The IRS is not restrictive in who may start an income tax preparation service, other than they require a person to get a Preparer Tax Identification Number (PTIN). To get your PTIN, go to the IRS.gov website, and it will direct you to the online application. It costs under $40 and takes about 15 minutes to complete the application to start a tax preparation service and receive the number. Generally, those having a felony conviction for tax fraud and other forms of financial crimes are not eligible.
A few states such as California have additional qualifications. If you want to prepare taxes in these states, you may have to take a test and register with the state licensing department. If you want to determine if your State is one of these, call the state department over licensing, or check it out online. They can tell you of any special requirements for tax preparation services.
Most municipalities require you to have a business license. This fee could range from $50 to hundreds of dollars. To research what it will cost you, search on “business license cost for (your city)”. In most cases, you can also complete the application online.
Contrary to a common misconception, a person need not have an accounting degree or be a CPA to prepare taxes. In fact, no specific education is necessary although it is a good idea to understand the basic definitions in the tax law before you hang out your shingle.
Though the income tax software does the hard work, a tax preparer should understand how to determine income tax status, who qualifies as a dependent, the process for calculating itemized deductions, and how to read the tax tables. With this simple knowledge and the help of software, a person can prepare more than half the returns they may be asked to prepare.
Nonetheless, the more income tax knowledge a person has, the more confident they will feel and the more returns they will be able to complete. Furthermore, the more complex a return, the higher fees, and the more income per hour a person will generate. For instance, a simple return may only generate a $75 fee. Yet, a more sophisticated return could earn hundreds of dollars and take less than one additional hour to complete.
The upfront investment, though not a qualifier, is among the lowest of any new startup. Other than the PTIN and business license fees mentioned above, the tax preparer needs a computer, printer, and tax preparation software. TurboTax and H&R Block, to name a couple, are not good software for the tax preparation business. With these individual packages, you will be limited in the number of returns, and your ability to complete all returns.
Instead, you will want a more robust package designed for professional tax preparers such as Intuit ProSeries, TaxWise, and Drake costing well over $1,500. These software packages are designed to be efficient, accurate, and for unlimited number and sophistication of returns. Take time to make the right choice, because you will likely want to use the same software for at least five years.
In summary, most people with basic knowledge of tax law and the help of a software package can thrive in a tax preparation business.
Starting up an accounting business can seem like an excellent idea, you understand the market and you have something in you that wants to push this forwards and make your idea a reality. The best advice we have is to not let go of that feeling. It can be hard in the current market to do, but if you do, you have a wealth of opportunity right in front of you (pardon the pun). We are here to show you exactly how to market and brand your start-up accounting business for free online.
The biggest deal for a new accounting business is their website. You have to be on point with everything otherwise customers will not trust you and go with a different server. Ensure that your links work, your pages load and that your instructions are clear. Have a no-nonsense voice for your brand that gets right to the point and answers the questions of people visiting your site before they even ask them.
If you can be ahead of the game with your website then you are halfway there. If you need a solution to be online, consider these template websites for accounting professionals. Ensure that everything on your website is cohesive. The colors, your business name, and your logo. Every page needs to be professional and relevant.
Ensure that the usability of your website is second to none. People want to understand the site without instruction. Setting up an account and using the site comes secondary, though is still supremely important. But first, you need to get your branding on point.
Create a brand that is professional, all-knowing, and approachable. Have a huge FAQ section with relevant questions and a brand voice that people can rely on.
Create a name for your business that evokes heartfelt trust while at the same time being strong and dependable.
Create a logo for your business that works in the world of finance. Choose colors that evoke trust, dependability, power, and thoughts of money. Use elements like triangles to show power and squares to show dependability. Make your logo so rich that it gets customers feeling like they can get wealthy just by clicking on it. Then use it everywhere.
We have access to an excellent logo creator with many templates and elements you can use; check it out at www.logocreator.io.
Be active in publishing your accounting business. Use social network sites as a springboard to gather people who are interested in the world of finance or small businesses that might want to use your services. Join Facebook groups and trawl LinkedIn for possible customs. Get Tweeting and try to get famous people responding to your tweets.
On your social pages, post content daily. You can create brilliant Infographics here, which can give information on finance and accounting to get more people interested in your business.
You should also get making videos. These can be a great way to access as many people as possible. Create short videos that capture people’s attention in the first two seconds. Brand them with your logo and keep them interesting, informative, and dependable.
Starting an accounting business will be stressful. It can mean a lot of hours on the computer feeling like you are getting nowhere. There is a lot of competition out there too, it can be a struggle to get yourself seen.
Do not give up. You can do this. But take breaks. Running a small business can take over and before you know it you are working longer hours than you did in the office. This is great short-term and you will probably love it, but after a while, it can take its toll.
