Overview

Tax season is a dreaded time for many taxpayers. For someone who doesn’t know all the ins and outs of tax law, filing a tax return can be a daunting task. And with all the credits, deductions, forms, and yearly updates, it can all be quite overwhelming. This is why we have professional tax preparers. If you have what it takes, you can put some extra cash in your pocket during tax season as a preparer. Texas is full of resources to help you become a tax preparer even if you have no prior experience.

Steps to become a Tax Preparer in Texas

Step 1: Get the training

You don’t need to be a genius to prepare tax returns. And don’t need a college degree. However, you should have a high school diploma or GED. Moreover, you don’t necessarily need an extensive background in accounting. Most non-credentialed tax preparers handle returns for individuals, which are usually routine. Nevertheless, you still need training so you can competently prepare tax returns for others. The less background you have in tax and accounting, the more training you’ll need. If you intend to specialize in taxes for individuals, you’ll need less schooling than if you deal with business taxes. There are many tax training resources:

Your local community college may offer courses.
National tax preparation firms like H & R Block, Liberty Tax Service, and Jackson Hewitt Tax Services all provide training courses, often at low cost.
Some tax preparation companies offer on-the-job training.
Many private training companies and technical colleges offer courses.
The Accreditation Council for Accountancy and Taxation (ACAT) and the National Association of Tax Professionals both present training courses. The ACAT offers an Accredited Tax Preparer credential to those who complete its courses and pass an exam. Credentials are not required to be a tax preparer but can help you get hired or paid more.
You can access a comprehensive list of tax training resources from the IRS website.

Step 2: Get your PTIN from the IRS

Anyone who prepares federal tax returns for money must have a valid Preparer Tax Identification Number (PTIN). You obtain it from the IRS. Getting a PTIN registers you as an “unenrolled preparer,” granting you the minimum level of clearance to prepare federal taxes. You use the PTIN to identify yourself as a paid preparer in the returns you draw up for your clients. You can obtain your PTIN online, and it’s free. To get a PTIN, you must

Be at least 18 years old
Provide your address
Provide your Social Security number
Explain any felony convictions, and
Explain if you owe money to the IRS
There are no other requirements. But, if you have felony convictions or owe money to the IRS, it might hold up your PTIN.

Step 3: Get your EFIN from the IRS

If you intend to work as a tax preparer on your own, you need to obtain an Electronic Filing Identification Number (EFIN) from the IRS. You’ll need this number to e-file returns for your clients. Any tax preparer who prepares 11 or more tax returns a year, must e-file the returns. To obtain an EFIN, you must:

Create an IRS e-services Account
Submit an IRS online e-file application, and
Pass a Suitability Check

Obtaining an EFIN is free. But you may have to get fingerprinted, which can cost about $50. The IRS doesn’t want to give criminals EFINs. So it may check your credit history and criminal record. It will also check to see if you owe the IRS money.

Step 4: Comply with state licensing requirements for non-credentialed tax preparers

There are no licenses or certifications required to become a tax preparer in Texas, but the IRS requires that every paid preparer have a PTIN. This or your Social Security Number must be entered to identify you as the preparer on each return that you prepare. A PTIN can be requested for free by visiting the IRS website. No license is required for tax preparers in Texas, which is consistent with the laws in most U.S. states. Still, many tax preparers opt to receive some kind of training so that they can provide the best service to their clients. Many national tax preparation companies offer free or low-cost training to those interested in becoming tax preparers. In fact, the training program offered by one major tax preparation company requires only 60 hours of instruction in most states. Some vocational schools also offer training, but you may want to compare the cost of these programs to those provided free by tax-preparation companies.

Tax preparation companies provide free training, so they can recruit new preparers each tax season. Completing a training program is not an offer or guarantee of employment: If you decide you want to work for the company, you’ll still need to complete an application and undergo an interview process.

Before you can begin preparing tax returns, you’ll need to obtain a preparer tax identification number (PTIN) from the IRS. You can do this online, and no fee is involved. In addition, the IRS provides training courses and continuing education programs for tax preparers. In fact, if you would like to get some real-world practice in tax preparation before going professional, you can contact social service agencies in your area to learn about becoming a volunteer tax preparer for people in your community.