Why Start a Tax Preparation Business?
It is not too late to get into self-employment. To be more specific, you could start a business that helps people and businesses prepare their tax returns. There are many advantages to starting your own tax business. First, you will work three months all through the year and make a lot of money. Hence, you will have summers and holidays to enjoy. If you start a home office, your expenses will be less. What’s more, a tax business will reduce your tax liability and unlock your freedom.
Things you will require
There are just a few things you need to start a thriving tax preparation company. These include the following.
• Office equipment. This includes a computer, printing machine, photocopier, scanner and fax machine.
• Tax preparation education, and expertise.
• Accessories like an internet router, office stationery, tax preparation software and other supplies you might want to sell.
• Electronic Filers Identification Number. The EFIN is an item you can get from the IRS for free.
• PTIN or Preparer Taxpayer Identification Number. Again, obtain this from the IRS.
• To get the annual Federal Tax Refresher Record of Completion, finish voluntary AFSP (Annual Filing Season Program).
• Marketing tools such as business cards and flyers.
As soon as you gather all the above items, you will be ready to start. It goes without saying that you need a room in the quietest part of your home to make an office.
Do you have to be a Certified Public Accountant?
No, this is just a myth. You do not have to be a CPA or a graduate accountant to prepare taxes. The only thing you need is a passion for counting. Your work will be more about the law than accounting. So, what do you really need? What you need right now is a quick tax preparation course. It should be a comprehensive foundational course in individual tax preparation. There is also an optional 6-hour AFTR (Annual Federal Tax Refresher) course that is greatly recommended by the IRS AFSP. It only entails 100-question competency test that assesses your taxation knowledge. In order to receive your Record of Completion, the IRS requires that you do twelve extra hours of continuing studies. To do business tax returns work, you have to enroll for a small business income tax course.
A home-based tax business is cheaper to run
As a starter, you can expect minimal start up cost. Your budget plan should include the comprehensive tax course cost, which is nearly $500. Next, you should include the cost of buying software, office supplies, marketing, IRS registration and miscellaneous costs. On Average, you will spend $2000 to start out a tax preparation business if you already own a computer and printing machine.
The profits you will make will depend on your ability to market your business and the availability of opportunities in your area. As a home-based business has little office overheads, you can charge less and get more business. If you are experienced, you can expect a hundred dollars per hour. As your business continues to grow, your income will increase too. Finally, get extra advice on tax preparation classes today.