What you need to do to become a tax preparer

A tax preparer is someone who completes and files tax returns for clients. You do not need a college degree or a specific credential to prepare taxes for others — but you do need to register with the IRS, pass a test, and follow rules about who you can represent. The path depends on how far you want to go: you can work as a limited preparer with minimal credentials, or pursue a Certified Public Accountant (CPA) or Enrolled Agent (EA) credential, which takes longer but opens more doors.

The fastest entry point is the IRS Preparer Tax Identification Number (PTIN). You explore for a PTIN through the IRS website, pay a fee (currently $31 per year), and you can then prepare returns. But if you want to sign returns you prepare for others, you must also pass the Registered Tax Return Preparer (RTRP) exam or hold an EA, CPA, or attorney license. Without one of these credentials, you can prepare returns but cannot sign them as the preparer of record.

Key Takeaways

  • You must obtain an IRS Preparer Tax Identification Number (PTIN) before you prepare any tax return for payment, and renew it every year.
  • To sign returns as the preparer, you must pass the Registered Tax Return Preparer exam, become an Enrolled Agent, earn a CPA license, or be a licensed attorney.
  • The RTRP exam costs money to register for and requires 20 hours of continuing education per year once you pass.
  • An Enrolled Agent credential requires passing three IRS exams and 72 hours of continuing education annually, but lets you represent clients before the IRS.
  • A CPA license requires a college degree, passing the CPA exam, and meeting your state's experience requirements, which vary by state.

Getting your PTIN and understanding what it allows you to do

The PTIN is your first step. You register through the IRS at irs.gov/tax-professionals/ptin. You will need to provide your Social Security Number or Employer Identification Number, your name, address, and date of birth. The fee is $31 per year, paid when you renew. Once you have a PTIN, you can prepare returns for clients.

However, a PTIN alone does not let you sign the return as the preparer. If you prepare a return without signing it, the client signs it themselves, and you are not listed as the tax preparer of record. Many preparers work this way — they prepare the return, the client reviews it, and the client files it. But if you want your name on the return as the preparer who completed it, you need a credential.

You must renew your PTIN every year by December 31 if you plan to prepare returns in the next tax year. The IRS sends renewal notices, but it is your responsibility to complete the renewal. If your PTIN lapses, you cannot prepare returns until you renew.

Passing the Registered Tax Return Preparer exam

The RTRP exam is a three-hour, 100-question test administered by Prometric, a testing company. You register and pay the exam fee (currently $120) through Prometric's website. The exam covers federal tax law, filing requirements, deductions, credits, and ethics. You must score at least 70 percent to pass.

The exam is offered year-round at testing centers in most cities. You can register online, choose your test date and location, and take the exam on a computer. After you pass, you must complete 20 hours of continuing education every year to keep your credential active. These hours can come from IRS-approved providers like the National Association of Tax Professionals, H&R Block, or university extension programs.

Once you pass the RTRP exam, you can sign returns and represent clients in certain situations. However, your authority is limited: you cannot represent clients before the IRS in audits or appeals. If a client is audited, they must hire an EA, CPA, or attorney to represent them, or represent themselves.

Becoming an Enrolled Agent

An Enrolled Agent (EA) is a credential issued by the IRS that lets you represent clients before the IRS in audits, appeals, and other matters. To become an EA, you must pass three IRS exams: the Special Enrollment Exam (SEE) Part 1 (individuals), Part 2 (businesses), and Part 3 (representation, practice, and procedure). Each exam is two hours and costs $23 to register. You can take them in any order, and you have a rolling three-year window to pass all three.

After you pass all three exams, you explore for your EA credential through the IRS. You must also complete 72 hours of continuing education every three years to keep your EA active. This is more demanding than the RTRP requirement, but the EA credential is widely recognized and lets you do more for your clients.

Many tax preparers pursue the EA credential because it is faster than a CPA (no college degree required) and more powerful than the RTRP (you can represent clients before the IRS). The exams are challenging but can be studied for on your own time using study guides and practice tests.

