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Average tax preparer salaries are in the range of $50,000 to $80,000 or $11 to $41 per hour. However, there are a few different types of tax preparers, such as enrolled agents, certified public accountants (CPAs), and tax attorneys. Each role has different sets of job responsibilities and therefore has varying salaries. In addition, the annual income you will make as a tax preparer can also depend on your state of residence.
A tax preparer prepares income tax returns for taxpayers. They often also answer questions for the clients they are filing for. A typical tax preparer salary in the U.S. is $50,390 a year or $22.26 per hour. This annual salary can increase as you gain more experience or additional degrees.
As mentioned earlier, the salary varies by state and tends to be higher in states with a higher average cost of living. Here are examples of states with their corresponding average tax preparer annual salaries:
This is a great career for those who have great organizational skills and are able to keep track of a lot of paperwork. Although a tax preparer earns much less than an accountant or a tax attorney, becoming a tax preparer doesn't require a college degree. It only requires a preparer tax identification number (PTIN), but in some states, a separate credential or license is required.
A tax preparer should also be familiar with professional tax preparation software.
An enrolled agent is the highest credential you can get from the IRS. They have unlimited practice rights, meaning they can represent an individual, business, or organization. According to the U.S. Bureau of Labor Statistics, an average enrolled agent salary is $56,780 a year, which comes out to $27.30 per hour. However, the top 10% earn up to $102,840 annually.
Like a tax preparer, an enrolled agent does not need a college degree. To become an enrolled agent, you must pass a three-part tax return test from the IRS. The test covers both individual and business tax returns.
A certified public accountant, or CPA, is an accounting professional licensed by the state they practice in. The median tax CPA salary is $77,250 per year or $37.14 per hour. The highest earners can earn upwards of $128,970 a year.
CPAs can file tax returns for taxpayers but can additionally provide many more services as well, such as examining, maintaining, and auditing financial records.
A tax attorney is a lawyer that specializes in tax policies and tax liability. They also draft legal documents and conduct estate planning.
In order to become a tax attorney in most states, you must have a bachelor’s degree and a law degree. You must also pass the bar exam. The process can often take up to 8 years, but the earning potential is very high.