How to Become a Tax Preparer in California:10 Steps

Do you want to know how to become a tax preparer in California? Then, this article is for you. Tax preparation entails creating tax returns for taxpayers and their representatives, including income tax returns. Tax preparers decide how much their clients should get from or give to the government.

Some tax preparers only employ their own expertise and computing skills, but the majority use tax preparation software and online tools. These experts sign and submit tax returns on behalf of both individuals and corporations.

These experts examine financial data and records, including statements and records of business expenditures, in order to produce tax returns. In order to build a thorough grasp of the client’s finances, tax preparers examine supporting data such as receipts and expense reports. Deductions and credits are applied by tax preparers before the return is submitted.

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Roles And Responsibilities Of A Tax Preparer?

Most tax professionals prepare, submit, or offer assistance with standard tax forms. In addition to these fundamental services, a tax preparer can represent a taxpayer before the IRS. This covers audits and problems with the tax court.

However, tax preparers’ abilities are limited by their certifications and the existence of representation rights.

In a sense, tax preparers are expected to fulfill both their clients’ needs and those of the IRS. While concurrently reducing the client’s tax liability, they must help their clients comply with both state and federal tax laws.

Although they are employed to represent their client, they must also carefully keep in mind their duty to the IRS and refrain from breaking any laws or assisting others in filing false tax returns.

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How To Become A Tax Preparer In California – 10 Best Steps

The field of tax preparation is expanding and offers the community a valuable and appreciated service.

However, how do you train to be a tax preparer? What kind of credentials are required? Read on to find out how to become a tax preparer in California:

STEP 1: Research CTEC Education Providers

The State of California has mandated the California Tax Education Council (CTEC), a private nonprofit quasi-public benefit corporation.

In addition to confirming nonexempt tax preparers who have satisfied the state’s basic requirements to prepare tax returns for a fee, CTEC is in charge of presenting a list of its recognized tax education providers.

You must research the best CTEC tax education providers to see the one you want to purchase their course.

The California Tax Education Council (CTEC) -approved providers of qualifying and ongoing education courses can be found by clicking here.

Courses Available:

  • Face-to-face (instructor-led) courses are frequently offered as in-person conferences and seminars.
  • A self-study course is a method of learning intended to let a student learn a particular subject without the direct involvement of a teacher. Typically, course materials are sent to students by mail, downloaded from the Internet, or made available online.

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STEP 2: Purchase The Course

Below are 5 CTEC-approved providers that offer the qualifying education course. Their prices and options vary.

  • Platinum Professional Services – Tax and Notary School

For first-time tax preparers in the state of California, they offer the CTEC 60-Hour Qualifying Tax Preparer Course. All compensated tax preparers in California must complete and pass a 60-hour qualifying tax course for California Registered Tax Preparers.

Through their secure connection, they take Mastercard, Visa, and American Express. Within thirty days of your purchase, they will give you a full refund if you are not entirely satisfied with the course.

There are no refunds offered for group orders, purchases made by students who have taken more than one quiz, or for any final exams. For classes with three or more students, Platinum Tax School provides group discounts. Call them at 877 315-1772 if you want further details.

Click here for more information.

  • Golden State Tax Training Institute

Using their 30 years of tax training expertise, Golden State Tax Training Institute has developed a course. All necessary paperwork, tax tables, and information are included in this package.

They are both an IRS-approved education provider and a CTEC-approved provider (IRS Approved Providers). Golden State Tax Training offers a 100% satisfaction guarantee on all of its products.

Click here for more information.

  • Latino Tax Pro – Tax and Book Keeping Training

This course satisfies the 60-hour Qualifying Education requirement established by the state of California to become a California Registered Tax Preparer (45 hours of Federal Tax Law, which includes the necessary 2 hours of Ethics, and 15 hours of California Tax Law).

There are 15 chapters in this course, and at the end of each chapter, the student must complete an online review exercise and a practicing tax return (PTR).

PTRs contain their own specific collection of review questions and are based on the course material that has thus far been presented.

Click here for more information.

  • WebCE

The entire CTEC 60-Hour Qualifying Education course solution is available through WebCE, a CTEC-approved education provider. Students are assessed on each of the three areas of the whole CTEC QE course, which are Federal Law, California Law, and Ethics.

Students can save and leave any test at any time, and the CTEC QE course fully prepares them for each exam. The best approach to fulfill your CTEC QE requirements and gain the tax knowledge necessary for a career as a California tax preparer is through WebCE.

Click here for more information.

  • California Tax Courses

The California Tax Education Council has authorized this 60-hour qualifying education course, which teaches you all you need to know about preparing federal and state tax returns for California.

This course is an online interactive video and reading course that you can complete at your own leisure. The films are available for you to view at your own speed online, or if you’d rather read, you may download the PDF and read it online or print it off to read it away from your computer.

