Looking For A Less Taxing Small Business? 4 Steps To Creating A Tax Preparation Office
If you're looking for a small business that doesn't take all your free time, income tax preparation may be exactly what the doctor ordered. With millions of American taxpayers needing to file and an increasingly complex tax code each year, seasonal tax preparers have a ready market of customers who need help. But, what do you need to tap into this constant market of clients for your new business?
Here are 4 steps to getting started.
Learn the Skills. Step one toward your business goal is to learn how to prepare income taxes for individuals (and perhaps for some businesses). While many people think that you need to be a CPA or other certified accountant in order to understand or prepare taxes, this isn't true. You can learn how to prepare through a number of classes available online or in schools and colleges. The IRS offers several different designations -- such as Enrolled Agent and those participating in the Annual Filing Season Program -- for preparers to show clients that they know what they're doing.
Set up a Business. Once you get close to opening your own tax prep business, you'll need to go through a few steps to become a legitimate business. Decide on a business entity setup (sole proprietorship, partnership, limited liability company, etc) and research its needs on your state's Secretary of State website. You'll likely need to register for an Employer Identification Number with the IRS and with state agencies if you will be hiring help. In addition, the IRS has some additional requirements for tax preparers, including creating an account for its services.
Find a Retail Space. To serve your clients, you'll need a visible office location where you can conduct business. Look for a retail space with good walking traffic and easy parking during the all-important spring months. Be sure to discuss your business plan with a real estate agent with experience in retail spaces. In addition to a busy location, you'll need a retail storefront that offers some privacy for clients meeting with individual tax preparers and a secure area to store sensitive client data.
Offer Off-Season Services. Paying year-round for valuable real estate space means you'll want to find ways to generate income in the off-season. Rather than seeing this as a negative, consider the slow season as a way to use your storefront to build relationships. In addition to doing prior year returns and handling client concerns, you may be able to offer additional accounting services like payroll, sales tax reporting, financial planning, or bookkeeping.
Starting a new business in a new field can be intimidating, but the advantage of a tax preparation office is that you won't be overwhelmed all year long... no matter how successful your new company is. So, you can help people manage their lives and their finances while earning a living and still having a life.