Can I charge to help people file their taxes?
Topic: Big data research questions
June 27, 2019 / By Ashlee Question:
Ive filed family members taxes for years. Can I help neighbors file their basic taxes and charge a small fee for my time? I m not a certified tax preparer. It ll cost a few hundred dollars to become certified. I dont want to spend that kind of money to earn a few dollars doing data entry. Im merely taking their forms and info and keying it in for them and having it filed under their own names. They really dont need to spend a few hundred at the big tax places for such basic tax filing. They just lack computer skills or don't feel smart enough to read and answer the questions correctly. I just feel $25 to provide the laptop, my time and data entry skills isn t worth me becoming certified. Is this illegal. I d have have no problem adding that to my income at tax time the following year, I just dont know if its illegal or not and havent really found a good answer through on line research. Thanks
Best Answers: Can I charge to help people file their taxes?
Zephania | 10 days ago
About 98 percent of the states all you need to do to prepare a tax return is get a P-Tin. Even if you do not sign off as paid preparer, yes you still need it. You would be assisting in the preparation at least substantially all of their US federal tax return. It is 63.00 dollars fee, not a prohibitive expense.
Some states like California and Oregon have their own requirements for licensing that could make what you are doing illegal in your state. If your state does not regulate tax return prepares the only requirement to do what you are doing is to have a P-Tin. You might be able to get away without one if you worked under a CPA or an Enrolled Agent who did the work and signed off as paid preparer, and all you did was key stroke it in. However, on your own you need a P-Tin.
"A PTIN must be obtained by all enrolled agents, as well as all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of any U.S. federal tax return, claim for refund, or other tax form submitted to the IRS except the following:" List of exceptions is found on the link but no form of 1040 is on the list.
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Originally Answered: How to file taxes if I am a non-citizen business owner?
The process for this, starts with step 1: Get a very good CPA on the advisory board for this business.
Yes she will have to file taxes, the CPA will explain what needs to happen to stay fully compliant with the authorities. Also after you find the a good CPA ask for a referral to a good attorney, just-in-case. And get to know that person as well.
Those two people are critical to the success of the business and therefore that task should be taken seriously.
Im not signing my name. I'd need a PTIN # for that. And regardless of who signs off, the tax payer is actually the one responsible for their taxes.
Maybe I should just get certified and charge enough to cover those fees. I just wanted to know if doing the data entry for them in the manner I've mentioned is illegal.
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No, you don't need to be formally certified, but you will have to sign off on their tax return and be responsible for what it says. I wouldn't sign off on something unless you know it's 100% correct - if you do something shady and the return is audited, you'll be equally or more responsible. Only accept simple returns from people you trust as a result.
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By law, if you charge money, you must sign the return, get a PTIN and cannot use end-user software.
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Originally Answered: HELP! I just got something in the mail saying I didn't file 2005 taxes?
First of all, relax. I've known a few people in your situation. When we're young, taxes often just don't occur to us.
What you need to do first is sit down and think about your employment history carefully. Draw out a timeline as well as you can. Then, when you've determined the places you probably worked at during the 2005 year, call them. Say you need to know a contact number and name of whom you should call for human resource information. Then call those numbers and tell them the truth without getting into details. Simply explain that you've been contacted by the IRS and now need either a payroll summary for the year for you or a W-2. Some employers can get W-2s from previous years, and others cannot. Also, some may charge you a processing fee, so be prepared.
If you're not sure about where you worked, ask friends and family to recall to you jobs you've had- they may trigger a few you hadn't remembered. Then, even if you're not entirely sure you worked there in 2005, call anyway. If you're polite and ingratiating, people are inclined to help you. Ask them if they could possibly give you your dates of employment with them.
Once you have all of your information, download or print out a 1040-EZ from 2005 and fill it out just like you would for any other year, using the information you've gathered. Your notice will likely have options on it that you have to check. One will be attaching an overdue return. You'll likely have to pay penalties, but if you don't owe taxes otherwise, your withholding will probably cover them.
If you're too overwhelmed and/or anxious about it and you have a little money to spare, call a local CPA. In our firm, partners will often pass along simpler projects to staff accountants, who bill at a much lower rate. They can guide you through the entire process and make sure it gets done properly.
Good luck. :0)