Tax Chat features information about tax filing and tax preparation along with information on starting your own business as a tax professional.
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Open your own business as a tax professional
Getting started is simple with these steps:
Step 1: Choose Your Course to Learn Tax Preparation
Complete a beginner tax preparation course if you're new to taxes. There are currently 5 states which regulate individuals who prepare state-level tax returns.Visit your state government website to learn more.
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.
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. You should also review FAQs: e-Services and Secure Access.
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.