Many people mistakenly believe that it requires an accounting degree or another type of educational achievement to become a professional tax preparer. You'd be surprised to know that the IRS isn’t overly strict about who can become a Tax Preparer.
For the most part if you can successfully obtain an IRS Preparer Tax Identification Number (aka PTIN), you may prepare federal tax returns for clients and get paid for your work, knowledge, and time.
According to the IRS:
Any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns. However, tax professionals have differing levels of skills, education, and expertise.
There are only 2 groups of Tax Professionals
The primary difference between the different types of Income Tax Professionals is their representation rights before the IRS beyond the preparation of tax forms. Tax professionals either have Unlimited Representation Rights or Limited Representation Rights.
Limited Representation Rights: Annual Filing Season Participants are preparers whom have limited practice rights. They may only represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service.
Unlimited Representation Rights: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. These Tax Professionals may represent any client on any matters including audits, payment/collection issues, and appeals.
AFSP (Annual Filing Season Participant)
EFIN Holders (Electronic Filing Identification Number)
Enrolled Agents (credentialed tax preparers)
A Preparer Tax Identification Number (PTIN) must be obtained by all tax professionals who prepare all or substantially all of a federal tax return for compensation. It’s a unique nine-digit number that enables the IRS to identify who the professional preparer is who helped a taxpayer prepare and file their income tax return.
The IRS issues PTINs for a fee ranging from $0-$56 depending on the year. Because PTINs expire on December 31 of the year in which they are obtained, tax preparers must renew them annually. Generally, individuals must provide their social security number when requesting a PTIN from the IRS. Applicants who apply online can obtain a PTIN in about 15 minutes.
The IRS estimates it will take between four to six weeks to obtain a PTIN if submitting Form W-12 (IRS Paid Preparer Tax Identification Number Application and Renewal) by mail.
Working for an Established Tax Business
When you think about Tax offices I am sure many of the big box brands come to mind like HR Block and Jackson Hewitt, however there are hundreds of tax firms to choose from. If you would like to get started in the field with the bare minimum, working for a tax business will save you money on Tax Law training, software, and promotions. You can feel confident with knowing your income has been pre-determined to know what you are worth for the year as long as you show up and help.
Working for Yourself
Majority of Tax Professionals enjoy the feeling of control over their income and time and working for yourself offers that flexibility and freedom. Because most of the work is seasonal you will learn new tax laws, understand situational tax strategies through practice. You can get started for as little as $100 and that may include obtaining software, securing marketing, and creating a payment structure depending on how expansive you want your business. You can file returns for families, students, non-profits, or businesses.
You will feel empowered knowing your income has no limits and as long as you provide great work to your clients, they will help you by sending referrals.
To help taxpayers determine return preparer credentials and qualifications, the IRS has a public directory containing certain tax professionals. This directory is searchable, sortable database includes the name, city, state, and zip code of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, and enrolled actuaries with valid PTINs for 2023, as well as Annual Filing Season Program Record of Completion recipients.GET LISTED
|Learn Tax Laws
|Choose a Business Name
|Register Your Business Name
|Obtain an EIN
|Open a Business Bank Account
|Apply For Licenses
|Obtain an EFIN
|Purchase Tax Software
|Create a Data Security Plan
|Purchase Business Insurance
|Create a Marketing Plan
|Create a Compliance Plan
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Although the information from deciding a business name to establishing data security protocals for IRS compliance is available on this site - you may need it to print or deliver to others in a PDF or print format.