How To Become A Registered Income Tax Preparer In Virginia

Preparing tax returns tin can be a lucrative full-time or part-time business. And becoming a tax preparer can exist easier than yous retrieve. Allow'due south discuss how to become a tax preparer, how to get certified to exercise taxes, and answer other of import questions in the guide below.

What types of people prepare tax returns?

At that place are over i.2 million tax preparers in the U.s.a.. They come in all shapes and sizes. They range from licensed professionals to people without formal training who prepare tax returns part-time. Allow'due south look at the different types of people who prepare tax returns for clients and how to become a tax preparer for each type.

Certified Public Accountants (CPA)

CPAs represent the high end of the tax pro spectrum careers. CPAs non merely gear up taxation returns, they routinely represent clients in revenue enhancement and fiscal matters earlier the IRS. Their duties also include sophisticated bookkeeping and tax piece of work. CPAs generally work in large national firms or modest local outfits. Each state licenses and regulates certified public accountants (CPAs) located in the state. Most CPAs major in accounting in college. You must have a minimum of 150 hours of college accounting courses to exist a CPA. The learning process as well requires you to pass a comprehensive CPA exam.

Enrolled Agents

Enrolled agents (EAs) are tax advisers and preparers who are licensed by the IRS. You must laissez passer a difficult IRS test to become an enrolled agent. Only y'all don't have to have any particular educational groundwork. Anyone who can laissez passer the test tin become an EA. Like CPAs, EAs can represent taxpayers earlier the IRS and in authoritative proceedings, circuit court, and, possibly, tax court.

Non-Credentialed Taxation Preparers

Non-Credentialed taxation preparers are people who ready taxation returns but are not CPAs or EAs. In that location are about 600,000 to 700,000 people who piece of work as non-credentialed taxation preparers. They often work part-time or only during the tax season. Many tax preparers practice with national taxation preparation services like H & R Cake, Freedom Taxation Service, or Jackson Hewitt Taxation Services. All the same, there is nothing to prevent you from setting upward your ain tax preparation business. Not-Credentialed tax preparers typically handle individual tax returns, which are less complicated than those for businesses. They generally get paid less than CPAs and EAs. But that doesn't mean yous tin can't make good money.

Do y'all need a license to go a non-credentialed taxation preparer?

A big part of figuring out how to get a tax preparer is learning what licensing y'all will need. The IRS does trivial to regulate non-credentialed tax preparers. It does not require them to take licenses. Simply non-credentialed revenue enhancement preparers can't represent clients earlier the IRS. Regulating revenue enhancement preparers is left to the states. In the vast majority of states, anyone can set revenue enhancement returns for others without having to take a competency exam, get a license, or comply with any other government regulation. As part of the steps to become a revenue enhancement preparer, a few states do license preparers. These are California, Connecticut, Illinois, Maryland, Nevada, New York, and Oregon. Too, 20 states take special regulations you must comply with if yous offering tax refund apprehension loans to your clients.

African American tax preparer consulting with a African American professional

How do you become a not-credentialed tax preparer?

Here are the steps you should take to become a non-credentialed tax preparer.

Step 1: Get the preparation

You don't need to be a genius to set up tax returns. And don't need a college degree. However, you should have a loftier schoolhouse diploma or GED. Moreover, you don't necessarily need an all-encompassing groundwork in accounting. Most not-credentialed tax preparers handle returns for individuals, which are normally routine. Nevertheless, y'all withal need training so you tin can competently prepare tax returns for others. The less groundwork y'all accept in revenue enhancement and accounting, the more than training you lot'll need. If you intend to specialize in taxes for individuals, you'll demand less schooling than if you bargain with business taxes. In that location are many tax training resources:

Your local community college may offer courses.
National revenue enhancement preparation firms like H & R Block, Freedom Revenue enhancement Service, and Jackson Hewitt Tax Services all provide grooming courses, oft at low cost.
Some tax grooming companies offering on-the-job training.
Many private training companies and technical colleges offer courses.
The Accreditation Council for Accountancy and Taxation (ACAT) and National Association of Taxation Professionals both present training courses. The ACAT offers an Accredited Tax Preparer credential to those who consummate its courses and pass an exam. Credentials are not required to be a tax preparer but tin can help you become hired or paid more.

You can access a comprehensive list of revenue enhancement preparation resources from the IRS website.

Step two: Become your PTIN from the IRS

Anyone who prepares federal revenue enhancement returns for money must accept a valid Preparer Tax Identification Number (PTIN). You obtain information technology from the IRS. Getting a PTIN registers you as an "unenrolled preparer," granting you the minimum level of clearance to set up federal taxes. You utilise the PTIN to place yourself as a paid preparer in the returns you draw upwardly for your clients. You can obtain your PTIN online, and it's gratuitous. To go a PTIN, you must

Be at least 18 years former
Provide your accost
Provide your Social Security number
Explain any felony convictions, and
Explain if you lot owe money to the IRS

There are no other requirements. Just, if you have felony convictions or owe money to the IRS, it might concord up your PTIN.

