How to Become a Certified and Professional Tax Preparer- A Step-by-Step Guide

How to Be a Licensed Tax Preparer

Becoming a licensed tax preparer is a rewarding career choice for those who have a keen interest in finance, accounting, and helping others. The process of obtaining a license can be complex, but with the right steps and guidance, you can successfully become a qualified tax preparer. In this article, we will discuss the essential steps to become a licensed tax preparer in the United States.

1. Understand the Requirements

The first step in becoming a licensed tax preparer is to understand the requirements set by the Internal Revenue Service (IRS). The IRS offers two types of tax preparer licenses: the IRS Annual Filing Season Program (AFSP) and the IRS Enrolled Agent (EA) designation. The AFSP is a basic license, while the EA is a more advanced and comprehensive designation.

2. Complete the Required Education

For the AFSP license, you must complete a minimum of 14 hours of tax law and ethics education. For the EA designation, you must have a background in accounting, finance, or a related field, or you must complete a special enrollment examination. The education requirements vary depending on the license you choose.

3. Pass the Tax Preparer Examination

Once you have completed the required education, you must pass the IRS tax preparer examination. The examination covers tax law, ethics, and tax preparation procedures. The exam is offered through IRS-approved testing centers, and you must register and pay the examination fee.

4. Obtain Filing Season Filing Program (AFSP) Certification

For the AFSP license, you must complete the required education and pass the examination. After passing the exam, you must obtain AFSP certification by registering with the IRS and paying the certification fee. This certification is valid for one year and must be renewed annually.

5. Apply for the Enrolled Agent (EA) Designation

For the EA designation, you must pass the Special Enrollment Examination (SEE) or have a qualifying educational background. After passing the exam or meeting the educational requirements, you must apply for the EA designation by submitting an application to the IRS and paying the application fee.

6. Maintain Continuing Education Requirements

Both the AFSP and EA designations require you to complete continuing education (CE) to maintain your license. The CE requirements vary depending on the license, but you must complete the required number of hours each year to stay up-to-date with tax laws and regulations.

7. Build a Reputation

Once you have obtained your license, it is essential to build a reputation as a reliable and knowledgeable tax preparer. Offer quality services, maintain accurate records, and stay informed about tax laws and regulations. Word of mouth and positive reviews can help you attract new clients and grow your business.

In conclusion, becoming a licensed tax preparer requires dedication, education, and a commitment to staying informed about tax laws. By following these steps, you can successfully obtain your license and start a rewarding career in tax preparation.