- Personal Finance
A Simple Guide to Starting a Tax Preparation Business
There are already a number of tax preparation businesses in the market today. Considering opening one of your own?
Here’s a simple tip to get you started.
In order to have a tax preparation business, you have to know how to prepare taxes. If you’re a CPA, this can be easy for you having the right knowledge and skills. However if you’re not a CPA, you can help yourself by studying about tax preparation. You can begin with getting tax preparation courses. You can enlist in classes with the IRS and other accredited schools or check some online courses.
After equipping yourself with the right tools, you can either set up an office in your home or be part of a franchise. There are Tax preparation services that you can franchise for a fee. Consider which option suits you by thinking about the pros and cons of being part of a franchise or working at home.
You can get a Professional License through your individual state government and Accreditation through a test with the Accreditation Council for Accountancy and Taxation (ACAT).
Later, check the IRS website and know the forms, instructions, schedules that you'll need for your tax preparation business. Advertise your services and location so people will know that you are offering your services for a fee.
To make it easier for you, you can also use Tax Preparation Software such as TurboTax. This makes you more professional and costs less in the long run by being able to e-file the taxes that you prepare for your clients. This also ensures that you can have backup copies of the prepared taxes and minimize the mistakes that writing on paper can be prone to.
You can set your fees by observing the big franchises and see how much they are charging for a single persons tax preparation. You can interview some work-at-home tax preparers and learn how much they are charging per customer.
Normally, your fees can be determined by the complexity of a persons tax situation and how many pages you have to prepare. You can make around $1800 to $7200 a month depending on the number of clients that you can service and the complexity of their tax situation.