NEW TO TAXES?
Scroll down to view requirements in your state and the steps to start your own tax business.
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Whether you're new to tax preparation or have a little bit of knowledge,
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THE BENEFITS OF STARTING A TAX BUSINESS
Good Income: A tax preparer can set their own value based on experience.
Low Overhead: It’s relatively inexpensive to get started in the tax business. You will need to pay for licensing, a bond, registration, training, office supplies and software. You will find these expenses to be affordable as compared to other career start-ups. You can save even more money if you choose to work from home.
Flexible Hours: A tax preparer can decide how many clients they want to take on and when they want to work. While tax season is typically busy, it only lasts a few months of the year. You can spend the rest of the year vacationing, or you can learn other related skills such as bookkeeping and financial planning, to stay busy year-round.
Unlimited Growth Potential: Once you open a tax business, you can continue growing by marketing to more clients, and hiring other agents to work under you. You can also open new locations to bring in more income. You can branch out by offering additional services such as financial consulting, tax prep education, bookkeeping, accounting, and insurance.
Step 1: Choose Your Course to Learn Tax Preparation
There are currently 5 states which regulate individuals who prepare state-level tax returns.
Click a button to view your state requirements from where you will prepare taxes from.
California
Who is required to register with CTEC?
Any non-exempt tax preparer in California who, for a fee:
• Assists with or prepares state or federal income tax returns.
• Assumes final responsibility for such returns.
• Offers these services.
Click here for more information from CTEC.
Requirements to become a new CTEC registered tax preparer (CRTP):
• Complete a 60-hour qualifying education course from a CTEC approved provider within the past 18 months.
• Purchase a $5,000 tax preparer bond from an insurance/surety agent.
• Obtain a Preparer Tax Identification Number (PTIN) from the Internal Revenue Service (IRS).
• Register and submit the $33 registration fee online.
You must renew your registration with CTEC annually and pay the $33 annual registration before October 31 of each year, After October 31, the late fee is $55.
Beginning July 1, 2020, new CRTP applicants will be required to pass a criminal background check and must submit fingerprint images to CTEC to determine eligibility. If you register before July 1, 2020, this is not applicable.
Complete this course to satisfy CTEC requirements:
Maryland
Who is required to register with the Maryland Department of Labor?
Individuals who, for a fee, prepare federal and state tax returns for Marylanders are required to be registered by the Board. An individual must obtain this registration before soliciting or preparing tax returns.
Requirements to become a new Individual Tax Preparer:
• Have a high school diploma or GED.
• Obtain a PTIN from the IRS.
• Complete 80 hours of tax law training courses.
• Pass a state competency exam:
-The Maryland Examination is being administered by PSI Services LLC.
-Passing the examination is required before making application for registration.
-The cost of the Maryland Examination is $65. Click here for more information.
You must renew your registration every two years from date of issuance for a fee of $100. You must complete 16 hours of continuing tax education and retake the exam.
Click here to view an outline of the exam.
This course covers topics on the Maryland Exam for studying reference:
Oregon
Who is required to register with the Oregon Board of Tax Practitioners?
A tax preparer license enables a person to lawfully prepare personal income tax returns in the State of Oregon. A tax preparer must work under the supervision of a licensed tax consultant, a certified public accountant, a public accountant, or an attorney who prepares tax returns for their clients. A tax preparer is an apprenticeship level for preparing personal income taxes.
Click here for more information from the Oregon Board of Tax Practitioners.
Requirements to become a new Tax Preparer:
• Be at least 18 years old
• Possess a high school or general equivalency diploma (GED)
• Complete an 80-hour basic tax course
- College coursework may be approved in lieu of the 80-hour basic tax course requirement.
• Pass the tax preparer examination administered by the Oregon Board
• Receive and submit your "Session Attendance Certification Form” (Certificate of Completion) to the Oregon Board office with your license application
Preparer licenses expire on September 30 annually. CE is acceptable from September 1 of the previous year to September 30 of the current renewal year, 13 months. You must renew your registration every year for a fee of $80. Renewals are required to complete 30 hours of continuing education related to tax law and tax preparation per year, at least two hours of which must be related to ethics or professional conduct.
We recommend getting started with these courses:
Connecticut
Who is required to register with the Connecticut State Department of Revenue Services?
