According to a popular saying, death and taxes are the only two things that are certain in life. Every single person who earns a penny in the United States needs to pay taxes – no matter what the state of the economy or how much the individual or business earns. Fortunately for you, the average person out there struggles with the complex tax regulations and not everyone is good with numbers. Preparing small business taxes can be a minefield of trial and error and enormously time consuming, and a lot of people just don’t have the time. So, as a business model, operating your own tax preparation business from home is a pretty good one. Your overheads will be low and your earnings high. Here is a little step by step guide on how to start a tax prep business from your home.
- Get an education. It’s extremely important to be well-versed in the processes involved in preparing taxes. It’s also incredibly important to be knowledgeable of the laws and regulations that have a tendency to change over time. There are a number of courses at community colleges and universities that will give you this knowledge as well as the all important piece of paper to prove it.
- Register with the IRS. One of the first things you need to do when setting up your tax prep business is to register as a tax preparer with the IRS. You’ll receive a Preparer Tax Identification Number for your efforts, which will mean you can get down to business immediately. Be sure to register your business name and print up some business cards to promote your business too. This will give your business the appearance of a legitimate, professional service right from the get-go.
- Consult a professional. When it comes down to it, there can be a lot of number crunching involved when running a tax prep business. It’s worth consulting a professional for advice, and when it comes time to prepare your own tax return, employ someone like Benham, Miller and Harris, Inc.. They could give you invaluable tips on how to efficiently prepare yours and other people’s taxes.
- Get the right software. If you’re still scrawling everything down by hand in ledgers, you’re wasting valuable time and energy. There are a number of fantastic bookkeeping and accounting programs now available that take out a lot of the hard work when preparing taxes. ProSeries is a great example of this.
- Have an office space at home. Although you’ll be running your business from home, you want to make sure you have a clear barrier between your workspace and your living space. Things can get messy pretty quickly otherwise. So stop working from your dining room table and convert the spare room into an office space. Make sure you a have a phone line devoted to your business so the kids aren’t picking it up too.
Market your business. Keeping your business close to home to begin with will give you a little more wriggle room to take your time and learn from your mistakes, so work for friends and family at a discounted rate to begin with. From there, you’ll find that the word-of-mouth will bring new customers your way, but be sure to keep exploring your local community for businesses that suit your target market, starting with smaller businesses and working your way up from there.