Tax preparers offer a range of services beyond basic tax form

preparation and filing. They can also provide representation for

taxpayers in IRS audits and tax court cases, depending on their

credentials and representation rights. Tax preparers must balance

their obligation to their clients with their responsibility to comply

with tax laws and regulations. They must avoid any actions that could result in filing a fraudulent return or breaking the law.

As a new tax preparer, it's important to learn the ins and outs of the business means and acquire an entirely new profession. Certification can help, but finding a platform that can help you accomplished the know-how and assist you with knowledge gaps is critical to your success. With Tax on Clouds platform, you can gain the knowledge and skills you need to excel in the tax preparation industry.

Outstanding technology is essential for any business to succeed, and our tax professional software can provide the necessary tools and expertise to work efficiently. With Tax On Clouds software, you can streamline your work and achieve success in your business.

Great tax preparation services are essential for individuals and businesses alike. Attracting clients is key to building a successful and profitable business. Starting with individual returns and gradually moving on to more complex matters is a smart way to grow your business and establish a reputation in the industry.

For those who are new to tax preparation, it's a great idea to work for an established tax prep service for a short period. This can offer valuable experience and knowledge about state and local requirements, and it's a smart way to gain confidence and ask questions before starting your own business.

 

What do you need to become a tax preparer?

Becoming a tax preparer is a simple process that requires a few basic requirements. These requirements may vary depending on your state.

Create your PTIN
Anyone who prepares tax returns and charges a fee for their services is required to have a Preparer Tax Identification Number (PTIN). There aren’t any educational requirements to get your PTIN. You can create one online on the IRS website. The process only takes about 15 minutes. You can also apply for a PTIN by completing and mailing Form W-12.

​Apply for an EFIN
If you intend to file tax returns electronically, it is mandatory to have an Electronic Filing Identification Number (EFIN) as per the IRS regulations. However, if you are not a certified licensed professional, such as an attorney, you will also need to submit fingerprints to the IRS. It is advisable to apply in advance as the process typically takes around 45 days. You can conveniently apply for an EFIN by clicking the following link: official IRS website.
 

Register with your state
Before starting your tax preparation business, make sure to check your state's requirements for registration. Each state has different regulations, so knowing what's required in your area before accepting clients is important. Take the time to research and ensure that you comply with all necessary regulations.

 

Tax Preparer Regulations By State

 

California State Registration: Yes.

• Annual Registration – $33

• Must complete online application for New Preparers at CTEC website

• Must pass a background check and fingerprinting procedure (Live Scan)

• Must possess and maintain IRS PTIN and a $5,000 tax preparer bond

• Must register with CTEC within 18 months of completion date on Qualifying Education certificate of completion

• Renew registration with CTEC by October 31st each year

• State Exam: None

Qualifying Education (QE): Yes

• 60-hour qualifying tax course (45 federal, 15 state) from CTEC Approve Provider​Continuing Education (CE): Yes

• Annual – 20 hours of CE from CTEC Approved Provider: Including 10 hours federal tax law, 3 hours federal tax law update, 2 hours Ethics, and 5 hours state tax law

 

Connecticut State Registration: Yes

• $100 registration application fee + $50 renewal fees every two years

• Must be 18+ years of age and possess high school diploma

• As of January 1, 2022, a certificate of completion of the annual filing season program administered by the IRS will be required in order to receive a permit. For more information, click here.

• State Exam: No

• Qualifying Education: No

• Must present evidence that you have experience, education, or training in tax preparation services.

• Continuing Education: No

Iowa State Registration: No

• Tax return preparers must have an IRS PTIN and include it on all Iowa tax returns they prepare, regardless of the year of the return. Violators of this provision will incur a $50 civil penalty for each violation (not to exceed $25,000 in any calendar year).

State Exam: No

Qualifying Education: No

Continuing Education: Yes

• Annual – 15 hours, at least 2 hours must pertain to professional ethics, the remainder must relate to income tax

• CE must be taken by an IRS approved provider, and pertain to ethics or income tax

• Register for Federal CE

• More info

Maryland State Registration: Yes

• $100 Bi-annual registration from date of issuance

• Must possess and maintain IRS PTIN and must submit copy of IRS PTIN Confirmation Certificate to the Board prior to beginning of each tax year

• More info

       State Exam: Yes

• $65 fee

• No test required if you are: an actively licensed CPA, IRS Enrolled Agent, attorney in good standing, or employee of state, local and federal government who performs tax return services in accordance with their official duties

• Pass score = 70%+

Qualifying Education: No

Continuing Education: Yes

• Bi-annual – 16 hours

• Four of the 16 hours must be in Maryland State tax-related subjects

• Two of the four Maryland hours may be satisfied by a federal or state course in ethics

• Register for Federal CE

• More info

 

New York State Registration: Yes

• Annual – For every calendar year in which you will be paid to prepare one or more NY State tax return(s) or report(s); Or… will facilitate a refund anticipation loan (RAL) or refund anticipation check (RAC)

• Must be 18 years of age, and possess high school diploma or equivalent

• More info

State Exam: No

• No test currently. However, when a competency exam becomes available, you have three years to complete/pass it

Qualifying Education: If you have less than three years of experience preparing New York State tax returns, complete a 16-hour basic tax course

Continuing Education: Yes

• Annual – hours vary, but a minimum of 4 hours

• Note: if you complete the IRS AFSP for tax preparers, you cannot credit it toward your required NY State CE hours

• Register for Federal CE

• More info

 

Oregon State Registration: Yes

• Initial License: $60/Preparer, $65/Active LTP Consultant, $95 all others

• Renewal License: Active Status: $80/Preparer, $95/Consultant

• Combination License – Initial License + New Business Registration: $110/Preparer, $125/Active LTP Consultant

• Other fees apply if inactive or need to reactivate license

• Must be at least 18 years old, possess high school or equivalent, and possess and maintain an IRS PTIN

• Must receive and submit your “Session Attendance Certification Form” (Certificate of Completion) to the Oregon Board office with your license application

• More info

       State Exam: Yes

• Exam fee: $60 for Preparers and Consultants, plus

• Proctor fees: $50/Preparer, $85/Consultant

• Pass score = 75%+

Qualifying Education: Yes

• 80-hour basic tax course from OBTP Approved Provider

• Certificate of completion of course must be submitted with license application before license will be issued

Continuing Education: Yes

• Annual – 30 hours

• CE must be related to tax law and tax preparation

• At least two hours must be related to ethics or professional conduct

• CE must be completed during 13 months prior to each license year

• Same class may not be counted toward two different renewals

• Renewal fees: $80/Preparer, $95/Consultant

• Register for Federal CE

• More info

Work at an office
For those who are new to tax preparation, it's a great idea to work for an established tax prep service for a short period. This can offer valuable experience and knowledge about state and local requirements, and it's a smart way to gain confidence and ask questions before starting your own business.

​Choose a tax prep software
Choosing the appropriate tax preparation software can significantly impact the success of your tax preparation business. It is crucial to assess your specific needs before deciding. Consider factors such as the level of support and tax filing assistance provided, the availability of cloud-based software, and the potential for revenue growth as you gain experience. Tax on Clouds is a user-friendly tax preparation software that caters to tax preparers of all educational and experiential backgrounds. Schedule a demo of our software today to discover how we can help you streamline your tax preparation process. For Demo, Click Here

TAX ON CLOUDS PRO
Tax on Clouds Pro is the ultimate Cloud Tax software for tax professionals and service bureaus. Our software is designed to simplify your tax preparation process and help you save time and money. With Tax on Clouds Pro, you can easily manage your customer's tax returns and stay up-to-date with the latest tax laws and regulations. Try our software today and experience the difference!

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Our tax preparation software, Tax On Clouds Pro, offers a comprehensive solution for filing your customers' taxes with ease. Our platform provides a range of resources, including instructional videos and step-by-step guidance, to ensure that your clients receive the maximum refund possible. Trust Tax On Clouds Pro to simplify the tax preparation process and help you achieve your financial goals.