Are you planning on filing taxes for the 2024 filing season? You know, the ones for tax year 2023 that will be filed in early 2024? Well, before you can do that, there is one crucial number you need from the Internal Revenue Service (IRS). This is known as the Preparer Tax Identification Number or PTIN and it’s a distinctive number assigned to every tax preparer that files taxes for pay. In this article we’ll talk about navigating the PTIN Process as it is one of your keys to having a successful 2024 filing season!
Some Background
The IRS started requiring tax preparers to have a Preparer Tax Identification Number (PTIN) in 2011. The requirement was enacted as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The purpose of the PTIN requirement was to help the IRS identify and track tax preparers, and to ensure that they were meeting minimum standards of competency and ethics.
Obtaining Your PTIN Electronically
Obtaining your own PTIN is pretty straightforward. To start, you only need to create an account with the IRS, providing your name and email address. You can create an account by going to this page on the IRS’ webpage. After this, you will need to complete an online application where you provide personal information about yourself, such as your Social Security number, date of birth, and mailing address. Additionally, you will need to provide business information, professional certifications (such as a CPA, enrolled agent, state license, etc.), and previous tax returns to verify your identity.
After completing this application, you will be directed to a partner bank where you can pay the fee associated with having a PTIN. In 2023, that fee is $19.75 and can be paid using a credit or debit card, or an eCheck.
Now, the important thing to remember that you must renew your PTIN every year before the beginning of the new tax season. All PTINs expire on December 31st each year and the IRS usually starts the renewal process mid-October each year for the upcoming tax season. Once all these steps are completed, your PTIN will be provided to you online!
Paper Application
If you prefer to fill out a paper application, you can use IRS Form W-12 along with the appropriate documents. The IRS requires that you submit an original or certified copy of your Social Security Card and a government-issued document with a photo of yourself. According to the IRS, acceptable supporting documents include:
- Passport/Passport Card
- Driver’s License
- U.S. State ID Card
- Military ID Card
- National ID Card
Once all documents are ready for mailing, you can send them to:
IRS Tax Pro PTIN Processing Center
PO Box 380638
San Antonio, TX 78268
This process usually takes about four to six weeks to process, compared to about 15 minutes when completing the process online. However, once the IRS has processed your documents, they will mail them back to the address shown on Form W-12.
Using Your PTIN
Once your PTIN is obtained, a tax preparer is ready to file a tax return, as the number is placed in the “Paid Preparer” section of a tax return. It also serves as the identification number for each paid tax return preparer. It is essential for a tax preparer to have a PTIN because it allows individuals who file tax returns to get compensated for their work.
Other Important Reminders
- There is a penalty if a preparer fails to provide their PTIN on a return they were paid to preparer.
- At the time writing this, that penalty is $50 for each return and with the IRS capping the maximum in penalties at $27,000 per year!
- With this in mind, it’s important that you also never say that a return is self-prepared because it may cause issues with the IRS.
Having a PTIN signifies that you’re a professional tax preparer who is earning income from filing tax returns. It offers people seeking a tax preparer the reassurance that you have met the minimum requirements to charge for the services you are providing.
For any further questions or scenarios you may be facing, the IRS offers a page for frequently asked questions and different situations that you can review. You can also check out this video on our YouTube channel.