Click here for more information.

STEP 3: Complete The Course

You must first finish a CTEC 60-Hour Qualifying Education Course in order to become a CTEC Registered Tax Preparer if you want to prepare tax returns for pay in the state of California.

So you have to take any of those courses above or find another provider that best suits you and see it through till the end. This is the only way you can move on to the next step.

STEP 4: Purchase A $5000 Tax Preparer Bond From An Insurance/Surety Agent

A tax professional must post a tax preparation bond in order to register with the California Tax Education Council (CTEC) and become a Certified Registered Tax Preparer (CRTP).

Tax preparers in California are required by law to operate in accordance with Division 8, Chapter 14 of the Business and Professions Code by posting a surety bond. These bonds specifically defend anyone against the principal’s falsifications, misrepresentations, dishonesty, fraud, deceit, or any other illegal acts or omissions.

Depending on the term length you choose, California tax preparer bonds are valid for two, three, or four years following the effective date. The surety has the right to revoke the bond by providing the principal with written notice at least 30 days before the cancellation takes effect.

Below are 2 sources you can get your bond, if you are not satisfied, you can research for a source that suits you.

  • Surety Bonds

For two years of coverage, a California tax preparer bond, or CTEC bond, costs $55, three years of coverage costs $70, and four years of coverage costs $80. Since no credit check is necessary to issue these bonds, all applicants are automatically pre-approved at the same rate.

Click here for more information.

  • Bonds Express

For just $25, Bonds Express ensures pre-approval for a one-year $5,000 California Tax Preparer Bond. A California Tax Preparer Bond is available from Bonds Express with a 100% approval record.

Please take note that this bond can only be issued in a person’s name, not a business’s. Instead, if a group tax preparer bond is required, please click this website to acquire one

Click here for more information.

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STEP 5: Get A Preparer Tax Identification Number (PTIN)  From The IRS

A current 2022 PTIN is required for everyone who prepares or aids in completing federal tax returns for pay. A valid PTIN is also required for all enrolled agents.

A PTIN can typically be obtained online in under 15 minutes by first-time PTIN applicants. $35.95 is the cost, and it is non-refundable.

Make sure you have the following items on hand before starting your PTIN application:

  • Your social security number.
  • Identifying details (name, mailing address, date of birth).
  • Business data (name, mailing address, telephone number).
  • Individual tax return from the previous year (name, address, filing status).
  • Causes of criminal convictions (if any).
  • Reasons why you may be having issues paying your individual or corporate taxes in the United States (if any).
  • For the $35.95 PTIN user charge, use a credit/debit/ATM card. The user charge cannot be returned.
  • Any relevant information regarding any U.S.-based professional certifications, such as a state license or a CPA, attorney, enrolled agent, enrolled retirement plan agent, enrolled actuary, or certified acceptance agent, including the certification number, the jurisdiction of issuance, and expiration date.

Once you have gathered all of your data, simply follow these simple instructions to get your PTIN:

  • Create an account – by entering your name, email address, and answer to the security question. The system will then issue you a temporary password, which you can change once you return to filling out the PTIN application with your data.
  • Apply for Your PTIN – As mentioned above, you must complete the online application by supplying personal information, details about your tax return from the previous year, professional credentials, and more.
  • Pay Your Fee – The application will take you to one of the partner banks where you can use a credit card, debit card, ATM card, eCheck, or any of those to pay the $35.95 fee.
  • Get Your PTIN — Your PTIN is provided electronically upon the completion of the online application.

Note: In your PTIN account, secure internet messaging is used to deliver all PTIN messages. To guarantee that you receive their emails, while requesting your PTIN, use the most current email address.


STEP 6: Approved Live Scans

Tax professionals were recently informed by the IRS that only electronic submissions of fingerprints for e-file applications will be accepted.

A fingerprint-based criminal history background check is necessary for several job categories, such as insurance advisers, caretakers, healthcare professionals, tax experts, etc., to ensure that people with criminal histories can be excluded from the licensing or hiring process.

Applicants are required to submit their fingerprints in order to run fingerprint-based criminal history background checks; these fingerprints are then sent to a law enforcement agency that keeps criminal history data. For instance, the Federal Bureau of Investigation keeps the nation’s largest database of criminal history records and subject biometric data.

After receiving fingerprints, the law enforcement agency conducts checks and searches for any prior criminal records. Whatever the outcome, the law enforcement organization delivers the asking agency the findings of the criminal history background check.

STEP 7: Register With CTEC

According to California law, anybody who, for payment or other consideration, assists with, prepares, or takes final ownership of work on a return for someone else and is not an exempt preparer must register as a tax preparer with the California Tax Education Council (CTEC).

The CTEC was established by the California State Legislature to encourage proficient tax preparation in the state.

