How to Become a Tax Preparer: Easiest Path to Follow

A career as a tax preparer offers you job security and flexibility, but above all, there is no ceiling on your earnings. All these factors make it a very interesting and rewarding career for anyone.

In the States, there is a shortage of qualified tax preparers every tax season. As we cannot expect the taxes to go away anytime soon, job security as a tax preparer is guaranteed. Nearly half of all Americans file tax returns each year and for guidance, they consult these professionals. With regular changes in tax laws and regulations, your services will be in continuous demand.

To become a tax preparer, you don’t need to be a Certified Public Accountant, as largely believed. Neither do you need a college degree nor high-level math or accounting skills. While requirements to become a tax preparer differ from state to state, the general path is quite simple and that’s what we are going to discuss in this article.

Step 1: Take a Beginner Tax Preparation Course

You must be aware of income tax guidelines and how to correctly prepare tax returns to be a preparer. A comprehensive beginner’s tax preparation course can teach you these basics. Such a course can also be taken by individuals who have no prior tax knowledge and will teach you to prepare tax returns for nonbusiness taxpayers, Form 1040 individuals, self-employed/Schedule C taxpayers.

You need to be careful about taking the preparation course. As there are many course providers, not all of them are reliable. We recommend you choose an IRS-approved continuing education provider such as TaxCE.com that offers 100% online IRS-approved courses.

Step 2: Obtain a PTIN

Preparer Tax Identification Number, commonly known as PTIN, is a mandatory requirement for paid preparers issued by the Internal Revenue Service (IRS). Anyone who assists or prepares federal tax returns for compensation is required to have a valid PTIN which is renewed annually.

You can obtain your PTIN online in just 15 minutes by paying the non-refundable fee of $35.95. To apply for PTIN visit here.

Pro tip: Apply for PTIN while you are still at step 1. You don’t have to wait until you complete your preparation course.

Step 3: Check Tax Preparer Requirements for Your State

Regulations for tax return preparers vary widely from state to state. Make sure to check the requirements of the state you live in. These requirements can range from requiring a beginner course to annual registration, and/or pass a mandatory state exam. States like California, Iowa, New York and Maryland, do have requirements.

Fortunately, many states still don’t have any such requirements, but you have to be sure.

Step 4: Take Annual Federal Tax Refresher

The Annual Federal Tax Refresher (AFTR) course is part of the IRS voluntary Annual Filing Season Program.

This 100-question knowledge-based comprehension test is not a requirement, but we still see it as a wise move.

Why?

After completing this course and taking the knowledge test you receive an AFSP- Record of Completion from the IRS. This credential sets you apart from your competition and makes you more appealing to clients.

That’s it

These are the steps you need to complete to join the tax preparers who help tens of millions of Americans every year to prepare and file their taxes while earning a good sum themselves.