The amount of money you earn as a tax preparer partly depends on your location. However, labor statistics show that tax preparers don't necessarily earn the highest wages in areas that employ the largest numbers of preparers. In any case, people who choose to work for tax preparation services may boost their income by earning commissions.
People who want to earn money by preparing other people's tax returns may choose to work with individual taxpayers or small businesses. In any case, tax preparers need to keep abreast of changes in tax laws to determine which deductions and credits their clients qualify for to help reduce their tax bills. The U.S. Bureau of Labor Statistics lists the 2010 mean annual wage for tax preparers at $37,060. Accounting, bookkeeping and tax preparation services are among the largest employers of tax preparers. In 2010, more than 55,000 preparers worked for such services and earned a mean annual salary of $36,910.
States with the highest employment levels for tax preparers include California, Texas and Florida. According to Bureau of Labor Statistics data, nearly 7,000 preparers worked in California in 2010, and they earned a mean annual salary of $44,840. Just over 4,200 tax preparers worked in Texas in 2010; the mean annual salary for preparers there that year was $40,540. Salaries were significantly lower in Florida where nearly 3,000 preparers worked in 2010; Florida preparers earned a mean annual wage of just $23,910 that year.
Tax preparers may earn the highest wages in their sector in Massachusetts, where preparers earned a mean annual salary of $57,650 in 2010. Bureau of Labor Statistics data show preparers earned some of the occupation's highest wages in Alaska and New Jersey as well. Preparers who worked in Alaska in 2010 earned a mean annual salary of $50,010, and New Jersey preparers earned about $49,790 that year.
In its list of top-paying cities for tax preparers, the Bureau of Labor Statistics cites several areas in California. For example, preparers in the San Francisco area earned a mean annual salary of $60,600 in 2010. Preparers who worked in the San Jose area earned a salary of about $57,630 that year. The 2010 mean annual wage for tax preparers in Oakland, California was $54,800.
A Monster online job board article on tax preparers by Dona DeZube notes that many preparers do seasonal work with large tax preparation companies such as H&R Block and Jackson Hewitt. According to DeZube, H&R Block hires about 80,000 tax preparers to work with the company's clients from January through April each year. Many of the temporary tax preparers who work for the company during that time have completed H&R Block's tax course as well. DeZube notes that H&R Block tax preparers' pay is based on a starting hourly rate of $9, but preparers also receive a commission that's partly based on the complexity of a client's tax return.
Frances Burks has more than 15 years experience in writing positions, including work as a news analyst for executive briefings and as an Associated Press journalist. Burks has banking and business development experience, and she has written numerous articles on consumer issues and home improvement. Burks holds a bachelor's degree in political science from the University of Michigan.