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California Tax Preparer Bond

With nearly 40 million residents, California has a lot of taxpayers. So it comes as no surprise that demand is high for tax preparation assistance all across the state. Most people who plan to offer tax preparation services in the Golden State will need to meet a few obligations first, including getting a California tax preparer bond. How to and why get this surety bond type are all explained below.

What is a California Tax Preparer Bond?

A CA tax preparer bond is a legally binding agreement that makes someone liable to follow all California state rules applicable to tax preparers. Someone who does not follow those rules, resulting in financial losses for a client, must compensate the client for the damages. The easiest way to illustrate how tax preparer bonds hold someone accountable is to outline the three parties in the bond agreement:

  • Principal – The tax preparer who is liable to pay for all valid claims.
  • Obligee – The client of the tax preparer. The obligee may file claims against the bond for compensation equal to the losses caused by the principal.
  • Surety – The bond company. The surety will settle claims with the obligee when the principal can't or won't, but the principal must promptly repay the debt with interest and fees added.

California Tax Preparer Bond Requirements

The California tax preparer bond requirements set the minimum coverage amount for the bond at $5,000. That means the surety agrees to pay up to (but not exceeding) $5,000 for claims caused by the principal (the tax preparer). Bond coverage terms can vary from one year up to four years. Someone will need to keep their CA tax bond active and in good standing for as long as they continue to offer tax preparation services, meaning the bond will need to be renewed when the coverage expires, or else it becomes illegal to work.

California Tax Preparer Bond Cost

The cost of a surety bond is only a small percentage of the coverage limit. In this case, the bond may cost as little as 1% or less of the coverage limit per year, and there may be the option to pay for a longer term that includes multiple years of bond coverage. Work with Viking Bond Service to get competitive bond offers and terms from multiple bond providers serving California.

How to Get a California Tax Preparer Bond

Unlike other surety bond types that involve an application process and a credit check, many bond companies will offer tax preparer bonds for a standard rate. Simply pay the premium to activate bond coverage immediately. That makes getting one of these surety bonds quite easy, especially since the cost is not especially high either.

Just keep in mind that getting a surety bond is not the only requirement to become a tax preparer in California. There's also a 60-hour course someone must complete from an approved provider. Make plans to get a California tax preparer bond around the same time the course concludes.

Viking Bond Service for California Tax Preparer Bonds

The choice of a bond company matters, especially for California tax preparers who will need to have a bond for their entire career. They don't just want a bond provider—they want a bond partner, which is what Viking Bond Service strives to be. Rely on us to get a bond that complies with all the California tax preparer bond requirements. You can also use us as a resource for information and answers to your questions. Contact us or call 1-888-2-SURETY (1-888-278-7389).

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