Tax preparation hiring: Vet preparers before filing season

What to take away

This tax preparation hiring guide covers tax-practice business operations. It is not individualized tax, legal, credential or employment advice. Requirements depend on the tax year, the return, the jurisdiction and the client's facts, so confirm current rules with the IRS, your state tax authority or a licensed CPA or enrolled agent.

Start with the returns, not the job title

Write down which returns your practice actually files. A 1040 with a W-2 is a different skill from a Schedule C with mileage, and a partnership return is a different job again.

That list decides the hire. A person who can carry simple individual returns alone is not automatically able to carry a business return through depreciation and basis.

Then split the work into two piles: what one person must finish alone, and what needs a reviewer. Most bad hires in a small tax office come from a title like "tax preparer" that never said which pile the person was in.

The PTIN question, answered before the interview

The IRS publishes a plain answer to who needs a Preparer Tax Identification Number. A bookkeeper whose work is only gathering, organizing and recording client information generally does not need one. Anyone paid to prepare or substantially help prepare a federal return generally does, and each preparer needs an individual PTIN.

That distinction sets your job posting. If the role touches return positions, the posting should say the hire must hold or obtain a PTIN, and you should verify it before the person touches a client file.

Read the current IRS guidance at IRS: Frequently Asked Questions: Do I Need a PTIN? and check the status through the IRS Tax Pro Account rather than a photocopy of last year's card. PTINs must be renewed annually; confirm active status and current renewal instructions before assigning paid preparation work.

PTIN and EFIN serve different purposes. If your practice will transmit returns as an IRS e-file provider, apply through the IRS e-file application and receive an EFIN; a PTIN does not authorize a practice to e-file returns.

A worked trial task

Give every shortlisted candidate the same paid exercise: a sample return in the software your office runs, with one deliberate wrinkle such as a missing 1099 or a client who claims a dependent they cannot document.

Score four things on one sheet:

Pay for the exercise. Unpaid trial work invites wage complaints and tells you nothing about how someone behaves when the work is real.

Build the calendar around filing season

Hiring has a season. A preparer who starts in November can be trained on extensions and clean-up work before the January rush. A preparer who starts in February is learning while the phones ring.

Before setting start dates, check the IRS filing-season announcement for the opening date and IRS due-date guidance for the returns your practice handles. Build the staffing calendar around the applicable deadlines rather than treating every filing deadline as the same.

If you cannot hire before the season, hire for the season after it. Use the quiet months for training on software, client intake and your review checklist.

Plan the first six months as a sequence: intake and software, then simple returns under review, then solo simple returns, then complex work with a named reviewer. Write the sequence down and give the new hire the dates.

Employment duties you cannot skip

New employers carry wage, overtime, timekeeping, and child labor duties. They also carry leave, notice, and recordkeeping duties under federal and state law. The U.S. Department of Labor keeps a starting point for small businesses at U.S. Department of Labor: New and Small Businesses.

For employees, obtain Form W-4 for federal income tax withholding and complete Form I-9 to verify identity and employment authorization. Follow the applicable state's new-hire reporting requirements.

Apply Fair Labor Standards Act (FLSA) overtime and exemption rules. Do not classify a preparer as exempt based on job title alone; exempt status depends on applicable duties and salary tests, and nonexempt employees are subject to overtime requirements.

Hiring decisions also have to be made on job-related grounds. The EEOC publishes small-employer guidance on nondiscrimination, accommodations, employment records and workplace notices at U.S. Equal Employment Opportunity Commission: Small Business Resource Center.

Ask every candidate the same questions and score the answers the same way. Keep the notes. A hiring file that shows why you chose one person over another is worth more than a good feeling about an interview.

References, checked properly

Call references and ask about the hard weeks: the return that went wrong, the client who escalated, the deadline that slipped. Ask what the person did next.

Verify credentials, PTIN status and prior employment lawfully and consistently for every finalist. Do not ask about protected characteristics, and do not let a reference call replace the trial task.

Common questions

Does a bookkeeper need a PTIN?

Generally no, if the work is only gathering, organizing and recording client information. A person paid to prepare or substantially help prepare a federal return generally does need an individual PTIN, and each preparer holds their own.

Should the trial task be paid?

Yes. Paying for the exercise keeps the arrangement clean under wage rules and shows you how the candidate works when the work counts. It also gives every finalist the same basis for comparison.

When is the best time to hire?

Aim to have a new preparer trained before filing season opens, so the learning happens in the quiet months. If that window has passed, hire for the next cycle and use the off-season for training. Use the sequence above to set training dates and check them against the annual IRS filing-season announcement.

What if I am not sure the role needs a credential?

Name the returns the role will touch and ask your state board, the IRS or a licensed CPA or enrolled agent. Do not guess. Getting this wrong puts signed returns and the practice at risk.