Unfortunately tax season isn’t year-round. While you can still bank on the fact that some people missed the deadline and will still need your help filing returns, filing for an extension or amending returns, this most likely won’t carry you through to next year. How do other tax professionals generate revenue? They diversify.
Diversification means you need to learn how to do more than just taxes. There are a good number of options out there for tax preparers. Here are some of the most common.
Bookkeeping services are great to add because they are a year-round necessity. If you are already preparing taxes for the business, bookkeeping could be an easy add-on. Conversely, you may acquire clients for your bookkeeping services that may become tax preparation clients as well. Becoming a bookkeeper requires
Certification and bookkeeping knowledge can be acquired by taking a course such as the one offered by the National Association of Certified Public Bookkeepers.
Bookkeeping software will also be needed such as Intuit’s QuickBooks, which is the standard used by most bookkeepers.
Another great service to add for business clients is payroll. Intuit offers great payroll solutions. You can find out more about Intuit payroll products here.
Chances are your clients are already asking you financial questions that go beyond taxes. Adding financial planning to your list of services will help deepen the relationship with your clients and generate more revenue. Unless you provide only fee-based financial services, you will need to obtain securities licenses and have a relationship with a broker-dealer such as HD VEST which specializes in working with tax preparers. You can find more info on the American Institute of CPAs website.
Becoming an Enrolled Agent (EA) grants you unlimited representation rights before the IRS and the ability to represent your clients on any matter. Without the EA certification, tax preparers have limited representation rights. This means that tax preparers who are not EAs (called “unenrolled preparers”) can only represent clients whose returns they prepared and signed. The Income Tax School offers EA Exam prep resources that will help prepare you for the EA Exam. More on taxpayer representation can be found at IRS.gov. You should also become educated in the Taxpayer Representation process by taking courses such as those offered by the National Association of Enrolled Agents (NAEA) National Tax Practice Institute.
Some less common areas of diversification are:
Outsource Tax Preparation
There are many accounting firms out there looking to outsource tax preparation for their clients. This could be a great way to add additional revenue.
Real Estate Brokering
Real Estate can be another way to diversify and add a revenue stream. Real Estate Brokers are educated beyond the agent level as required by state laws and have passed a broker’s license exam. Brokers can work alone or they can hire agents to work for them. More on becoming a broker here.
Similar to becoming a real estate broker, selling insurance on behalf of the major insurance agencies is another option.
ACA Insurance “Navigator”
With the Affordable Care Act in full swing, there is now an option for individuals to become brokers or agents for the Affordable Care Act Health Insurance Exchange. More information can be found here.
The Income Tax School actually came from a need to diversify and produce more revenue. At our sister company, Peoples Tax we were already hiring and training our own tax professionals and so we decided to offer our training to a broader base. You too can offer tax education. We offer turnkey solutions to recruiting and training tax preparers. Find out more about our tax education options on the ITS website.
We’d love to hear from you. What have you done to generate off-season or year-round revenue?