How to Get a Tax Preparer License in Texas
Obtaining a tax preparer license in Texas is a crucial step for individuals looking to enter the tax preparation profession. This license not only enhances your credibility but also opens up a world of opportunities to help clients navigate the complex tax code. In this article, we will guide you through the process of obtaining a tax preparer license in Texas, from meeting the requirements to passing the necessary exams.
1. Understand the Requirements
The first step in obtaining a tax preparer license in Texas is to familiarize yourself with the requirements set by the Texas State Board of Public Accountancy (TSBPA). These requirements include:
- Be at least 18 years of age
- Pass the IRS Competency Exam
- Complete 60 hours of Continuing Education (CE) courses
- Pass the Texas State Exam
- Be bonded and have liability insurance
2. Pass the IRS Competency Exam
The IRS Competency Exam is a comprehensive test that assesses your knowledge of federal tax law and regulations. To take the exam, you must register with the IRS and pay the required fee. The exam consists of two parts: the Special Enrollment Examination (SEE) and the Annual Filing Season Program (AFSP) Record of Completion. You must pass both parts to obtain a Preparer Tax Identification Number (PTIN) and become eligible for a Texas tax preparer license.
3. Complete 60 Hours of Continuing Education (CE) Courses
Texas requires tax preparers to complete 60 hours of CE courses within the two years prior to applying for a license. These courses must be approved by the IRS and cover various topics related to tax preparation, such as tax law, ethics, and tax preparation software. You can find a list of approved CE courses on the TSBPA website.
4. Pass the Texas State Exam
The Texas State Exam is designed to test your knowledge of Texas-specific tax laws and regulations. This exam is administered by the TSBPA and consists of 100 multiple-choice questions. You must score at least 70% to pass the exam. The exam is available in English and Spanish.
5. Be Bonded and Have Liability Insurance
Before applying for a tax preparer license in Texas, you must obtain a surety bond and liability insurance. The bond amount is $25,000, and the liability insurance must cover $100,000 per claim and $300,000 in the aggregate. These requirements help protect clients from potential financial loss due to errors or fraud committed by the tax preparer.
6. Apply for the Tax Preparer License
Once you have met all the requirements, you can apply for a tax preparer license through the TSBPA. You will need to submit the following documents:
- Application form
- Passing scores from the IRS Competency Exam and Texas State Exam
- Proof of completion of 60 hours of CE courses
- Proof of bonding and liability insurance
- Payment of the licensing fee
7. Maintain Your License
After obtaining your tax preparer license, it is essential to maintain it by continuing to meet the requirements set by the TSBPA. This includes completing 15 hours of CE courses every year and paying the annual license renewal fee.
By following these steps, you can successfully obtain a tax preparer license in Texas and begin your career as a trusted tax professional. Remember to stay up-to-date with the latest tax laws and regulations to provide the best possible service to your clients.
