As a retired CPA, you may be considering your next steps after a successful career. Becoming a tax preparer is an option that allows you to continue using your extensive knowledge and experience in accounting. This path offers numerous benefits, such as flexible hours, additional income, and the opportunity to assist clients during tax season.
Why consider tax preparation as a retired CPA?
As a retired CPA, becoming a tax preparer can be a rewarding option, offering both the ability to utilize your existing qualifications and the flexibility to work on your own terms . One of the key advantages is that you don’t need to maintain your CPA status to work as a tax preparer, which makes it a more accessible option. However, many retired CPAs decide to keep their license active. Maintaining CPA status can provide greater flexibility and open up more opportunities within the tax preparation field.Here are five compelling reasons to consider transitioning into tax preparation after retiring as a CPA.
1. You’re already highly qualified and sought after
Along with Enrolled Agents, CPAs are among the most qualified and sought after tax preparers. Your CPA title automatically gives you full representation rights before the IRS and credibility and trust among potential clients.
2. The flexibility of seasonal work
Whether your career is in audit, tax, or internal accounting, you’re likely already familiar with the ebbs and flows of seasonal accounting work. Tax preparation offers the chance to work for only a few months of the year and use the rest to pursue other interests and enjoy retirement.
3. Set your own work schedule
“Busy season” doesn’t have to be busy in tax preparation. You’ll have the ability to take on as many or as few clients as you want, working only as much as you want.
4. Almost no barrier to entry
As a CPA, you have even less barrier to entry than other types professional tax preparers, as you already possess the education and credentials to succeed. With the rise of virtual meetings and distance-friendly tax software like the TaxesToGo mobile app, you can establish a viable tax practice even without an office. Your only necessary startup cost is professional tax software.
5. Earn additional income
For retired CPAs, professional tax preparation offers a way to supplement your retirement income. Your expertise in tax law and financial planning allows you to provide valuable assistance to individuals and businesses during tax season. This can provide a much-needed financial cushion, enabling you to pursue hobbies, travel, or other interests.
You might consider specializing in areas of tax law that interest you or where you see a demand, such as retirement planning, small business tax strategies, or estate planning. This specialization can enhance your value to clients and help you command a competitive rate for your services.
How to transition from a CPA to a tax preparer
While CPAs possess a broad understanding of accounting principles, shifting to a tax preparer role allows for a more focused application of tax laws and regulations. Below are key steps to facilitate this transition effectively.
Step. 1 Register as a tax preparer
For retired CPAs looking to register as tax preparers, it’s important to obtain a Preparer Tax Identification Number (PTIN) and an Electronic Filing Identification Number (EFIN). Although you may already be familiar with tax law, a PTIN is still required for anyone preparing federal tax returns for compensation, while the EFIN is necessary for e-filing.
You can easily apply for your PTIN online through the IRS website, where a short application will allow you to obtain your number. After securing your PTIN, you’ll need to apply for an EFIN, which involves applying and undergoing a suitability check.
Additionally, be sure to research your state’s specific registration requirements for tax preparers, as these can vary and often include additional certifications, licenses, renewal procedures, or background checks.
Step 2. Choose your tax preparation software
For retired CPAs selecting tax preparation software, it’s important to consider factors such as user-friendliness, support options, and the specific features that cater to your needs. TaxSlayer Pro professional tax software offers a range of packages to support your business needs can make the process much smoother, including:
- Cloud-based tax software — Embrace the convenience of a mobile tax office with our comprehensive web-based software package. Prepare and e-file individual tax returns seamlessly on multiple devices, ensuring flexibility and mobility.
- All-inclusive tax software — Each of our tax software packages includes free, unlimited federal and state electronic filing, all state and local taxes, and our top-rated technical support.
- Premium tax software — Our premium package includes a full corporate business suite, which allows electronic filing of federal and state counterpart forms 706, 709, 990, 1041, 1065, 1120, 1120-S, and 5500.
See what customers are saying right now and explore TaxSlayer Pro reviews on Trustpilot.
Step 3. Start marketing your tax prep business
Growing your tax preparation business should include creating a marketing strategy to promote your tax services. This may involve:
- Building a professional tax prep website to showcase your services and provide valuable information
- Creating and maintaining an active social media presence to engage with potential clients
- Utilizing email marketing campaigns to keep in touch with past clients and inform them of your services
- Networking with local businesses and community organizations to build relationships and gain referrals
- Offering promotions or discounts during peak tax season to attract new clients
- Implementing traditional marketing methods such as flyers and local advertising to reach a broader audience
Other reasons to keep your CPA status active
Maintaining your CPA status allows for greater flexibility in retirement and provides options for generating additional income. Since you have invested significant effort and expertise in obtaining your credentials, consider keeping them active.
1. More options in retirement
If you ever plan to offer accounting, auditing, tax, or consulting services again after retirement – even just occasionally – you’ll have far more options if you still have an active CPA credential.
Once you give up your CPA status, you can no longer perform or offer services related to accounting, auditing, financial statement preparation, management advisory, financial advisory, or consulting. Additionally, you will not be able to prepare tax returns or provide advice on tax matters as a CPA.
Many CPAs choose to remain active even after retiring to keep the option open for future opportunities. Keep your license active by completing online continuing education courses and state-specific requirements.
2. Avoid reinstating your CPA status
By keeping your CPA status active, you can avoid the hassle of reinstating it later. Reinstatement could involve catching up on CPE or even re-taking the CPA exam. Even if you never plan to work as a CPA again, keeping your credential active allows you to pursue work and passion projects you may discover later such as helping a family member with their business or offering seasonal tax preparation help.
In short, even if you’re unsure about offering professional tax preparation or other services after retirement, maintaining your CPA status will leave you free to decide later – without having to reinstate your license.