Who needs to sign up with CTEC?

Any Californian non-exempt tax preparer who, in exchange for payment or another benefit:

  • Prepares or assists with state or federal income tax returns.
  • Has ultimate accountability for such refunds.
  • Dispenses these services

Exempt preparers who are exempt from CTEC registration include:

  • Certified Public Accountants in California (CPAs).
  • Enrolled agents (EAs).
  • Members of the California State Bar who practice law.
  • Officials in the banking or trust industries.

Register online, then pay the $33 registration cost.

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STEP 8: Apply For Jobs

The majority of businesses are searching for a goal-oriented tax preparer who can be in charge of giving clients advice, examining tax information provided by clients, and preparing and submitting tax returns.

To encourage recurring business, tax preparers should maintain customer confidentiality, offer superior service, and help clients plan their future taxes.

Knowing the laws and regulations, giving clients exceptional service, and upholding the organization’s high standards are all requirements for success as a tax preparer.

A top tax preparer must, in the end, be meticulous and have strong oral and written communication skills in order to deal with correspondence from clients and tax authorities.

STEP 9: Annual Renewal

In order to legally complete income tax returns, you must annually renew your registration with CTEC. Your CTEC registration must be renewed in order to:

  • Complete 20 hours or more of continuing education from a CTEC-approved provider, which must include:

    Federal tax legislation for ten hours.

    A three-hour update on federal taxes.

    5 hours of California tax law and 2 hours of ethics.
  • Renew your PTIN number annually with the IRS.
  • Keep your $5,000 tax preparer bond current.

Before October 31 of each year, renew your registration and pay the $33 annual registration fee. There will be a $55 late fee applied between November 1 and January 15.

STEP 10: Tax Preparer Continuing Education

Clients want to know that the tax preparer they choose is a true professional—someone who is qualified, educated, and committed to offering the best service. You may demonstrate your knowledge and commitment to your clients by participating in continuing education.

To maintain their certification, different tax preparers require different kinds of education. The IRS has advised taxpayers to only choose tax preparers with certifications or other specific skills starting in 2015.

To keep up your reputation as a competent tax preparer, continuing education is more crucial than ever.

You don’t need to continue your tax preparer education to maintain your PTIN status. However, you will no longer be able to speak on behalf of your clients before the IRS. You can only submit tax returns for your clients if you have CE through the IRS Annual Filing Season Program.

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How Much Do Tax Preparers Earn In California?

The average annual salary for an Entry-Level TAX Preparer in California is $26,638 as of September 14, 2022. That comes out to about $12.81 an hour, in case you need a quick pay calculator. This amounts to $512 each week or $2,219 per month.

There may be numerous prospects for progression and increased income based on skill level, region, and years of experience given the wide variation in typical salary for an Entry Level TAX Preparer (up to $7,448).

According to recent job posting activity on ZipRecruiter, there aren’t many employers hiring right now, making the Entry Level TAX Preparer job market in California quite quiet.

California is the 23rd-highest paying state out of all 50 in terms of entry-level tax preparer earnings.

How Much Do Tax Preparers Make in California?

As of August 29, 2022, the average income for a Certified Tax Preparer in California is $51,636, while the range is often between $46,489 and $57,642.

How Much Does a $5000 Tax Preparer Bond Cost?

For two years of coverage, a California tax preparer bond, or CTEC bond, costs $55, three years of coverage costs $70, and four years of coverage costs $80.

Do You Need a License to Become Tax Preparer?

You don’t require a particular license to work as a preparer. However, in order to have representation privileges with the IRS, you must be an enrolled agent, CPA, or attorney.

How Do I Get a Surety Bond in California?

A surety business that holds a California Department of Insurance license must write the bond.

How Can I Buy a 5000 Tax Preparer Bond?

Most insurance and surety businesses, which may be located through your local phone book, through your insurance agent, or through an online bonding agency, sell bonds for tax preparers.

What Certifications Do I Need to File Taxes?

Tax preparers must become enrolled agents (EAs), certified public accountants (CPAs), or attorneys in order to have unrestricted representation powers.

Candidates for each of these professional pathways must succeed on an exam and obtain an IRS preparer tax identification number (PTIN).

Which is Better CPA or EA?

Both EAs and CPAs are skilled, seasoned professionals who are expected to uphold the highest ethical standards.

EAs specialize in taxation, whereas CPAs can also specialize in other areas. This is the main distinction between an EA and a CPA.

What is Another Name for a Tax Preparer?

Certified Public Accountant (CPA)

Is it Worth Having a CPA Do Your Taxes?

Your required tax documents can be prepared and filed with the assistance of CPAs online or in person.

They can also provide guidance on how to maximize your tax return. When your circumstances are complicated or need a large amount of labor, hiring a tax specialist frequently works to your advantage.

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