Paid tax preparers who prepare more than 10 Connecticut income tax returns or more than 10 federal income tax returns for Connecticut clients, or a combination of both, or who facilitate refund anticipation loans or refund anticipation checks, must obtain a permit issued by the Department of Revenue Services (DRS).
Click here for more information from the Connecticut State Department of Revenue Services.
Requirements to become a new Tax Preparer:
• Be at least 18 years old.
• Have a high school diploma
• Must obtain a PTIN from the IRS.
• $100 registration application fee.
• Present evidence that you have experience, education, or training in tax preparation services.
-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.
You must renew your registration every two years for a fee of $50.
This course will fulfill state requirements:
New York
Who is required to register with the New York State Tax Department?
You must register if you will be paid to prepare one or more New York State tax returns or reports; or will facilitate a refund anticipation loan (RAL) or refund anticipation check (RAC).
Requirements to become a new Tax Preparer:
• Be at least 18 years old.
• Have a high school diploma
• Must obtain a PTIN from the IRS.
• $100 registration application fee.
• You must complete the Tax Department’s free online continuing education courses as a commercial tax return preparer. Click here for more information.
You must renew your registration every year for a fee of $100.
We recommend this course to help you learn the basics:
Other State
If your state was not listed, there are no requirements to become a tax preparer.
Our recommendation if you are new to tax preparation would be for you to complete the Annual Filing Season Program. This is optional.
The Annual Filing Season Program aims to recognize the efforts of non-credentialed return preparers who aspire to a higher level of professionalism. Those who choose to participate can meet the requirements by obtaining 18 hours of continuing education, including a six hour federal tax law refresher course with test. The return preparer must also renew their preparer tax identification number (PTIN) for the upcoming year and consent to adhere to the obligations in Circular 230, Subpart B and section 10.51.
Upon completion of these requirements, the return preparer receives an Annual Filing Season Program – Record of Completion from the IRS.
Click here for more information.
To obtain an AFSP record of completion:
• Take 18 hours of continuing education from IRS-Approved CE Providers, including:
-a six (6) hour Annual Federal Tax Refresher (AFTR) course that covers filing season issues and tax law updates, as well as a knowledge-based comprehension test administered at the end of the course by the CE Provider;
-ten (10) hours of other federal tax law topics; and
-two (2) hours of ethics.
• Have an active preparer tax identification number (PTIN).
• Consent to adhere to specific practice obligations outlined in Subpart B and section 10.51 of Treasury Department Circular No. 230.
If you only want to learn the basic of tax preparation and not participate in the AFSP, we recommend you complete our Tax Preparation Course listed below.
Recommend courses:
Step 2: Apply for an Electronic Filing Identification Number
Not all tax preparers need an EFIN. If you are a tax preparer building your own business, you must secure an EFIN for your practice to file electronically.
If you plan on working in an existing tax preparation company, you do not need to take any of the following steps. Complete your education and consult with the company for any additional requirements they may request from you.
Electronic filing tax returns can help you process the client's return faster with the IRS, this will also process the refund faster than mailing in documents. To become an Authorized e-file Provider, you need to apply for an Electronic Filing Identification Number (EFIN).
An EFIN is assigned by the IRS to identify the firms that have completed the e-File application. An EFIN is required to file tax returns electronically.
The IRS will typically take about 45 days to process your EFIN application.
Getting Started
Before you begin the online e-file application, you must have an IRS e-services account, which facilitates electronic interaction with the IRS. All e-Services users must register using a two-factor authentication process called Secure Access. Here's what you need to get started:
• A readily available email address;
• Your Social Security number;
• Your filing status and address from your last-filed tax return;
• Your personal account number from a:
- credit card, or
- home mortgage loan, or
- home equity (second mortgage) loan, or
- home equity line of credit (HELOC), or
- car loan
* (The IRS does not retain this data)
• A readily available mobile device. For instant access, your name must be associated with a U.S-based mobile phone capable of receiving text messages. If the mobile number cannot be linked to your name, you may opt for a mailed activation code during registration.
Before starting the identity proofing process, you should review Secure Access: How to Register for Certain Online Self-Help Tools to learn what you will need to complete the process and how the process will work.
The application process:
• First, you will supply identification information for your firm
• Next, you will enter information about each Principal and Responsible Official in your organization
• You choose your e-file provider option. If you are a return preparer and want to e-file for clients, select electronic return originator, or ERO.