Step three: Get your EFIN from the IRS

If you intend to work every bit a taxation preparer on your own, y'all need to obtain an Electronic Filing Identification Number (EFIN) from the IRS. You'll need this number to e-file returns for your clients. Any taxation preparer who prepares 11 or more tax returns a year, must e-file the returns. To obtain an EFIN, you must:

Create an IRS e-services Account
Submit an IRS online due east-file application, and
Laissez passer a Suitability Bank check

Obtaining an EFIN is free. But y'all may have to become fingerprinted, which tin can cost near $50. The IRS doesn't desire to give criminals EFINs. So it may check your credit history and criminal record. It volition also check to come across if you owe the IRS money. For more information, refer to IRS Publication 3112, IRS e-file Application and Participation.

Step 4: Comply with state licensing requirements for not-credentialed tax preparers

The post-obit states require non-credentialed tax preparers to obtain a state-issued license or registration. Many impose instruction and competency test requirements as well. These license requirements do not apply to CPAs, enrolled agents, or attorneys. Some of these states have other exemptions. So study your land's policy and requirements carefully.

California

Tax preparers must register online with the California Tax Education Council to work in California. To do so, you must:

Take a 60-hour qualifying education grade from a CTEC approved provider within the past eighteen months
Purchase a $5,000 tax preparer bond from an insurance/surety agent
Obtain a Preparer Tax Identification Number (PTIN) from the IRS, and
Pay a $33 registration fee

Y'all must also complete 20 hours of continuing taxation professional education each year.

Connecticut

Tax preparers in Connecticut must obtain a let from the Connecticut Department of Revenue Services every two years. The permit costs $100. To acquire a permit, yous must:

Be eighteen years of historic period, or older
Have a high school diploma
Possess a PTIN from the IRS, and
Present evidence that you have the experience, teaching, or training in tax preparation services

You apply for the permit online. Connecticut tax preparers must adhere to specified standards of conduct or confront a civil penalty of $500 for each violation. You can also accept your permit revoked. For more than details, run across Allow Requirements for Revenue enhancement Preparers and Facilitators.

African American tax preparer consulting with a African American businesswoman

Maryland

Maryland tax preparers must obtain a license from the Maryland Department of Labor, Licensing, & Regulation. To attain a license, you must:

Accept a high school diploma or GED
Obtain a PTIN from the IRS
Consummate 80 hours of taxation constabulary training courses, and
Pass a state competency exam

You need to renew your license every 2 years. To practice and then, you must complete 16 hours of continuing revenue enhancement education and retake the exam.

Nevada

Yous must register with the Nevada Secretarial assistant of Land to be a tax preparer in Nevada. Yous register equally a document preparation service. To register, you must pay a $50 fee and obtain a $50,000 surety bond or greenbacks bond. Yous must file these with the Secretary of State. Side by side, y'all must renew your license every twelvemonth. Registration takes place online.

New York

You lot must register with the New York Department of Taxation and Finance every twelvemonth to work as a tax preparer in New York state. To do and so, you lot must:

Be 18 years of age or older
Take a high schoolhouse diploma or GED
Certify you take met all child support obligations, and
Pay a $100 fee if you set 10 or more returns each year

You register online. You must also complete four hours of standing didactics each year. For more details, see Publication 58, Data for Income Tax Return Preparers.

Oregon

To work as a tax preparer in Oregon, you must obtain a license from the Oregon Board of Taxation Practitioners. To practise so, you must:

Take a high school diploma or GED
Obtain a PTIN from the IRS
Complete 80 hours of tax grooming courses with at least a 75% passing grade, and
Pass a competency examination

Y'all utilise online.

Should you lot enter the IRS filing season programme?

The IRS does non license tax return preparers or impose any educational or other requirements on them. Why? Because information technology'southward not legally authorized to do so. Just the IRS does have a voluntary registration programme: the Annual Filing Season Programme. To join this plan, yous must accept a PTIN and consummate eighteen hours of tax continuing education. This program includes a vi-hour federal tax law refresher course with the examination. After completing these requirements, you'll receive an Annual Filing Season Plan Record of Completion certification from the IRS. You lot'll also get listed in an IRS online database of tax preparers. This record is officially chosen the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. Being listed in the directory can assist you go business. In addition, Annual Filing Flavour Program participants have a express right to stand for their clients before the IRS. They may do so before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. For more than information, refer to the IRS Annual Filing Season Program spider web folio.