It should be no surprise by now that the 2014 tax season will be delayed by up to two weeks. For tax preparers, this means that you will be losing out on two week’s worth of revenue until the tax season starts. As a tax business owner, where will you get the money to finance expenses like office occupancy, payroll, marketing, supplies, etc. in January? If you have not yet prepared for this delay in revenue, we’ve got some tips for staying on your feet and financing your expenses in January.
One of the biggest expenses in running a tax office is staffing. Since the filing submission date has been delayed, your early business will most likely be non-existent. This means that you won’t need to operate with a full staff. You can do a few creative things to reduce payroll expenses:
- Shorten operating hours
- Reduce staffing
- Delay the start date of new hires
Although returns cannot be filed until the first day of IRS e-filing (probably February 4th), you can still encourage clients to come in before that date to have their returns prepared. Send out an email to past clients and offer a discount on services for having their returns prepared in January. This will bring in January revenue and allow some of the filing paperwork to be done early before the official filing date.
There are a few ways you can defer expenses until you begin to collect tax season revenue. Here are a few suggestions:
- Tax Software providers will work with tax preparers. Contact yours to see what can be worked out.
- Your landlord may agree to defer 1-2 month’s rent.
- Pay bills & make purchases with credit cards after statement closing dates.
- Delay first seasonal payroll period ending date (possibly a 3 week instead of a 2 week pay period).
- Defer owners’ salaries until February or March.
If the above ideas won’t help you get through January, perhaps you should seek some financing. Here are a few ideas:
- Use credit cards and take advantage of low-interest balance transfer offers.
- Obtain non-bank credit lines such as Capital One.
- Refund Advantage, a bank refund transfer provider through its Fee Assist program is offering to advance a percentage of the ERO’s fees before the IRS funds your clients.
For more on running a successful tax office, check out our Tax Practice Management Tools or subscribe to our blog for more tips and advice.