[finne]

Hey all, I have a question for the community. Seems like my brain dumped 50% of what I learned from REG back in July… Anyway, you’ve all probably gotten the “Hey, you’re an accountant?! Can you do my taxes!” from friends/family/people you run into on the street. How do you deal with this?

Personally, I wouldn’t mind doing taxes on the side to supplement my income, but I don’t want to get in over my head. What steps would I have to take since I’m not a CPA yet? Would I need to apply to be an enrolled agent? Would I need to get liability insurance and everything?

On the other hand, I could just stick to preparing friend and family returns for free. Are there any legal ramifications if I do that? Do I still need to get a PTIN and everything?

Little confused about how people deal with this issue during tax season. Figured you guys on this forum would be the best people to ask 🙂

Thanks!

REG - 85
AUD - 99
FAR - 89 - w/ NINJA Audio and Blitz
BEC - 91

Using Wiley - books and test bank - 6 months - all 4 first time

[Anonymous]

I normally do all the returns for my family. I prepare them, but they are e-filed as “self-prepared”. I have a PTIN as it is now required for me to have at work, but I don't even put it on my own tax return. Unless you're really looking to start your own tax return prep business, I don't think it is worth it, legally speaking, to sign (as the preparer) other people's returns. I have family friends that I have done tax returns on occasion before, but I always clear the air with them first to make sure that they know it is “self-prepared” and if anything comes back, I am not responsible (obviously I would help them with any notices, but there would be no “liability” so to say, involved). Hope I am making sense…

Not to mention, “good” software is expensive and not really worth the money. And free software is very basic.

If you are interested in signing the returns, I'm not 100% positive but I believe you would need a) a PTIN and b) either a CPA or EA.

[Anonymous]

I normally do all the returns for my family. I prepare them, but they are e-filed as “self-prepared”. I have a PTIN as it is now required for me to have at work, but I don't even put it on my own tax return. Unless you're really looking to start your own tax return prep business, I don't think it is worth it, legally speaking, to sign (as the preparer) other people's returns. I have family friends that I have done tax returns on occasion before, but I always clear the air with them first to make sure that they know it is “self-prepared” and if anything comes back, I am not responsible (obviously I would help them with any notices, but there would be no “liability” so to say, involved). Hope I am making sense…

Not to mention, “good” software is expensive and not really worth the money. And free software is very basic.

If you are interested in signing the returns, I'm not 100% positive but I believe you would need a) a PTIN and b) either a CPA or EA.

[Anonymous]

And also to add – from an ethical standpoint, I don't really like doing tax returns that aren't family. I normally try to just stick with my immediate family.

If you are going to really try and make money off of it, I think you need to go full-fledge and cover your bases legally.

Just my $0.02 🙂

[Anonymous]

And also to add – from an ethical standpoint, I don't really like doing tax returns that aren't family. I normally try to just stick with my immediate family.

If you are going to really try and make money off of it, I think you need to go full-fledge and cover your bases legally.

Just my $0.02 🙂

[tough_kitty]

I agree with the post above. I tried to start my own tax return preparation business but it doesn't really work if I don't have clients…And man, if you don't want to help your friends, send them to me 😉

In California the minimum requirement to be a paid tax preparer is CTEC license – less requirements than EA. But it's also expensive – you need to complete a course, pay fees, get bonded, apply for PTIN and e-file for IRS since most people want their returns to be processed faster. And you'd have to purchase tax software or pay per return but it all adds up especially when you don't want to charge your friends….or if you want to offer them a lower fee. I'm just not sure if we can do the H&R Block model (“self-prepared”) and charge for it without having a business…cuz that would be considered income under the table…

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[tough_kitty]

I agree with the post above. I tried to start my own tax return preparation business but it doesn't really work if I don't have clients…And man, if you don't want to help your friends, send them to me 😉

In California the minimum requirement to be a paid tax preparer is CTEC license – less requirements than EA. But it's also expensive – you need to complete a course, pay fees, get bonded, apply for PTIN and e-file for IRS since most people want their returns to be processed faster. And you'd have to purchase tax software or pay per return but it all adds up especially when you don't want to charge your friends….or if you want to offer them a lower fee. I'm just not sure if we can do the H&R Block model (“self-prepared”) and charge for it without having a business…cuz that would be considered income under the table…

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[mla1169]

Personally I wouldn't accept payment for doing others taxes unless I was signing as an authorized tax preparer and had some real life experience under my belt. Having a CPA doesn't qualify you to do taxes IMHO any more than you could just start doing audits without experience.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[mla1169]

Personally I wouldn't accept payment for doing others taxes unless I was signing as an authorized tax preparer and had some real life experience under my belt. Having a CPA doesn't qualify you to do taxes IMHO any more than you could just start doing audits without experience.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[tough_kitty]

That's true. I'd suggest trying VITA first – good experience.

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[tough_kitty]

That's true. I'd suggest trying VITA first – good experience.

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[finne]

Thank you all for the feedback! So the vibe I'm getting is that if I prepare returns for friends and family, I should tell them upfront that the liability's on them and that they'll be signing as self-prepared. And I can't really accept payment from people because I'm not certified to prepare tax returns by the IRS.

I have done VITA in the past so I have some basic experience. Otherwise I wouldn't even consider doing people's taxes, lol.

Guess I'll have to revisit this issue in a couple years once I get the CPA and I'm ready for it.

REG - 85
AUD - 99
FAR - 89 - w/ NINJA Audio and Blitz
BEC - 91

Using Wiley - books and test bank - 6 months - all 4 first time

[finne]

Thank you all for the feedback! So the vibe I'm getting is that if I prepare returns for friends and family, I should tell them upfront that the liability's on them and that they'll be signing as self-prepared. And I can't really accept payment from people because I'm not certified to prepare tax returns by the IRS.

I have done VITA in the past so I have some basic experience. Otherwise I wouldn't even consider doing people's taxes, lol.

Guess I'll have to revisit this issue in a couple years once I get the CPA and I'm ready for it.

REG - 85
AUD - 99
FAR - 89 - w/ NINJA Audio and Blitz
BEC - 91

Using Wiley - books and test bank - 6 months - all 4 first time

[Anonymous]

Do I have to purchase tax act professional version or buy expensive software if I plan on serving only a few clients for basic tax returns? Is it okay if I prepare their returns using taxact basic edition software?

[Anonymous]

Do I have to purchase tax act professional version or buy expensive software if I plan on serving only a few clients for basic tax returns? Is it okay if I prepare their returns using taxact basic edition software?

[Author]

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