Know What You Need To Become A Tax Preparer

Know What you Need to Become a Tax Preparer

To some people, the idea of needing to take care of their yearly taxes is a nightmare. The very thought of sifting through receipts, filling out forms, and tabulating numbers is enough to make their head spin. Alternatively, there is a small group of people in the world who actually enjoy filing their own tax work, and find it to be relaxing. In fact, for these people doing tax work might even be a dream job. Fortunately, it’s perfectly possible to get started in such a business if you are such an individual, but there are many differences that come along with doing taxes as an occupation compared to doing them for one’s self.

First of all, you’ll need to get a PTIN. A PTIN, or Preparer’s Tax Identification Number, is a unique set of digits that all paid tax return preparers must use on U.S. federal tax returns submitted to the Internal Revenue Service. While getting a PTIN is not expensive, unless you’re an Attorney, CPA, or Enrolled Agent, you will have to pass the Registered Tax Return Preparer Competency Test before you can even begin to prepare tax returns. It is important to have a PTIN account before you try to schedule a session to take the Registered Tax Return Preparer Competency Test. Otherwise, the IRS is capable of denying you access to the exam.

Next, you’ll need an EFIN, or Electronic Filing Identification Number. Like the PTIN, this is a number assigned by the IRS so that the individual has access to electronic tax services. It also authorizes the user to electronically file tax returns for multiple other people. Unlike the PTIN there is no cost, but the application process will require you to submit your fingerprints and agree to a background check. Together, these two numbers – along with the proper equipment and software – are essential to beginning your own tax preparation services.

Have you ever filed for a PTIN or EFIN? If so, how long did it take and did you encounter any issues along
the way?

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