Are you interested in learning how to become a registered tax preparer in Canada?
As a tax preparer, you’ll help consumers and small businesses file their income tax returns and help them navigate the complexities of the Canadian tax system. If you want to start preparing tax returns, though, you’ll need to get educated and register with the Canada Revenue Agency (CRA).
The steps on how to become a tax preparer in Canada are as follows:
- Complete post-secondary school (university or college)
- Learn tax laws
- Complete vocational training
- Start your tax preparation business
- Register with the CRA
- Obtain business liability insurance
Below, I’ll break each of these steps down in further detail so that you can get started on your career path!
Although college and university courses can help, you don’t need a four-year bachelor’s degree to become a registered tax consultant. You also don’t need to go through the extensive process required to become a CPA in Canada.
Although you won’t be a Chartered Professional Accountant, you can work at accounting firms under CPAs. If you’re interested in pursuing a career as a CPA in the future, this can be a great opportunity to get your foot in the door, gain valuable on-the-job experience, and advance.
Alternatively, you could also start your own business as a tax consultant and help others prepare taxes correctly.
All in all, it’s not difficult to become a tax preparer. As long as you’re good with numbers and can read through some of the technical/legal jargon in Canadian tax laws, it’s not a difficult career to train for.
Ready to get started? Here’s a step-by-step guide on how to become a professional tax preparer.
Step 1: Complete Post-Secondary School
Although there is no official requirement for this, consider completing post-secondary school before starting training to become a tax preparer. If you’re reading this and you’re already enrolled in university or college, I recommend taking some classes that focus on math, economics, and business.
Before you enroll in school and start your formal education, I suggest researching tax laws and finance to see if it’s a career field that interests you. This can also give you a leg-up once you start vocational training to become a tax consultant/preparer.
Individuals who want to provide tax preparation services should start by learning about tax laws and tax theory. One of the first things you’ll want to acquaint yourself with is the different types of tax deductions and refunds that your clients can take advantage of.
All tax preparers should complete a vocational training program before they can register with the CRA and get paid to file tax returns. Many institutes offer courses to those interested in a career in accounting and tax preparation. You can also enroll in an online program.
These courses will teach you about federal tax laws, tax codes, how to claim deductions, and taxation in general.
Depending on the school you’re attending and the courses you’re taking, you could complete your training in a few weeks.
- Knowledge Bureau: They offer a Tax Preparer Certificate, which is a comprehensive program designed to teach tax preparation skills. You can complete the courses online, at your own pace.
- Canadian Tax Academy: The Canadian Tax Academy provides an online course called the “Personal Tax Course” designed for individuals looking to start a career in tax preparation. The course covers tax preparation for individuals, sole proprietorships, and rental property owners.
- H&R Block Tax Academy: H&R Block, one of the largest tax preparation companies in Canada, offers the H&R Block Tax Academy. The comprehensive tax course covers the essentials of personal tax preparation. Upon successful completion, you may be offered employment with H&R Block.
- CRA’s Community Volunteer Income Tax Program (CVITP) also offers training for volunteers who provide tax preparation services for low-income individuals and families.
While certification is not a legal requirement, obtaining a certification from one of these institutions can help you build credibility and enhance your skills as a tax preparer in Canada.
Once you complete your course and pass your exam, you’re ready to register with the CRA for EFILE, which gives you the ability to file returns on behalf of your clients. The CRA screens all applicants before they can begin – a process which can take up to 30 days.
Once you’re approved, you’ll receive an EFILE number from the CRA, along with access to the tax preparation tools you’ll need to work with taxpayers.
Once the CRA approves you, you’ll have two career choices:
- Work with accountants in an accounting firm
- Start your own tax preparation service
Working with larger companies provides more steady employment. Taking on your own clients can help you earn higher pay, but you must work hard to advertise your service and acquire your first customers.
Many tax preparation professionals start by finding employment with a company and later branch out to start their own small businesses.
If you decide to start your own business, you should definitely purchase liability insurance. This will help save you if a client tries to sue you after making mistakes on their income tax forms.
If you’re working at a firm, you won’t have to worry about this, as you’ll be covered under the company’s insurance policy.
If you start your own tax preparation company in Canada, here are a few helpful tips to help you acquire clients:
- Start by working with your friends and family
- Make a social media post advertising your services
- Build a website for yourself and get your business listed on Google
- Offer referral discounts when your existing clients refer you to new customers
- Make a few road signs and put them up around town during tax-filing season
- Learn or hire digital marketers to promote your business
As a tax preparer, it’s imperative to commit to lifelong learning. The Canadian tax landscape evolves constantly with new regulations, laws, and changes to existing statutes. Being updated with these changes is crucial to provide accurate and reliable service to clients.
Beyond understanding tax laws, it’s beneficial to invest in professional development courses that cover client relations, data management, and new software tools in the market.
Continuous education can elevate your career, making you a sought-after professional in the industry. Moreover, understanding global taxation systems, attending workshops, and joining seminars can give you a competitive edge.
Joining professional associations can also aid in expanding your network, attending events, and gaining access to a wealth of resources. For instance, the Canadian Tax Foundation offers various events, publications, and opportunities for professionals to enhance their knowledge and meet industry experts.
Ethics in Tax Preparation
Upholding ethical standards involves ensuring accurate representation of a client’s financial situation without indulging in any fraudulent activities. Misrepresenting information, even unintentionally, can have severe consequences for both the client and the preparer. Therefore, being transparent, honest, and thorough is paramount.
Maintaining confidentiality is another critical ethical concern. Clients entrust tax preparers with a significant amount of personal and financial data. It’s essential to have systems in place that protect this data from breaches and unauthorized access.
Lastly, tax preparers should always act in the best interests of their clients. This means offering advice that benefits the client’s financial situation, rather than pushing additional services or unnecessary actions that might increase the preparer’s fee.
To wrap things up, here are a few quick answers to some of the most commonly asked questions about becoming a tax preparer in Canada.
No, you don’t. Tax preparers registered with the CRA can help clients prepare and file their taxes. If you want to become a tax consultant, you’ll study some of the same tax courses and learn how to use the same tax software as CPAs.
However, your knowledge will be limited to filing taxes, whereas CPAs receive much more in-depth training in finances and Canadian taxes.
You can read the full list of the best free tax software in Canada here.
As a tax preparer, you must have good research and analytical skills. Although today’s tax software can handle most of the calculations required to complete income tax returns, you’ll want to have some good math skills.
Tax preparers also need to understand the value of privacy, as they’ll be responsible for handling their clients’ confidential information.
Tax preparers in Canada start at an average of around $20-$25 per hour if they pursue employment at a traditional accounting firm. However, if you start a business and take on your own clients, then you could stand to make much more.
Completing a tax preparation certification course doesn’t take a lot of time and can be a good way to get started working in the financial field. Many tax preparers eventually move on and go to university to become CPAs and improve their job prospects.
Still trying to find the perfect career path? Keep on reading to see the highest-paying professions in Canada!