Becoming a tax preparer isn’t generally as difficult as you might be imagining. However, for all you folks living in Los Angeles, there is one step that is decidedly trickier than if you lived in almost any other state. Don’t worry though, we are here to guide you through the entire 6-step process.
Are you ready to get into the details? We sure are! Let’s not waste any more time then.
Become a Tax Preparer in Los Angeles: The Step-by-Step Guide
Step 1. Complete Education
Since you are in California, you will have to book yourself onto a 60-hour qualifying education course.
To do this, make sure you go to a CTEC’s (California Tax Education Council) approved education provider to ensure you are participating in the right training.
In Los Angeles (and indeed, the state of California), you do not need to register with the CTEC if you fit into one of the following categories:
- You’re a CPA (California Certified Public Accountant)
- You’re an EA (enrolled agent)
- You are a member of the California State Bar
- You work at certain banking or trust companies
Step 2. Apply For Your PTIN
You must have a PTIN (Preparer Tax Identification Number) to be a credible, professional tax preparer. It’s a relatively simple and free process.
To receive this number, either navigate to the IRS website or fill out Form W-12. Just make sure you meet the following requirements before you do so:
- You are over 18 years old
- You provide your address
- You give your Social Security number
- You properly explain any felonies
- If you owe money to the IRS, you explain this on the form too
This number will be used to identify you as a paid preparer in Los Angeles when you complete tax returns for your clients.
Step 3. Get Your EFIN
For those of you who are wanting to file tax returns digitally or are looking to work for yourself, you must obtain an Electronic Filing Identification Number (EFIN).
The process involves filling out an online form and then supplying your fingerprints. It can take up to 45 days for you to receive your EFIN.
To get your EFIN, follow these steps:
- Create an e-services account on the IRS website. Here, you will have to provide your Social Security Number, filing status, email address, personal account number from a card or such, and a mobile device.
- Send in your application. This bit is quite tricky but that won’t stop you if you are becoming a professional tax preparer in Los Angeles for the right reasons!
- Pass the check. Once you’ve supplied all the required information in the aforementioned steps, the IRS will assess your suitability. Criminal background, previous non-compliance with IRS regulations, tax compliance, and a credit check with be conducted.
Step 4. Obtain a Bond
In California, you have to acquire a tax preparer bond of $5,000 before you can register. So, find an insurance agency or surety firm that suits you and acquire one ahead of time.
Step 5. Register in California
Now, this is the part where you feel like it all comes together (finally). You get to register as a professional tax preparer in Lost Angeles!
You must do this within 18 months from the completion of your 60-hour qualifying course. Plus, there is a $33 registration fee when you fill in all your information on the CTEC website.
Optionally, you can work with a business plan consultant that can help you with your business plan.
Step 6. Renew Your Registration Annually
Since you reside in the state of California, you must renew your registration each year. This means you will have to do the following:
- Do 20 hours of CTEC provided training (15 hours federal tax curriculum, 5 hours California)
- Renew your PTIN
- Always have a $5,000 preparer bond
- Pay $33 before October 31 every year
And there you have it! You are now a professional tax preparer.
