When you want to enter the financial and accounting field, you will need a lot of preparatory work to ensure you have the skills and knowledge to excel in your profession. This can take time, sometimes years of education, to break into the industry, but it helps to know where to begin your journey.
There are several steps you need to take before becoming an enrolled agent, each step leading you to your end goal in the accounting and tax industry.
Be aware of your expectations and the level of education you need to complete to remain competitive in the field. Take the necessary amount of time to complete each exam and program to prove to future employers that you have what it takes to successfully complete your career goals.
Enroll Yourself In a Chartered Tax Professional Certification Program
The beginning of your journey should start with a Chartered Tax Professional (CTP) certification program. These courses allow individuals to study, gain experience, and advance their careers in the accounting industry.
Typically, CTP courses involve about 160 hours of course work, teaching the basics of tax preparation and offering a foot in the door of the industry. It lays the foundation of your knowledge and prepares you for a future in financial accounting.
You never want to skip your foundational training. While it may seem like it takes too long to complete, it is necessary to cover all the topics to set you up for success in the certification exams that will come.
Students can complete these courses in roughly 18 months, and these courses cover many topics you’ll find on enrolled agent exams, an exam we will discuss later.
Prepare for Your Enrolled Agent Exam
After you receive your education, your next step is to study for your enrolled agent exam. This test is what you will need to fully get yourself into the industry, allowing you to further your career and prove your knowledge and competency.
But before taking the test, you need to prepare for it properly. This goes beyond your certification and schooling, as the test may throw questions at you that your schooling didn’t cover. To guarantee your success, you’ll need access to an online accounting exam prep course. These online courses allow you to test your knowledge going into the test and identifies areas where to excel and where you struggle.
It provides a safe environment that fosters learning and prepares you for the real test when the time comes. Aside from critical knowledge, it also acclimates you to the enrolled agent exam itself, giving you the opportunity to know how institutions conduct the test.
Know What the Enrolled Agent Test Covers
The exam itself will cover several areas that accountants will need to be familiar with, testing their knowledge on each. The test contains three parts; each part is one of these aforementioned areas: individual, business, and representations, practices, and procedures.
The first of these, individuals, deal with taxpayers on an individual level. It will test your understanding of assisting clients to navigate through the identifying assets, income, and their tax filing status. You need to understand how to get preliminary information from the client and apply it to the financial documentation.
The second part, businesses, have you advising corporations. Whether it’s identifying corporate status, partnerships, or analyzing financial records, you’ll need to be an expert with corporations on top of individual clients.
Lastly, the final part tests your knowledge of best practices and the proper procedures to go about your daily job. This ensures you maintain a professional demeanor and that you can successfully aid any client you may encounter without accidentally engaging in illegal practices.
General Information on the Exam
As a side note, it’s essential to understand a few other aspects of the enrolled agent exam. Every section of the test contains 100 questions. You also don’t need to complete all three sections in one sitting; you can take breaks throughout the exam period to refocus your mind and offload stress when necessary. Generally, you have 15-minute breaks between each section, but this may differ depending on who conducts the tests.
Complete Your Enrolled Agent Exam
After you fully prepare yourself for your exam, the only thing left you need to do is complete it successfully. Once you receive your exam results and proper documentation showing you successfully passed your exam, you can register with the IRS.
Register Yourself With the IRS as an Enrolled Agent
As mentioned, you need to register with the IRS. To do this, you need to do several things; the first being to obtain a Preparer Tax Identification Number (PTIN). There are online forms you can download from the IRS website; you can fill them out and submit them relatively easily.
After completing these forms, you must apply for enrollment; to do this, complete form 23 Enrolled Agent application; this comes with a $63 fee. Once you finish these steps, your last hurdle is to finish a suitability check, which determines whether you filed the necessary taxes on your tax returns and that you have no outstanding tax liabilities.
All said and done, this process should take about 90 days to complete. Most of that time comes from the IRS processing your forms and information.
Never Slack In Your Education
Even after you get into the industry and start your professional career, you need to keep your skills and knowledge sharp. This means continuing your education, whether that means taking the occasional class as a refresher or going back to complete online preparatory examinations.
It’s easy for individuals to forget much of what they learned in the classroom, and that information is still valuable. You never know when you’ll run into a tax issue with a client, a situation covered in class, or something you forgot due to not experiencing it firsthand.
Knowing the steps you need to take before becoming an enrolled agent also applies after you become an enrolled agent. You will need to occasionally renew your certification, as this constant review will make it easier on you in the future.