• If the Principal or Responsible Official is someone who is certified or licensed, such as an attorney, CPA or enrolled agent, they must enter current professional status information.
• All other individuals need to provide fingerprints to the IRS. You can get a fingerprint card by calling 866-255-0654.
• Be fingerprinted by a trained professional - your local police station will likely provide this service for a modest fee or there are commercial services. Then mail the signed and completed card to the IRS at:
310 LOWELL ST STOP 983
EFU ACCEPTANCE TESTING
ANDOVER MA 01810-5430
After you submit your application and related documents:
The IRS will conduct a suitability check on the firm and each person listed on your application as either a principal or responsible official. This may include: a credit check; a tax compliance check; a criminal background check; and a check for prior non-compliance with IRS e-file requirements. Once approved, you will get an acceptance letter from the IRS with your Electronic Filing Identification Number (EFIN).
Step 3: Purchase Tax Software
Once you have your EFIN, you can connect your tax software to file electronically. This is for tax preparers who will be starting their own tax preparation business. If you plan on working for an existing company, commonly they will already have tax software for you to work with.
There are many options to choose for tax software.
Latino Tax Pro's preferred provider Drake Software is loaded with features to help you quickly and efficiently prepare and process your customers’ returns. So you can stay focused on the important stuff — working with clients and building your business. Click here to learn more about Drake Software and get a free trial.
Other software options:
Not sure where to get started? Check out our VIP Membership.
This is a great option during tax season if you're just getting started and need help. A benefit to our VIP Membership is the Ask a Tax Pro feature. You will receive access to ask an unlimited amount of 1040 questions to our Enrolled Agents on staff with a 24-48 hour response time. View all the benefits here.
Along with the membership you will receive an exclusive VIP member offer from ProTaxPro tax software.
Receive 50 FREE 1040 tax returns with proTaxPro software.
This package features a 50 unit federal and state returns, free e-filing, and free printing in a convenient, secure, and cloud-based environment with no bulky downloads or updates.
Need more returns? Ask about their unlimited 1040 only package! Receive a special discount when you mention you're a VIP member.
Contact ProTaxPro at (805) 256-1791 or visit ProTaxPro.com
Step 4: Start Marketing Your Tax Business
You've done it! You've set up your very own tax business and now it's time to start marketing.
Reach out to friends & family
The best way to get your business off the ground is by reaching out to your personal network of friends and family. Not only will they be some of your most loyal customers, but they'll also be your biggest advocates when it comes to referring new clients. Once you've established a solid client base with friends and family, you can start branching out into other areas of marketing.
Network with local small business groups
It's important to think outside the box and explore all of your options. There are plenty of other groups and organizations that can help get the word out. Local networking groups like your chamber of commerce or small business advocacy groups. These groups can provide valuable resources and introduce you to other businesses in your community. You may also want to consider going door-to-door to introduce yourself and your business. This personal touch can leave a lasting impression and help you stand out from the competition. With a little effort, you can ensure that your new business gets off to a great start.
Digital marketing
There's no doubt that digital marketing is one of the most effective ways to reach new customers and grow your business. But with so many options out there, it can be tough to know where to start.
One of the best ways to get started is by using social media platforms like Facebook and Instagram. Make sure you're regularly posting about your services and offering helpful tax tips. It's also important to have an attractive and up-to-date Google Business Profile. Take the time to fill out your information thoroughly and add some great photos. And don't forget to ask your happy customers to leave reviews!
Paid advertising can also be a great way to reach more people. By running targeted ads, you can make sure that your message is reaching the right people at the right time. Investing in digital marketing is a smart move for any business owner who wants to stay competitive and reach a wide range of customers.
All this can seem like an overwhelming amount of steps but you're at the right place! Latino Tax Pro can help you with digital marketing through Facebook and Google. Click here to learn more!
Set up your website
A website is the foundation of any good digital marketing strategy. It's the first place potential clients will go to learn more about you and your business. Make sure your website is well-designed, easy to navigate, and includes all the information potential clients need to know about your services.
A client management portal is an essential tool for staying organized and ensuring that all your digital marketing leads to a central page where potential clients can book appointments or request more information. Client portals can also automate texts or emails with confirmations and appointment information, freeing up your time to focus on your tax appointments. Investing in a website with a client management portal is an essential step for any business serious about growing its client base. Need more information on client management software? Click here to check out our Marketplace.