Tax Preparation vs. Accounting: What’s the Difference?

blogp2Think you need to be an accountant to successfully prepare taxes? Think again. One of the most common misconceptions about starting your own tax business is the need to possess the skills and experience of an accountant. This couldn't be farther from the truth, as tax preparation and accounting are two very different occupations. To better understand the difference between being an accountant and a tax preparer with America's Tax Office, consider these key distinctions.

Education

Tax preparers do not need to possess a four-year degree in finance or business to meet the responsibilities of their job. Tax preparers must complete thorough training, but don't need to acquire a four-year degree. Why? Our tax franchise's thorough one-on-one training ensures that affiliates learn the fundamentals of tax preparation; additionally, all tax preparation will be conducted with the assistance of advanced software, which eliminates the need for complex calculations.

Conversely, accountants must attain a four-year degree with courses that focus heavily on mathematics, business, and finance. Many also go on to pass a qualifying exam that enables them to become a Certified Public Accountant (CPA).

Work

Tax preparers manage clients' finances only as they pertain to tax returns. This means that tax preparers meet with most individual clients just once or twice a year to file their returns with the IRS. Extensive, comprehensive financial management is not required of a tax preparer. Accountants, on the other hand, can be called upon to perform a wide range of duties, including maintaining a company's general ledger, conducting internal audits, and recommending investment strategies for both companies and individuals. While accountants with their own accounting firms may assist clients with tax returns, this is not their exclusive responsibility.

Organization

All tax preparers within the America's Tax Office franchise operate as entrepreneurial affiliates that act as their own bosses; we provide a level of assistance and support, but the business is yours to grow. The ability of our affiliates to act as their own bosses is highly advantageous in regard to growth potential and flexibility. Conversely, most accountants are employed within organizations with standard work hours and management hierarchy; though some open their own accounting businesses, this comes with a degree of risk as most are not opened as part of a franchise.

The Takeaway: If you're interested in becoming a tax preparer, you don't need to complete the same training as an accountant. Tax preparation can be an option for individuals with little to no background in finance or tax preparation, and does not require comprehensive financial management. A tax preparer also affords notable flexibility in work schedule and structure.

For more information about becoming a tax preparer, reach out to us at America's Tax Office today!

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