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My Experience as a Tax Preparer

Updated on March 16, 2012

I have taken on a variety of jobs since I left The Corporation, and one of them was being a tax preparer for one tax season. I won't mention the name of the company, because I don't think it is relevant to the story. It is not the one in the picture. Although I am sure all of these tax preparation services are different from each other, I have a strong feeling that they have many similarities.

I had always done my own taxes, so I did not have any prior experience with tax preparation services, but I thought it would be a good way to help people, learn some things that may help me with my own taxes, and potentially get a job that would last me until my preferred job became available.

I had talked with someone who had been a tax preparer, and she had stated that it was a reasonable job. There was an hourly rate of pay, and you could get a profit sharing bonus at the end of the year. She was not happy with unethical practices, since she felt that many people were cheating on their taxes.

There are many tax preparation services which open up during the tax season to prepare tax returns and provide tax anticipation loans.
There are many tax preparation services which open up during the tax season to prepare tax returns and provide tax anticipation loans. | Source

Training as a Tax Preparer

I read an ad that said that I could go to tax school to learn to become a tax preparer. There was a possibility that if I did well, they would hire me to work for them. There was some kind of discount on these classes. Unfortunately, it was coming close to tax season, and I really wanted the job. I paid for the tax classes. I knew that I could get free classes, but I didn't know how to go about getting the free ones. They did say that if I was hired, I would be required to take the class every year, and would not have to pay for future classes.

There were several weeks of classes, and the training was very helpful in learning how to do taxes. I have done my own taxes all my life, and have helped others with theirs, but there was still a lot of information to learn all at once about different tax situations. You were allowed to use your resources to do the quizzes, and I was proud to be able to do well on all of them. Most of my classmates were struggling, even though it was an open book test. Some of them missed some classes, and although they could attend another class to make up for the one they missed, I am pretty sure they did not do that.

Because they call it tax school, they get away with not paying you for attending the training you need to do the job.

Getting Hired as a Tax Preparer

In order to become a tax preparer, you need to pass an open book test. It was difficult to find all the information from different parts of the book, and put together different tax concepts, but I managed to pass the test. You could take it twice more if you did not pass. I saw that many people were receiving specific assistance that I would call cheating. They wanted to help as many people pass as possible.

We didn't get a lot of training on how to use the tax software, which was the main part of the job. There was some additional paid training about office practices.

Since the office had been closed for most of the year, we had to clean up the office and get it ready for the tax season. We got the supplies we needed, but the manager was very hesitant to do repairs or anything in the back.

Tax Refund Anticipation Loans

Since the first day the office opened to the public, it was very hectic. The office was understaffed. They were offering a tax refund anticipation loan, and many people came to get it. They were willing to borrow money against their tax refund and pay the exorbitant interest rates to do it. There was a long line, and we had to learn the software and do the taxes very quickly to keep the line moving. The manager brought some fast food so we could eat something. There were no breaks, not even for lunch. The lines lasted for several days until everyone who wanted one of these loans got one.

Taxes and More Loans

Eventually, the traffic calmed down. People started getting their W-9s and we were doing actual taxes. People could still borrow against their refund. Even though the tax refund would only take a couple of weeks to get in, people were willing to pay incredible interest rates to get their money. By this time payday lending had already been in the news, and laws had been written to restrict that.

The people who came into the office were not rich people. The office was in a poor part of town, and most people came to the office with small incomes and children that helped them get the earned income credit. These were not people who had money to waste, yet they were willing to get the loan. Even if they hadn't gotten a loan, they still paid more than $100 for tax preparation service which they could have done themselves for free.

Even when they got their loan or refund check, instead of going to a bank, they went someplace where they would have to pay to cash the check.

Layoffs

Eventually the traffic died down. Instead of keeping the tax preparers until April 15, they let half of the staff go. The manager said they did this every year. I would have been very angry if I had been one of the people that was let go after going to school for so long. Although there was no guarantee of employment, you would think that you would have the job for the tax season unless you did something wrong, which was not the case.

The month of March was very quiet, but eventually people who procrastinated doing their taxes came to get them done in April. Even then, many people chose to get a loan instead of waiting for the check to come in. I worked until the end of the season, April 15th. The company decided it did not have enough profit to share at the end of the year. I chose not to work for the tax preparation service again.

Comments: "My Experience as a Tax Preparer"

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    • Millionaire Tips profile image
      Author

      Shasta Matova 5 years ago from USA

      That's true, Au fait, time to think about taxes again!

    • Au fait profile image

      C E Clark 5 years ago from North Texas

      This being tax season and the free classes again being offered, this hub could be just what people are looking for!

    • Millionaire Tips profile image
      Author

      Shasta Matova 6 years ago from USA

      Thank you bankscottage.

    • bankscottage profile image

      bankscottage 6 years ago from Pennsylvania

      Our prepares usually work 4 or 8 hour shifts. If we are busy, we ask them to stay, but they are not obligated to do that (they usually at least finish the return they are working on). We usually try to staff to cover peak so that preparers don't feel they aren't allowed to go home. Also, since we have multiple stores, if 1 is busy and 1 is slow, we can shift people around. It is better to be busy than to sit in a tax office doing nothing (besides, they only get bonuses if they prepare tax returns so most want to do as many as possible). In the the busy season, each preparer gets more shifts. In the slow season each will still get 1 or 2 shifts a week. It would be rare for anyone to get no shifts in a week (unless they requested it).

