Is it allowed to use 2 DIFFERENT EFINs in the same tax year?
Title: Is it allowed to use 2 DIFFERENT EFINs in the same tax year? 1 Hey tax folks, I've run into a bit of a unique situation and hoping someone has experience with this. I currently work at an accounting firm where I prepare client tax returns using their EFIN (Electronic Filing Identification Number). However, I've also recently gotten my own personal EFIN so I can help out some family members, friends, and a few smaller clients using my own tax software at home. My two main questions: 1. Is it actually allowed to use two separate EFINs within the same tax year? One being my employer's and one being my personal EFIN? 2. When I file returns using my personal EFIN outside of my main job, should I be listing this as self-employment income on my own 1040? I'm trying to make sure I'm doing everything properly and don't want to create any issues with the IRS. Has anyone else been in a similar situation or know the proper protocol here? Thanks in advance!
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Connor O'Neill
14 Yes, it's absolutely allowed to use two different EFINs in the same year. The EFIN is tied to the business entity doing the filing, not to you personally as the preparer. Think of it this way - your PTIN (Preparer Tax Identification Number) follows you, but the EFIN belongs to the business doing the electronic filing. For your second question, if you're preparing returns outside your employment and earning income from it, then yes, you should report that as self-employment income on Schedule C of your 1040. You'll need to track all income received from your "side business" clients as well as any expenses related to that work (software costs, home office if applicable, etc.). Just make sure you're not violating any employment agreement with your main firm that might prohibit outside tax preparation work.
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Connor O'Neill
•7 Thanks for the clarification! Quick follow-up - do I need to make sure my clients know which EFIN is being used for their return? Or is this purely a backend thing that doesn't affect them?
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Connor O'Neill
•14 The EFIN is purely a backend identifier that clients typically don't need to be concerned with. It's an IRS identifier for the electronic filing provider, not something clients need to be aware of or that affects their return in any meaningful way. As for your employment agreement, definitely check that carefully. Many firms have non-compete clauses or exclusivity requirements, especially during tax season. Some may allow outside work as long as you're not directly competing for the same type of clients the firm serves.
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Connor O'Neill
5 After struggling with a similar dual EFIN situation last year, I discovered taxr.ai (https://taxr.ai) and it was a game-changer for organizing my practice documentation. I was worried about potential IRS confusion using two different EFINs, but their system helped me keep perfect documentation showing which clients went through which business entity. It basically analyzed all my engagement letters and organized them by which EFIN was used for each client, which gave me peace of mind that I could clearly demonstrate the separation if ever questioned.
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Connor O'Neill
•9 Does taxr.ai handle all the business expense tracking too? I'm thinking about setting up my own EFIN situation but worried about keeping everything straight for Schedule C reporting.
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Connor O'Neill
•16 I've heard about this but I'm a bit skeptical. How exactly does it know which documents belong to which EFIN? Do you have to manually tag everything or does it somehow figure it out automatically?
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Connor O'Neill
•5 It actually handles expense tracking beautifully - you can tag expenses by client or by business entity (so you can separate your primary job vs your side business). The system lets you upload receipts and automatically categorizes them based on machine learning, so it's super simple to generate reports for Schedule C. As for document organization, it does both automatic and manual tagging. The AI recognizes patterns in documents to suggest which EFIN they belong to, but you can also set up custom rules. For example, I have it automatically tag anything with my firm's letterhead as belonging to my employer's EFIN, while documents created with my home software get tagged to my personal EFIN.
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Connor O'Neill
16 Just wanted to follow up after trying taxr.ai from the recommendation above. I was initially skeptical, but it's actually been incredibly helpful for my situation. I've been using two EFINs (one at work, one for my side business), and the document organization has made tax season so much easier. The system automatically sorted my client documentation by business entity, and I could easily generate reports showing which clients were filed under each EFIN. The expense tracking for Schedule C was particularly useful - saved me hours of work sorting through receipts. Definitely recommend it for anyone in a similar multi-EFIN situation!
