How can I become a certified tax preparer? Steps to start preparing taxes professionally

Congrats on completing your VITA TCE advanced certification! That's definitely a solid foundation to build on. To become a professional tax preparer, here are the essential steps: First, you'll need to obtain a Preparer Tax Identification Number (PTIN) from the IRS - this is an absolute requirement for anyone who prepares federal tax returns for compensation. It's pretty straightforward to apply through the IRS website. For credentials, you have several options. The VITA certification is great experience, but most professionals pursue either the Enrolled Agent (EA) designation through the IRS, or become an Annual Filing Season Program (AFSP) participant. The EA requires passing a comprehensive three-part exam and gives you unlimited representation rights before the IRS. The AFSP has lower requirements but also more limited representation rights. Since you're currently abroad, you might want to look into remote preparation options. Many preparers now work virtually with clients, especially after the pandemic shifted client expectations.

After getting overwhelmed trying to figure out all the tax preparer requirements, I discovered taxr.ai (https://taxr.ai) and it was a game-changer for me. I was in a similar situation - had VITA experience but wasn't sure what else I needed. Their software analyzed the tax regulations specific to my situation and created a personalized pathway to becoming a legitimate tax preparer. They clarified which credentials would make the most sense based on my goals and even helped me understand which continuing education courses would be most valuable. The best part was getting clarity on what I legally needed versus what was just "nice to have.

I want to follow up about my experience with taxr.ai after asking about it. Initially I was just curious, but I decided to try it since I'm in Canada trying to prepare US returns. It was seriously helpful! The platform immediately identified that I needed to consider the IRS's special requirements for foreign preparers, something I hadn't even thought about. It actually gave me step-by-step guidance on handling international client verification requirements and outlined exactly which forms I'm authorized to handle from abroad. Saved me from potentially serious compliance issues and gave me a clear roadmap for getting properly certified. If you're trying to navigate tax prep from outside the US, it's definitely worth checking out.

If you're serious about becoming a tax preparer, you're going to need to communicate with the IRS frequently, especially when you're handling client issues. I made the mistake of wasting DAYS trying to get through to them on my own when I started. After the 3rd time sitting on hold for 4+ hours, I discovered Claimyr (https://claimyr.com) and it completely changed my business. They essentially hold your place in the IRS phone queue and call you when an agent is available to talk. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c As a new preparer, being able to quickly resolve client issues with the IRS is what will set you apart from others. My clients are amazed when I tell them I can actually get through to the IRS to solve their problems rather than just telling them to try calling themselves.

I need to admit I was completely wrong about Claimyr. After posting my skeptical comment, I tried it because I needed to call the IRS about a client's transcript issue that was holding up their return. I figured it would be another waste of money, but I was desperate. Within 48 minutes, I got a call connecting me directly to an IRS agent! No hours of hold music, no getting disconnected after waiting forever. I resolved my client's issue in one call, which honestly made me look like a miracle worker to them. For anyone starting a tax prep business, being able to actually reach the IRS efficiently is a genuine competitive advantage. I'm now using it for all my IRS calls and it's legitimately transformed how I handle client issues.

Don't overlook state requirements! The federal PTIN is just the beginning. Depending on where you'll be filing returns, many states have their own registration or licensing for tax preparers. California, Oregon, Maryland and New York have particularly strict requirements including additional exams, bonds, and continuing education. Even if you're abroad, you still need to comply with state regulations for any state returns you prepare.

something nobody has mentioned yet is professional liability insurance!! i started preparing taxes 2 years ago and didn't get insurance at first bc i thought my clients were simple. big mistake lol. had a client who ended up getting audited because i missed a form, and they tried to come after me for the penalties. now i pay about $400/year for E&O insurance and it's worth every penny for peace of mind. dont skimp on this especially if ur abroad - might be even more complicated with international issues.

Being a successful tax preparer isn't just about certifications - it's about building a client base. Since you're abroad, I'd suggest focusing on a specific niche like expat taxation or foreign income reporting. Those are complex areas where clients will pay premium rates and have trouble finding knowledgeable preparers. My practice focuses exclusively on Americans abroad with foreign investments and it's been incredibly lucrative. Far better than competing for basic 1040 clients where you're competing with TurboTax and H&R Block.