California Tax Preparer Bond

Get Your California Tax Preparer Bond

Who is Required To Purchase a California Tax Preparer Bond?

Again, the California Tax Education Council (part of the Franchise Tax Board) requires tax preparers to register.

Just so you know, exempt tax preparers include:

• Certified public accountants
• Enrolled agents
• Fully barred attorneys
• Certain banking or trust officials

It is important to realize you must register even if you don't prepare customer tax documents, but only input customer data into a computer.

Essentially, if you have access to customer tax data with the ability to alter this data, you must register with CTEC and purchase this surety bond.

What is the California Tax Preparer Surety Bond Amount?

Each individual tax preparer must purchase a $5,000 tax preparer bond.

$5,000 is the amount of financial protection afforded to customers in the event a tax preparer purposefully and financially harms them.

Why is a California Tax Preparer Bond Required?

The registration process for tax preparers ensures that each individual has the appropriate education to perform the obligations.

And despite the registration process, there will be a small handful of tax preparers who commit acts of fraud like:

• Altering tax documents of a customer
• Charging exorbitant fees
• Charging false fees
• Providing legal or tax advice they are not allowed to legally offer

In the event a customer is financially harmed by a tax preparer, the customer can make a claim against the surety bond for financial compensation. However, this compensation can only go up the bond amount, or $5,000.

What Is The Cost of the $5,000 California Tax Preparer Bond?

The price to purchase the $5,000 tax preparer bond starts at only one payment of $45 for a 12 month bond term.

This is the benefit of using Surety Bonds Direct when you purchase your bond.

Because we use a network of multiple A-rated sureties, we're able to help you avoid the typical credit check associated with purchasing a surety bond.

A surety is an insurance company that underwrites these bonds. And each surety typically considers the following factors:

• The personal credit of the applicant
• Business and industry experience

But because we have a relationship with the sureties that specialize in tax preparer bonds, we can get you low pricing with no credit check.

How Long Does a California Tax Preparer Bond Last?

Typically surety bonds have a bond term or 12 months at which time they need to be renewed.

When you purchase your tax preparer bond, you have an option to extend that bond term to a 3 or 4 year term.

The benefits of extending your bond term are:

• Getting a small discount on the purchase price
• Not having to worry about renewing your bond until a further future date

And this is another great reason to work with Surety Bonds Direct. You get assigned a bond specialist and they manage this process for you.

As your bond expiration date approaches, your bond specialist will reach out to you 30 to 40 days in advance to make renewing your bond fast and easy.

Renewing is as simple as paying the renewal premium.

What Happens After You Purchase Your California Tax Preparer Bond?

Once you purchase your tax preparer surety bond, you can instantly download your bond to submit it with your registration packet.

CTEC does not need the original bond and will accept a copy as proof of you being bonded.

This allows us to automatically prepare and issue your bond once you complete your purchase.

Tax Preparer Bonds And Getting Your California Business License/Registration

The California Franchise Tax Board offers a great page to help you get registered. So refer to that page when you need to ensure you have all of the qualifications complete.

The process follows these steps:

• Take the 60 hour education course from CTEC
• Purchase your surety bond
• Get your Preparer Tax Identification aNumber (PTIN) from the IRS
• Go through California's fingerprint LIVE scans
• Pay the required $33 registration fee
• Make sure you renew your registration before October 31st each year