How Do I Become An Income Tax Preparer?

Many people run into problems when preparing their taxes and this is one of the reasons why hiring a tax preparer has become a norm. However, how does one become a tax preparer?

Before diving into becoming a tax preparer, there is the need to know a little more about this line of profession in order to decide whether it is right for you or not. Tax shark, a top tax firm, takes you through everything that you need to know about what a tax preparer does and how to become one in this article.

What does a tax preparer do?

The job of a tax preparer is to help other people to prepare their taxes such that they are free from common errors that can land them in trouble with the Internal Revenue Service (IRS).

Tax preparers basically help in the preparation and filing of tax returns. They also offer help with general tax forms and other related needs. However, beyond these surface activities, a tax preparer is also knowledgeable and can help to defend clients who have run into problems with the IRS.

While some tax preparers also offer help with tax court issues, it is important to note that the extent of the services that can be rendered by these professionals is dependent on the credentials that they hold.

In general terms, tax preparers are required to serve both their clients and the IRS. On the one hand, they are helping their clients to file their taxes appropriately and defending them against tax issues raised by the IRS, on the other hand, they are helping the government to make more money by ensuring that taxes are diligently filed and that all financial transactions are accounted for.

Becoming a Tax Preparer

If you nurse the ambition of becoming a tax preparer, then the process of becoming one is straightforward. Although not necessarily easy, below are some of the things you need.

– Know-how – As a new tax preparer, you need to be aware of the ins and outs of the field and business. It is best that before you delve deeper, you should endeavor to learn as much as you can about the profession, the lingo, and more. This know-how enables you to not only handle your business perfectly but also helps you to provide confident services. Getting this know-how may be through certification or other forms of education.

– Technology – Similar to most professions, access to the right technology and tool at the right time can help to significantly reduce your burden while improving client satisfaction. Gaining access to the right technology will help you to work more efficiently and accurately. It helps to start by researching the best tax professional software that you can use and how to use them effectively and efficiently.

– Clients – as a tax preparer, one of the ways to ensure that you become better at what you do is to have more clients. Attracting more clients is the marketing side of the business and you must excel in this area as much as you excel in getting an excellent job done.

– Proper Tax Identification Number – as a tax preparer who wishes to get paid for the services rendered, you need to also have a preparers tax identification number (PTIN).

The Requirement for IRS Tax Preparer Certificate

The IRS requires that all paid tax preparers own a PTIN. To get the PTIN, you will be required to pass the suitability check conducted by the IRS. If you, however, wish to become an enrolled agent, you may need more certification including state licenses. You may also be required to obtain electronic filing identification numbers (EFIN).

How to obtain a PTIN?

Having decided to proceed with becoming a tax preparer, you will be required to obtain a PTIN which can be applied for via the IRS website. The PTIN, once issued, will be renewed annually at no cost.

Once a tax preparer has been issued a PTIN, he or she is required to put the number on all documents they prepare.

Any license requirements to prepare tax returns?

Although tax preparers start their process by obtaining a PTIN, this should not be confused with a license. As a tax preparer, you may not require a license but if you wish to represent clients in tax-related issues, then you need to become a CPA, an enrolled agent, or a tax attorney.

While not all of the states require licenses to become a tax preparer, seven states do. States that require a separate license or credential include California, Connecticut, Illinois, Maryland, Nevada, New York, and Oregon.

How long does it take to become a tax preparer?

To become a tax preparer takes time, especially as it takes time to obtain a PTIN and an EFIN. This does not, however, mean it doesn’t take more time to build a clientele list as well as a business and brand that is trusted by clients.