How to become a tax preparer

how to become a tax preparer


Best Answer: You will need to do a couple of important things to be able to prepare income taxes in California. Much of it can be done online.

1. You must complete a 60-hour qualifying education course approved by the California Tax Education Council (CTEC). Courses are taught by many schools throughout California. You can take one starting in early September at one of the national chains like H&R Block or Liberty Tax. These in-person courses run for about 10 weeks and usually meet twice a week for 3 hours each night. Alternatively, there are online tax schools that offer these courses. offers a 60-hour course approved by CTEC. It starts any time and can be done at your own pace. If you choose an online tax school, make sure it is approved by CTEC or else it won't count. You can find a list of approved schools on the CTEC website at

2. You must obtain a $5,000 tax preparer bond. These bonds are available in periods from one to four years and usually cost less than $100. Your insurance agent may have information about bonds. has information about obtaining a bond on the website.

3. You must pay a $26 registration fee to CTEC. Once you complete your course, the school you attend should upload your information electronically. Visit the CTEC website and complete the new tax preparer application. You can pay your fee via credit card and obtain a CTEC number right away. (Make sure you have your bond information before you apply.)

4. The IRS requires that you apply for a Preparer Tax Identification Number (PTIN). You can visit the IRS website and enter PTIN to find the application online. There is a fee to register a new PTIN. It's currently $64.25. The IRS will send your PTIN by mail a few weeks after you apply.

Soon the IRS will begin requiring tax preparers to take continuing education courses each year to stay current with tax law. Currently CTEC required tax preparers in California to obtain 20 hours of continuing education each year.

The IRS will

also require new tax preparers to take a competency exam. The details of this exam have not (to my knowledge) been made public yet. There's a good chance that the courses offered by any of the tax schools will prepare you for the exam.

I suspect that the exam will be administered by one of the IRS vendors that offers the enrolled agent exam. If that's the case, then you may have to travel to a testing center near you. Depending on where you live, you might have one in your city or you may have to travel an hour or two. They try to have them in major cities. If the tax preparer exam is anything like the enrolled agent exam, it will take several hours to complete the exam.

It's important that you understand that in California, you must comply with BOTH the CTEC AND IRS regulations. There are no current plans to suspend CTEC rules in light of the new IRS regulations, so for the time being, you must comply with both sets of regulations.

You can learn more about the regulations at the CTEC and IRS websites.

In addition to these basic requirements, you may want to consider obtaining an e-File Identification Number (EFIN). If you go to work for a company like H&R Block, you won't need to get one, but you will if you work for yourself. An EFIN lets you transmit tax returns electronically.

To apply for an EFIN, you will need to complete an application online at the IRS website. To do this, you must first create an IRS e-services account. The instructions are online. You will need to be fingerprinted (at your expense) and will be subject to a background check. This process can take several weeks, so make sure you get started early. I would begin working on your PTIN and EFIN during the summer - at the same time you start your class. If you start everything in the summer, you should have no problems being ready by the start of next tax season.

I hope that helps! Good luck!



Category: Taxes

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