I decided this year that i want to prepare 1040 returns, and i just wondering if anyone would be kind enough to answer some questions i have about preparing. They are are as followed:
1) Do i need to come up with a business name if i am the only who will be preparing taxes? If so does it matter what name i use for my business
2) Aside from the PTIN what else would i need to begin preparing returns?
3) What is the best software to use for a beginner like myself
4) Where would i find an organizer that i could to supply my clients?
5) If i already prepare taxes for a firm that i work at am i still able to prepare returns on my behalf?
I am an Corporate Accountant with 15 plus years experience. So I will answer your questions in the same order.
1. No you don't need a business name or not even TIN # you are able to use your name and social security number. Is best if you have a separate TIN number you because you want to have your personal tax apart from any business matters. In fact you can have a separate Tax ID even without a Business name. You can verified this information on the IRS webpage under the different business entities.
2. So you need to be certified by the IRS as preparer and they will give you preparer number. Please visit the IRS website and follow the instructions there in how to become a preparer.
3. Any website that is free and the IRS recognizes or recommends, I myself I used different websites and do different scenarios for my customer prior to submit the returns.
4. Dont quite understand the question.
Again all the information you need is available to you in the IRS website.
Best of luck!
I am a CPA at PwC. I am more than happy to answer your questions .
1. No, you don't need to create a business and registering a business name. You can simply use the PTIN number.
2. PTIN number is the only thing you need.
3. There are a lot paid and free tax software, such as Turbo tax, HR block, TaxSlayer. Try to google some software.
4. Try to look at your State CPA organization.
5. Yes, you can.
Wish you the best!
I'm not a tax preparer nor accountant. I would consult with a Tax Lawyer to understand the risks and potential liabilities if you file tax returns on your own.
You would need to check your agreement and terms with the Tax Prep firm you plan to work for to see if they'll allow you to prepare returns on your own time.
https://www.cpapracticeadvisor.com/tax-compliance/article/21140085/2020-review-of-professional-tax-preparation-systems has a list of software for Pros. I would suspect that those will be pretty expensive.
I'd be very careful about preparing returns on you own computer. I suspect you will be liable for any data breaches and have certain requirements to store and retain confidential client data. I assume that the above tax programs handle that for you and that's part of why they're expensive.
Hassan recommends the following next steps:
As a CPA and a former owner of a small tax preparation company I am happy to answer your questions:
1. You are not required to have a special business name in order to open a tax practice. Having a PTIN would be sufficient
2. A PTIN is all that is needed to start the practice, however if you believe this practice will be longer term you may want to consider incorporating, because there is a liabilities associated on the tax preparer
3. Utilizing a tax software such as UltraTax is one of the most user friendly software to use for starting a business. TurboTax while easy to use for personal taxes, is very difficult to utilize for operating a tax practice
4. Organizations like the AICPA have organizers available to use for tax practices however requires a membership to obtain
Wish you the best of luck in your practice!
Mark recommends the following next steps: