Thinking about opening a tax business? It’s an option we challenge many of our students or Continuing Education Tax Practitioners to seriously consider. Starting your own tax business doesn’t have to have the overhead and restrictions of starting a tax franchise. It’s as easy as getting a business license and tax software to get yourself started. Plus, tax business ownership has lots of perks:
- Flexible schedule
- Minimal startup costs
- Increased income
- Reduced tax liability
- Be in control of your own destiny
If you think tax business ownership is for you, here are some things to consider to get your tax business off the ground and running.
Your level of education
If you’re starting from scratch and have never taken formal tax preparation training, you’re in the right place. The Income Tax School can provide you with all of the education you need through our Comprehensive Tax Course.
If you already have some education, make it a goal to gain more as your business grows. Learning to prepare more complicated returns beyond the standard 1040 forms will earn you more money because those forms require more of your time. Perhaps you live in an area with a lot of retirees or small businesses, you will benefit from being able to specialize in an area of the tax law that your surrounding market needs.
You should also consider an education tract to becoming an Enrolled Agent, the highest credential you can earn as a tax professional. Start by ensuring that you have your Record of Completion through the IRS. This ensures that your name is on the IRS website as a qualified tax preparer. Next, you might want to consider an education tract like our Chartered Tax Certificate Programs. These programs will teach you advanced tax preparation and will prepare you for taking the Enrolled Agents Exam.
Tax Software
Every preparer needs tax software in order to prepare and file taxes for the public. With all of the tax software out there, you are going to need to decide which one is right for you. You will need to take into consideration how many returns you expect to prepare (to decide between paying per return or paying monthly or yearly fees). You will also need to take into consideration the types of returns you will be preparing to determine the type of software you will need.
Check out our guide for more tips: How to Choose Tax Software
Set goals and have a plan
It’s important for any business owner to have a plan and set goals for success. This is something you really need to put time and effort into. Having a strategic business plan will set your business up for success and will be your map for future growth.
Strategic Business Plan Essentials
Location
Will you work out of a home office or will you need a brick and mortar location? Both are viable options but something you should be considering. Working from home might be too distracting depending on your situation, and a brick and mortar location might be cost prohibitive.
If you do decide on a brick and mortar location, the location you choose is very important. Taxpayers are looking for convenience and many times won’t travel out of their way to have their returns filed. Your office should be near the people or companies you are trying to market. Here are more tips on choosing a location:
Why You Should Work From Home (and Why You May Not Want to)
Tax Office Site Selection: 6 Things to Consider
Bank products
If you plan on offering tax preparation services to the general public, you should consider offering rapid refunds, or bank products. These services are not limited to the big national chains and can be made available to you by contacting the same banks they use.
How you will market yourself/your business
You can be the best tax preparer in the world but no one will know about you unless you market your services. Having a marketing plan is essential to success. This doesn’t mean spending thousands on t.v. or print ads. It means doing the research to know your target market and then using guerilla marketing tactics to spread the word within networking groups, online through social media or through local promotions.
The Ultimate Tax Season Marketing Checklist
DIY Marketing Tips for Tax Offices
Build and Grow Your Tax Business
How you will earn money after tax season
Tax season is less than half the year, which means if you’re not in the position to take that much time off, you’ve got to have a plan. The best ways to ensure year-round business is to make sure you are acquiring business clients who have to file their taxes quarterly. You can also offer IRS Audit and Offer and Compromise services but remember that in order to represent someone who is not your client before the IRS, you’ll need to have Enrolled Agent status.
Here are other ideas for earning income in the off-season:
How to Make Money Year-Round as a Tax Preparer
Keep Business Coming After the Deadline
These are all important items to consider before starting your own tax business. This list would be much longer if you chose a different industry! Starting a tax business can be a very rewarding career, or a great additional service to someone in the financial industry. The best news is, you don’t have to reinvent the wheel or develop your own systems, we have everything you need at The Income Tax School with education and turn-key business startup guides. Learn more about starting a tax preparation business on our website. You should also consider joining our LinkedIn Group, Tax Business Owners of America.
Further Reading
How to Start a Tax Preparation Business