

The first course covers the basics of tax law, including income tax, deductions, credits, and other topics. The second course focuses on more advanced topics such as estate planning, trusts, and business taxes. The third course covers advanced topics such as international taxation and financial planning. Finally, the fourth course covers ethics and compliance issues related to tax practice.

To become a Certified Tax Coach (CTC), you must pass all four courses with a score of 70% or higher. You must also have at least two years of experience in the field of taxation or related fields such as accounting or finance. Additionally, you must submit an application for certification along with a fee of $495 USD. Once your application is approved, you will receive your CTC designation from the National Association of Tax Professionals (NATP).

The Certified Tax Coach (CTC) designation is an important credential for any professional who wants to provide comprehensive tax services to their clients. With this designation, you will be able to demonstrate your expertise in taxation and help clients make informed decisions about their taxes.

10. National Association of Enrolled Agents (NAEA)

The National Association of Enrolled Agents (NAEA) is a professional association for tax professionals who are federally licensed to represent taxpayers before the Internal Revenue Service (IRS). Enrolled agents are the only federally-licensed tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS.

Enrolled agents must pass a three-part, comprehensive examination administered by the IRS and maintain their expertise through continuing education courses. The NAEA provides resources, support, and advocacy for enrolled agents. It also offers members access to educational programs and conferences, networking opportunities, and other benefits.

It typically takes two years to become an enrolled agent after passing the exam. To get started, applicants must complete an application with the IRS Office of Professional Responsibility (OPR) and pay a fee of $30. Applicants then need to pass a three-part exam that covers individual taxes, business taxes, and representation issues. After passing the exam, applicants must submit fingerprints for background checks with the OPR before they can be granted enrolled agent status.

In addition to the application fee of $30, there is also an exam fee of $109 per part or $327 total for all three parts. There may also be additional fees associated with fingerprinting services or other requirements depending on state regulations.

Do You Really Need a Tax Preparer Certificate?

The short answer is no, you do not need a tax preparer certificate to work as a tax preparer. However, depending on the type of work you plan to do and the state in which you plan to practice, it may be beneficial to obtain one.

In many states, there are no specific licensing requirements for tax preparers. However, some states require that tax preparers obtain a license or certification in order to practice. This is usually done through a state-approved program or course. Depending on the state in which you plan to practice and the type of work you plan to do, these courses may be required by law.

In addition, becoming certified can help demonstrate your knowledge and professionalism in the field of tax preparation. It can also provide potential employers with evidence that you are knowledgeable about taxes and can accurately complete returns for clients. It can also give clients peace of mind knowing that their taxes are being handled by someone who is qualified and experienced in the field of taxation.

Overall, obtaining a tax preparer certificate is not necessary but could be beneficial depending on your situation. If you decide to pursue certification, make sure to research what requirements may be necessary for the state in which you plan to practice and find an appropriate program or course that meets those requirements.

Related: Tax Preparer Resume Examples

FAQs About Tax Preparer Certifications

1. What is a Tax Preparer Certification?

Answer: A Tax Preparer Certification is a professional certification that demonstrates an individual’s knowledge and expertise in tax preparation. It is earned by completing a series of courses, passing exams, and meeting other requirements.

2. Who needs to obtain a Tax Preparer Certification?

Answer: Anyone who prepares or assists in preparing federal tax returns professionally must obtain a valid Tax Preparer Certification from the IRS. This includes CPAs, EAs, attorneys, and other qualified professionals.

3. How long does it take to get a Tax Preparer Certification?

Answer: The amount of time it takes to obtain a Tax Preparer Certification depends on the type of certification you are seeking and your prior experience with taxes. Generally, it can take anywhere from 6 months to 2 years to complete all the necessary steps for certification.

4. How much does it cost to get a Tax Preparer Certification?

Answer: Costs for obtaining a Tax Preparer Certification vary depending on the type of certification you seek and the specific courses or training you take. Generally, expect to pay anywhere from $500 - $2,000 for required coursework or training materials that may be needed in order to become certified.

5. What types of certifications are available for tax preparers?

Answer: There are several different types of certifications available for tax preparers including Enrolled Agent (EA), Certified Public Accountant (CPA), Chartered Financial Consultant (ChFC), Accredited Tax Advisor (ATA) and Accredited Business Accountant/Advisor (ABA/ABA). Each one requires different levels of training and education as well as passing an exam in order to earn the designation.