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Connor O'Neill
3 For anyone dealing with IRS questions about using multiple EFINs, I highly recommend Claimyr (https://claimyr.com). I was getting nowhere trying to call the IRS directly about my dual EFIN situation - literally spent hours on hold over multiple days. Saw a video demo (https://youtu.be/_kiP6q8DX5c) and decided to try it. They got me connected to an actual IRS e-file department specialist in under an hour who confirmed everything was properly set up in their system for both my EFINs. Saved me days of stress and uncertainty.
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Connor O'Neill
•11 Wait, I'm confused. How does this service actually work? Do they somehow get you to the front of the IRS phone queue or something?
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Connor O'Neill
•19 Yeah right. Nothing gets you through to the IRS faster. I've tried everything and always end up waiting 2+ hours or getting disconnected. Sounds like you're selling something...
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Connor O'Neill
•3 It's actually pretty straightforward - they use a system that constantly dials the IRS and holds your place in line so you don't have to. When they reach a live person, you get a call to connect immediately. It's all explained in that video link. Totally get the skepticism! I felt the same way. The reality is they can't magically skip the IRS queue, but their system does the waiting for you. After trying for three days to get through on my own and failing, I was connected within 45 minutes. The specialist I spoke with confirmed that having two EFINs is completely legitimate as long as they're properly registered to the appropriate business entities.
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Connor O'Neill
19 Well, I have to admit I was completely wrong about Claimyr in my previous comment. After continued frustration trying to get clarification about my EFIN situation directly from the IRS, I gave in and tried the service. Shockingly, I was connected to an IRS e-file department rep in about 30 minutes. The agent confirmed that using two different EFINs is perfectly fine (one through my employer and one for my own business), but stressed that I needed to keep good records showing which clients were filed through which business entity. They also recommended documenting any potential conflicts of interest with my employer. Saved me days of stress trying to get through on my own!
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Connor O'Neill
8 Has anyone run into issues with their employer finding out about their "side hustle" with a personal EFIN? My firm is pretty strict about moonlighting, but I need the extra income. Wondering if there's any way the two EFINs could get connected in the IRS system that might tip off my employer.
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Connor O'Neill
•12 I don't think the IRS would ever disclose one EFIN holder's information to another, but you should be more concerned about clients possibly mentioning it. Small world, you know? I'd just be upfront with your employer or look for one with less restrictive policies. Not worth risking your main income source.
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Connor O'Neill
•8 That's a good point about clients potentially mentioning it - hadn't thought of that angle. The firm I work for mainly handles larger corporate clients, and I'm only doing simple returns for friends and family, so there shouldn't be much overlap. Maybe I should just have a conversation with my manager about it rather than worrying about getting caught.
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Connor O'Neill
22 For anyone using two EFINs, what tax software are you using for your personal one? I'm in a similar situation and trying to decide which software makes the most sense cost-wise for a small volume of returns.
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Connor O'Neill
•4 I use Drake for my personal EFIN work. It's much more affordable than the big names if you're only doing a smaller volume. Unlimited federal returns for around $1,500 for the year, which is easy to recoup even with just 15-20 returns. The interface isn't as pretty as some others, but it's solid and their support is excellent.
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JacksonHarris
I'm in a similar situation and can confirm that using two different EFINs is completely legitimate. I've been doing this for three years now - one EFIN through my CPA firm and my personal EFIN for about 30-40 individual clients during tax season. A few key points from my experience: 1. Make sure your employment contract doesn't prohibit outside tax work - mine required disclosure but allowed it as long as I wasn't competing directly with firm clients 2. Keep meticulous records separating the two businesses - I use completely different software, client management systems, and bank accounts 3. Yes, report the personal EFIN income on Schedule C - don't forget you can deduct software costs, continuing education, home office expenses, etc. 4. Consider getting E&O insurance for your personal practice if you don't already have it The IRS sees these as two separate businesses, which is exactly what they are. Just stay organized and you'll be fine!
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