Why and how to start your tax business
In a shifting economy, self-employed people often have the greatest job security. You can establish a great new home-based business that can be part-time or full-time and even grow into a brick-and mortar business — the choice is yours.
Benefits of starting a tax business
When you have your own tax preparation business, you can work as much or as little as you want. You are your own boss. You can start out of your own home, with minimal expenses. You’ll also make a great income by adding many different services that can be easily integrated with tax preparation.
It’s easier and less expensive to learn taxes than you think
Many people shy away from taxes because they think it will be too difficult and you must be a Certified Public Accountant (CPA) or have an accounting degree. Not so. You don’t even need to have a college degree to prepare taxes.
The tax preparer software available today makes tax preparation a lot easier. That being said, tax preparer software is not a substitute for tax knowledge. Tax software is only as good as the operator using it.
The most important thing you need is foundational tax knowledge, which is available online, 24/7 right here at Surgent Income Tax School. Our Comprehensive Tax Course assumes no prior tax knowledge. After completion, you’ll be qualified to prepare individual returns for almost all U.S. taxpayers. No accounting background or degree needed, just a high-school diploma or equivalent. Many of our students finish in as few as 10-12 weeks. You need basic math and people skills; we teach you everything else you need to know.
High income potential
Millions of Americans pay a tax professional to prepare and file their tax return every year. As the number of taxpayers continues to grow, so does the need for qualified tax preparers who can help their clients claim all the credits and deductions due them and pay no more than taxes they owe.
The amount of money you can make will depend on your market and how easily you can attract clients. With a tax preparation home business, you will have very little overhead; therefore, you’ll be able to charge less than your competition.
As you improve your skills each year, your knowledge will increase and so will your revenue. You can also grow revenue through high client retention and referrals by marketing effectively and providing excellent client service.
Minimal start-up costs
Starting a home-based tax business can be done very inexpensively. Since you will have very little overhead, you can charge less than your competition and still make a great profit.
Home-based Tax Business Startup Costs (assuming you already have a computer and printer):
- Surgent ITS Comprehensive Tax Course, $497 – Updated for 2022 (add hard-copy book for additional fee)
- Note: A California Edition is available for those needing a CTEC-approved qualifying tax course.
- IRS registration to become a Tax Preparer (obtain a Preparer Tax Identification Number), $35.95 fee per PTIN application/renewal
- Tax preparation Marketing and Tax Office Supplies, $500
- Professional tax preparation software, $500 (depending on your chosen software; lower-cost options are available)
Additional revenue streams
Because most of your business is generated during the concentrated tax filing season from mid-January through mid-April, you could consider providing other services for your tax clients and generate income year-round.
- Bookkeeping and payroll services
- Financial services and products
- IRAs & other retirement plans
- Other opportunities
- Audit assistance
- Financial advisor
- Real-estate broker
These are great opportunities because as a tax preparer, you are already dealing with your clients’ financial data. Once you’ve built trust and rapport with your clients, it’s easy to offer them these additional services that will help bring in revenue year-round. Plus, your clients will appreciate having only one person to share their financial information with.
A tax preparation business is also great if you work in another field that is also seasonal — but at a different time of the year — such as:
- Real estate
- Yard care
Better than a franchise
Here are just a few of the reasons why starting your own business makes better sense than buying into a tax business franchise:
- No costly startup fees
- No royalty payments
- You get to do things your way
- No contract requirements
- No noncompete provisions
- No mandatory advertising fees that may not help your business
- No risk of unreasonable termination of your franchise
Guide to Start and Grow Your Successful Tax Business
This 319-page book is your go-to guide to getting started with a tax business today!
“One very important thing I have learned over the years is that there is no need to reinvent the wheel. This book is a practical, comprehensive guide that is beneficial for all entrepreneurs planning to operate as either a sole-tax practitioner or a tax business owner employing other tax preparers. Throughout this book, you will learn many best practices that will save you time and money, and help you grow a successful tax business.”
– Chuck McCabe, Founder, The Income Tax School