Getting a CPA license

A Certified Public Accountant (CPA) license is the highest credential in tax preparation and accounting. To become a CPA, you must meet your state's education requirement (usually 150 college credit hours, including specific accounting and business courses), pass the four-part Uniform CPA Exam, and meet your state's experience requirement (typically one to three years of accounting work under a CPA's supervision).

The CPA exam is administered by the National Association of State Boards of Accountancy (NASBA) and costs several hundred dollars to register for all four sections. Each section covers different material: auditing and attestation, business and environment, financial accounting and reporting, and regulation (which includes tax). You must pass all four sections within an 18-month rolling window.

The CPA path takes the longest — usually four to six years from starting college to holding your license — but it opens the most opportunities. CPAs can prepare returns, represent clients before the IRS, and work in accounting, auditing, and consulting roles. If you already have a college degree but not in accounting, you may be able to complete the accounting courses and exam without a full degree program, depending on your state.

Understanding continuing education requirements

Once you hold any tax credential, you must complete continuing education (CE) hours every year or every few years to keep it active. The IRS sets the requirements and approves providers. For an RTRP, it is 20 hours per year. For an EA, it is 72 hours per three-year period (24 hours per year on average). For a CPA, it varies by state but is typically 40 hours per year.

CE courses cover tax law changes, ethics, new forms, and software updates. You can take them online, in person, or through webinars. Providers include the IRS, the National Association of Tax Professionals, state CPA societies, H&R Block, and many colleges. Keep records of your CE completion — the IRS or your state board may ask for proof during an audit or renewal.

If you do not complete your CE hours by the important date, your credential lapses. You can renew it by completing the back hours and paying a late fee, but you cannot prepare returns or represent clients while your credential is inactive.

Setting up your tax preparation business

Once you have your PTIN and a credential (if you plan to sign returns), you can start preparing taxes for clients. You do not need to form a business entity to start — you can work as a sole proprietor and report your income on Schedule C of your own tax return. However, many preparers form an LLC or S-Corp for liability protection and tax reasons.

You will need to decide whether to work for an existing firm (like H&R Block, Jackson Hewitt, or a local CPA firm) or start your own practice. Working for a firm means steady income, training, and client flow, but less control and lower pay. Starting your own practice means more control and higher potential earnings, but you must find clients, manage your own schedule, and handle all business expenses.

You should also obtain professional liability insurance (also called errors and omissions insurance) to protect yourself if a client sues over a mistake on their return. This insurance is inexpensive and widely available from insurance brokers.

Frequently Asked Questions

Do I need a high school diploma or college degree to become a tax preparer?

No. You do not need a high school diploma to get a PTIN or pass the RTRP exam. However, if you want to become a CPA, you must have a college degree (usually 150 credit hours) and pass the CPA exam. An EA requires no degree — only passing three IRS exams.

How much does it cost to become a tax preparer?

The PTIN costs $31 per year. The RTRP exam costs $120. The three EA exams cost $23 each. Continuing education varies but typically costs $100 to $500 per year depending on the provider and number of hours. A CPA exam and college coursework cost significantly more — several thousand dollars total.

Can I prepare taxes without a credential?

Yes, you can prepare returns with only a PTIN. However, you cannot sign the return as the preparer. The client must sign it themselves. If you want your name on the return as the preparer of record, you need an RTRP, EA, CPA, or attorney license.

How long does it take to become a tax preparer?

You can get a PTIN and start preparing returns in a few weeks. Passing the RTRP exam takes a few months of study. Becoming an EA typically takes six months to two years depending on how quickly you pass the three exams. A CPA takes four to six years including college.

What is the difference between an RTRP and an EA?

An RTRP can prepare and sign returns but cannot represent clients before the IRS in audits or appeals. An EA can do both. An EA requires passing three exams instead of one and 72 hours of CE every three years instead of 20 hours per year. The EA credential is more powerful but requires more work to maintain.