Important things to know about Tax Preparer Bond

The California Tax Preparer Bond also called the CTEC Bond is a guarantee that protects the clients for the services of tax preparation that you give. If the client faces any financial harm due to the misconduct or unlawful activities, they can file a claim on your bond for compensation. You have to pay all the costs including legal expenses when clients file any claim. Not only the clients but also the employees working under you are also covered by the bond.

FAQs regarding Tax Preparer Bond

  • What is Tax Preparer Bond?

The California Tax Preparer Bond is a surety bond required for the tax preparers to be licensed. This ensures the tax preparers follow the rules and regulations of the industry.

  • Who needs this bond?

The State of California Franchise Tax Board states that anyone who takes a fee to help or prepare the State or Federal income tax returns must registers as tax preparer must have to secure this bond.

  • How much does this bond cost?

The California Tax Education Council has set the bond amount as $5000. You don’t have to pay the full amount. It is possible to get bonded at $100 at instant purchase. The pricing of the bond is a percentage of the bond amount. This percentage depends basically on the personal credit.

  • What does this bond do?

The Tax Preparer Bond is a protection given to the client against any kind of fraud or wrong doings by the tax preparer. Any financial loss of the client due to some unlawful act of tax preparer can be claimed on the bond. It is not an insurance to protect you but the clients.

  • What is the process to get the bond?

It is possible to secure the bond online by getting approved, submitting the indemnity agreement and paying for the bond.

To get the license to become a tax preparer in the State of California, you must secure the surety bond. You need to have the bond and then register yourself. The bond must be obtained before completing the tax course and receiving the completion certificate.

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