How To Become a Tax Preparer Online | Online Courses & Certifications

Workers and other busy individuals can benefit from becoming a tax preparer fully online. Flexible online programs allow aspiring tax professionals to study at their own pace. Those interested in learning how to become a tax preparer should expect to learn about:

• tax laws and regulations
• income types
• bookkeeping
• deductions and credits

While you don't need a formal degree to become a tax preparer, you can consider tax preparer classes and degree programs to earn credentials for this role. You may also be required to get a tax preparer certification. Before beginning this career, you must follow all the education requirements from the Internal Revenue Service (IRS).

Steps To Become a Tax Preparer Online

According to the Bureau of Labor Statistics, employment of tax preparers is expected to grow 5.6% by 2028. This figure is above average compared to other careers and shows the need for individuals with professional tax preparation knowledge.

You must follow several steps before becoming a tax preparer, such as getting a preparer tax identification number and gaining hands-on experience. In addition, completing a training program or course can help you acquire the necessary knowledge and skills to succeed.

Here are the steps to becoming a tax preparer online.

1. Obtain a High School Diploma or GED

One of the basic requirements of becoming a tax preparer is obtaining a high school diploma or a General Educational Development (GED) certificate. A high school diploma requires students to complete all necessary coursework and achieve a minimum GPA to graduate.

A GED requires individuals to find a local or online testing center and register for the certification test. You can prepare for this exam by studying these four subjects:

• language arts
• math
• social studies
• science

2. Research State and Federal Requirements

Aspiring tax preparers should review the federal and state requirements. Some federal requirements for tax preparers include:

• Preparer Tax Identification Number (PTIN): All tax preparers must obtain a PTIN from the IRS to prepare federal income tax returns.
• E-file Authorization: If a preparer wants to e-file tax returns, they must register with the IRS as an e-file provider.
• Continuing Education: While not mandatory for all preparers, those who are certified or enrolled agents may need to complete continuing education courses to maintain their credentials.

State requirements generally include licensing criteria, registration with the state's tax authority, and ongoing education to keep their license active. Make sure to comply with your state's specific tax laws and regulations.

3. Complete an Online Tax Preparation Course

Free online income tax preparation courses can help you learn the fundamentals of preparing an individual tax return. Foundational tax knowledge is significant because it helps you understand how to accurately assess clients' financial situations and identify applicable deductions and credits.

Tax training courses also teach students about various federal and state tax laws that must be followed during the tax return preparation process. Busy individuals should consider enrolling in a self-paced tax course.

4. Obtain Your Preparer Tax Identification Number (PTIN)

Only tax professionals with an IRS Preparer Tax Identification Number, or PTIN, can prepare federal tax returns. While various skills and education are important for tax preparers, they must also have a PTIN issued by the IRS to work in this role.

You must visit the IRS website to apply for a PTIN. Before applying, ensure you have gathered all required documentation, such as your Social Security number, last year's tax return, and professional credentials.

5. Consider Getting an IRS Voluntary Annual Filing Season Program (AFSP) Certification

Aspiring tax preparers are encouraged to complete a voluntary Annual Filing Season Program Record of Completion. This program requires participants to complete 18 hours of continuing education, which includes a six-hour federal tax law refresher course with a test.

Those who have passed the Registered Tax Return Preparer test don't need to complete the six-hour federal tax law refresher course or test and only need 15 hours of continuing education. One of the benefits of earning this credential is that the IRS will encourage taxpayers to choose tax preparers with this certification to help them file their taxes.

6. Gain Hands-On Experience

Gaining hands-on experience is just as important as earning an education. Seek internships at accounting firms, tax preparation companies, or corporate tax departments. You can also join the IRS Volunteer Income Tax Assistance (VITA) program to assist low-income individuals with their tax returns.

7. Obtain a State License (If Required)

Whether or not you must get a license as a tax preparer varies by state. Some states, such as California, Maryland, and Oregon, require tax preparers to pay a fee and register. California requires tax preparers to apply for a California Tax Education Council (CTEC) Qualifying Course. Make sure you research your state's specific requirements for tax preparers.

8. Choose a Tax Software Program

Choosing a tax software program as a tax preparer involves several important considerations. Here are some steps to help you make the right choice:

• evaluate client needs
• user-friendliness
• features and functionalities
• customer support

There are many tax software programs to choose from. Some of the most popular are TurboTax, H&R Block, and TaxAct. When selecting a tax software program, consider reading user reviews and comparing features to find the one that best fits your needs.

9. Start Your Own Practice or Join a Firm

Once you have completed all the steps to becoming a tax preparer, you must decide whether to start your own practice or join a firm. There are multiple considerations to take into account, such as:

• experience level
• your financial situation
• client base
• career goals

Depending on your situation, it may be a good idea to join a firm as you're starting a career as a tax preparer. As you gain experience, you can reevaluate your career goals and reconsider self-employment by opening your own practice.

10. Stay Updated with Tax Laws

Staying updated with tax laws is crucial for tax preparers to ensure compliance and provide accurate services. Here are some ways to get updated information on tax laws:

• subscribe to reputable tax journals
• attend continuing education courses
• join the National Association of Tax Professionals (NATP)
• utilize IRS resources

FAQs About Online Tax Preparation Courses & Programs

Here are answers to frequently asked questions about online tax preparation courses and programs.

What Does a Tax Preparer Do?

A tax preparer assists individuals and businesses in preparing and filing their tax returns. They ensure that all financial information is accurately reported and that their clients can take advantage of available deductions and credits to minimize their tax liability. Some of their responsibilities include:

• gathering financial information
• completing tax forms
• calculating taxes
• advising clients

Does The IRS Have a Tax Prep Training Program?

Yes, the IRS offers training through the IRS Volunteer Income Tax Assistance (VITA) program. This program trains volunteers to assist low-income individuals and families with tax preparation and focuses on simple tax returns.

In addition, the IRS offers webinars and online courses to help tax professionals stay updated on tax law changes. These resources provide valuable insights and practical guidance to ensure compliance and improve the quality of tax preparation services.

Is It Worth It To Pay for a Tax Preparer Course?

Whether it is worth it to pay for a tax preparation course depends on multiple factors, such as your financial situation. Free online resources and courses are available for aspiring tax preparers. However, paid tax preparation courses have some benefits, including:

• certification options
• networking opportunities
• organized curriculum
• expert instruction

Become a Tax Professional Today

Follow these steps to becoming a tax professional and embark on your dream career. Learn the necessary skills to succeed in this high-demand career path from relevant courses and programs. Contact one of the featured institutions on Learn.org for more information.