    • Millionaire Tips profile image
      Author

      Shasta Matova 6 years ago from USA

      Thank you for taking the time to provide your input bankscottage. I understand not paying for training when you are not sure the person is going to be hired, but I think they should be paid retroactively when they are hired. After all, they are training to work for you. Even if you don't pay for that, at least pay a salary for the ongoing training. Also, we were told we would have to work long hours during the peak season, but I didn't understand that to mean that there may be absolutely no work during the other times.

      I agree that it is amazing and sad that by the time the tax office, the loaning bank, and the check cashing place each take their cut, there is very little of it left for the customer, especially since there are other options.

      I do think it is a good job for people who are looking for temporary work to meet and help people and learn about taxes. It doesn't pay a lot of money, but it is better than nothing and does pay better than some entry level jobs. If you ask around, you may even be able to find an office that treats their employees well and have decent working conditions.

    • bankscottage profile image

      bankscottage 6 years ago from Pennsylvania

      Nice hub. In general, I would say your description is fair and balanced. As you point out, not all tax preparation franchises are the same. In fact, even within the same franchise, I suspect there are differences between owners.

      I work with Liberty Tax Service and we do provide free training, but don't pay people to go to school. Frankly, we are looking to train people who we may want to hire for positions during the tax season. But, several people never complete the course. Even those that complete the course are not obligated to take a job with us. They can use the information however they like. We do want our employees to understand the tax code as well as our software. We do provide ongoing training and with the new requirements for PTIN (a number from the IRS that identifies you as the preparer on a return) we will have to offer continuing education to our prepares.

      None of our preparers expect this to be a full time job. They often have other full time positions or are retired or stay at home moms looking to pick up a little extra money. Yes, there are a lot of hours for everyone the first 3-5 weeks of the season and the last 2 weeks. Most seem to understand that. We do offer a bonus and we have NEVER not paid it (early on, the partners did not take a profit and actually put more money into the business, but the preparers still got their bonuses). We have a nice little party for the preparers and their spouses at the end of the season. We appreciate our preparers and they seem to appreciate us by the fact that they want to work for us year after year (they could always go to a competitor to work if they didn't like us). Experienced preparers are invaluable.

      One big advantage we offer our employees is the chance to do their returns for free plus a few for their family at a steep discount (less than what a copy of TurboTax would cost). For some of our employees with small businesses of their own or rental properties, the value of the free return can be worth a lot of money.

      I too am amazed at the people who want the loan option. Many come to us (even over getting it done for free) because they want the loan. Financially, it makes no sense to me. I even try to talk some out of it without success.

      We would be happy to direct deposit the refunds, but many of our clients don't have checking accounts. Anyone who thinks the fees to actually prepare the return, or the fee the bank charges for the loan are high, should look at check cashing fees. Some of the banks I believe charge 3% just to cash the check (a rather secure check at that). Some of our clients get $5000-8000 refunds. That works out to $150-180 just to give people their money. At least the tax preparer had to actually do some work to earn their fee and the bank had to take the risk that the IRS would not deny the clients return and take their refund for back taxes or child support. (

      Anyone who wants the tax refund anticipation loan should realize it is a loan. The person that takes it signs loan documents basically asking for a loan and pledging their refund as collateral. If for some reason (often back taxes or child support) the IRS denies or takes the client's refund, the client will not end up having a refund to pay off the loan. The tax preparer does not get paid their fee, but the bank doesn't let the client off that easy.

      The client will have to pay the bank back. They signed a loan agreement. Our policies require that we point out several times to our clients that this is a loan. That they may have to pay the money back and what exactly the bank fees and interest rate are that they are being charged. There is nothing hidden anymore. While we can't make the client listen, we do our best to inform them of exactly what they are getting into. (In fact, because many banks don't offer the loans, they are much harder to get, have more stringent requirements, and are limited to the amount you can actually receive as a loan. Our bank will not loan more than $1500.

    • Millionaire Tips profile image
      Author

      Shasta Matova 6 years ago from USA

      Thank you for visiting and providing your input alocsin, mljdgulley354 and Pamela. The company I worked for did not provide free training, in fact we had to pay for it, although I could have insisted on a discount. The subsequent years were free though. (I think they should have paid us for the training as well). Pamela, we weren't treated very well either, and had to deal with deplorable working conditions, which I was hoping was an exception and not the norm.

    • Pamela Kinnaird W profile image

      Pamela Kinnaird W 6 years ago from Maui and Arizona

      I have a friend, a wealthy friend, who wanted something to do more than she was doing, so she trained with one of the income tax chains with online course. As soon as she started working at the office, the owner of the outlet -- who also owned three other locations -- was on the phone bossing her around, giving rants and orders on the simplest things. Anybody can buy a business, but not everybody can run a business in a professional and successful manner, so my friend decided she'd had enough of that kind of boss -- a woman totally not ready to be in business. My friend generously gave two weeks notice before hanging up her cap.

      It is especially sad that the poorest people have to pay so much. In Hawaii, there is however a course for the elderly and low-income -- and if the person can get through it, they can do their own taxes forevermore. They do have one-on-one instructors for the course in the fall.

      Great article. Voting up.

    • mljdgulley354 profile image

      mljdgulley354 6 years ago

      I always wondered about all the tax preparation offices that crop up every year. I have a bookkeeper that I use all year and she does our taxes. I don't have to pay that much for getting my taxes done either and that is when I do pay for the whole year of help. Voted up

    • alocsin profile image

      alocsin 6 years ago from Orange County, CA

      Thanks for sharing your experiences, though I always assumed that they paid you for training. It's unfortunate that many of your clients needed to use what little cash they had just to get their money. Voting this Up and Interesting.

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