Tax preparation is a promising career that is continually on the rise. It is a career that offers an essential service to the community. However, the question is, how does one become a tax preparer? What are the requirements to become a tax preparer? What are the types of tools you require to increase productivity? What are the services of a tax preparer?
What is the Duty of a Tax Preparer?
The tax preparer bears the burden of preparing, filing, and assisting in the general tax forms. Nonetheless, the tax preparer can also assist in other duties like defending the taxpayer with the IRS (this includes tax and audits court issues). However, the extent of their interference is dependent on many factors. The factors include:
- Their credentials
- The availability of representation rights
Tax preparers have an obligation to the IRS as well as their clients. The IRS has to ensure that businesses run following federal and state tax codes. On the other hand, they also try to minimize the burden of tax on the client.
Even though you can hire a tax preparer privately, the tax preparer must also remember his or her obligation to the IRS. They must ensure that every information the client files is correct and free from all forms of tax falsifications. He/she must not be a part of filing false returns.
Things You Need to Become a Tax Preparer
There are a few essential requirements for becoming a tax preparer. They include:
As a new applicant, it is vital to learn the ins and outs of the profession. Becoming a tax preparer is like taking up an entirely new career with its unique language. However, to grow in your career as a tax preparer, you need to find the appropriate platform that will boost your knowledge.
The Right Technology
The correct tools contribute to your growth generally and success in any field you find yourself in. Therefore, for success as a tax preparer, you require the right tax professional software.
The right software will help you put your knowledge to practice and provide you with the right tools to accomplish the task before you.
The Right Clients
The truth is, your success as a tax preparer is depends on your ability to attract the right clients. Many tax preparers usually start small, working on individual tax returns. As they grow in the field and become professional, they take on more tasks.
Steps to Becoming a Tax Preparer in Texas
Apply For PTIN
The first step to becoming a tax preparer, the first step is to apply for a Preparer Tax Identification Number (PTIN).
You can apply for your PTIN on the IRS website. The PTIN is the starting point for any tax preparer who wish to work in Texas. The PTIN requires yearly renewal, which is free. The initial registration is also free and does not require the applicant to pay any registration fee. Once you successfully receive your PTIN, the law requires you to put it on all tax returns you prepare. For more information and tips on how to get your PTIN, you can visit the IRS website.
Apply For EFIN
To get an EFIN (Electronic Filing Identification Number), you need to submit your PTIN and a copy of your fingerprint to the IRS website. You can find more information about the process on the website. The e-filling system is compulsory for tax preparers who file over ten returns in a year.
Once the EFIN is issued, it does not expire. However, if your EIN or the name of your firm changes, you will have to get a new EFIN or update your information via the online portal.
It is essential to note that every tax preparer requires a PTIN, but only your firm needs an EFIN. Each firm or physical location requires only one EFIN.
Three Steps To Get Your EFIN
Note that it can take up to 45 days to get approval for your e-file from the IRS. Below are the three steps to apply for your EFIN.
- Go to the IRS website and create an IRS e-service account
- Complete the application and wait for approval. Provide identification information of your firm and information about the key officers in your firm and your e-file provider option
- Pass the suitability test to qualify for EFIN
Do You Require a License to Work As a Tax Preparer in Texas?
While some states require you to get a license as task preparers, Texas does not require a license. The PTIN is enough to qualify you to work as a tax preparer in the state. Nonetheless, if you want to obtain representation rights, you have to enroll as an agent, attorney, or CPA.
The duty of a tax preparer is one that serves the community, and most people welcome it. Therefore, your choice to become a tax preparer is a thoughtful one.