How to Set up a Tax Preparation Business

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By: Editorial Staff
Submitted December 27th 2010 & consists of 458 words.
Located in our collection of taxes articles.

Read 1467 times

There are several tax preparation businesses in the market today. Thinking of opening one of your own? Here’s a list of steps to get you started.

To have your own tax preparation business, you have to understand how to prepare taxes. If you’re a CPA, you already have the necessary skill set to do this. However if you’re not a CPA, you can still do this by getting an education about tax preparation. It can all begin by enrolling in tax preparation courses. You can take classes with the IRS and other accredited schools or check some online courses.

After getting the education, you can decide if you want to work at home or be part of a franchise. Some tax preparation services offer franchise for a fee. Evaluate which option suits you by weighing the pros and cons of being part of a franchise or being able to work at home.

You can have a Professional License through your individual state government and Accreditation through a test with the Accreditation Council for Accountancy and Taxation (ACAT). As soon as you have time, check the IRS website and know the forms, instructions, schedules that would be helpful for your tax preparation business. Promote your services and location so people would become aware of your services for a fee.

Things can even be easier by using Tax Preparation Software such as TurboTax. This enables you to be more professional and costs less in the long run by being able to e-file the taxes that you do for your clients. This also helps you protect your files in storage by having backup instead of simply writing down in paper.

You can determine your fees by looking at 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. Usually, your fees can be determined by how complex a persons taxes are and how many pages you’ll have to fill out. 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.