Ensure you have days off per week and hours off each day to spend eating, exploring, and doing the things that made you want to set out on your own in the first place. This will shine through in your business management and is important.
If you are running a small business, you have the right to pay the required taxes and nothing else. In
fact, in most cases, your small business may eligible for tax exemption. Most small business owners
are unaware of these exemptions and end up paying more money taxes than required.
Being an entrepreneur, you should be careful and grab every tax-saving opportunity available
through deductions, credits, depreciation, and payroll-tax reduction. Instead of paying
unnecessary taxes, you can pay only the required ones and keep your profits.
Following are some tips to save more on your taxes:
1. Check with a Qualified Tax Advisor
You are new in the business and confused when it comes to the payment of taxes. This is quite
normal. Before you make any major decision, you are advised to consult a qualified tax
professional. It can positively impact the business's tax return and spending on un-required
Choose a tax consultant who is available throughout the year, especially at the time of the tax
payment. Hire an expert who can represent you and your small business in front of the IRC or the
tax authority in your country.
An enrolled agent might be the best option. These enrolled agents are designated by the IRS, and
they have qualified for a strenuous, three-part test, and they work for the IRC at the same niche.
2. Timing the Income and Costs
Timing is important for small businesses for their success. The timing of income involves the
movement of income from one year to another year. Firstly, select the year in which you aim to pay
the most in taxes.
Secondly, reconsider the current expenses before the year comes to an end. It is also advised to pay
a part of that amount so that the income of the current year is less than the expense. Also, a
business can increase its expenses and decrease income legally by making some expenditures,
including stocking up on supplies or paying the office utility or rental bills in advance.
3. Set Up a Retirement Plan
Setting up a retirement plan for yourself and your employees is an excellent way to save on taxes.
This can saves money on taxes. However, the retirement plan must be a qualified plan, so to gain
maximum savings on taxes.
For this purpose, the retirement plan must be recognized by the IRC to allow deferment on taxes on
the earnings till the earnings are withdrawn. These include IRA s and proper plans of contribution.
This is a normal practice done by most of the businesses these days not only to gain more from the
taxes but also to keep the employees loyal to the business.
4. Avail Tax Credits
Tax credits are exemptions from tax offered by the government if your business meets certain
requirements. It is a technique used by the government to reward individuals and small businesses
for good tax behavior. It encourages entities to pay taxes on time and follow good tax practices.
For example, Carpet Cleaning London takes tax credits for hiring employees, uses recycled
resources, provides access to disabled employees and the general public, and also provides health
coverage for the workers.
You can check with your local, state, or federal tax authorities to see what requirements are
mandatory to become eligible for tax credits.
5. Avail Tax Write-off on Equipment and Vehicles
Small business owners can take tax write-offs on the purchase of equipment, other machinery,
and vehicles. At times a small business can also take a tax write-off on the purchase/renting of
real estate property.
These write-offs can either be taken in the first year after the equipment or machinery is bought or
later. Did you know that the two basic types of accelerated depreciation are Section 179 deductions
and bonus depreciation?
This kind of depreciation is applied immediately when the machinery or vehicle bought comes into
This kind of depreciation is an extra benefit for the bought assets. From September 27, 2017,
through January 1, 2023, The TCJA also maximized this tax break from 40% to 100% of the cost for
assets when used.
6. Minus the Costs of the Gifts
A small business owner can also minus the costs of the gifts given to the stakeholders, including the
customers and vendors. This deduction can go up to $25 per person. However, an exception is
always there, for instance, for your business franchise.
Subtracting the costs of amusement or refreshment is a bit problematic if an entrepreneur shows
his appreciation by paying for quality time. These costs are not included unless the amusement
event t is directly related to the business.
7. Deduct Car Expenses
You can also deduct car expenses from your tax payments. What a wise entrepreneur should do is
that instead of showing the actual car expenses, they should only show the standard mileage rate
set by the IRS.
For 2012 the rate was 50 cents, and for 2013, the rate is 52 cents. A small business owner can
minus every mile that they drove in the car for business-related work, even if it is in their
Keep a logbook so that when claiming the deduction, it is easy to look at the total number of the
trips, areas of the trip covered, and what were the readings of the odometer.
8. Hire your Family Members
Hiring your family or friends in your small business can help the business owners to save a lot on
taxes. Instead of giving your family members or kids after the tax money, why don’t you hire them
in the business? Hiring them would be helpful.
They would do real work. For the tax year 2013, a business owner can pay them up to $5,900 per
year that they collect tax-free, and it gets canceled by the standard deduction. The owner might
pay payroll taxes for them since the business can expense the family members of the kid’s payroll
and minimize the taxes.
For small business owners, the above tips must help save money on taxes, but it is to be noted
that these tips are not intended to be tax advice in actuality. These are just the ideas that can help
them in saving more.
These are items to consider when working with your tax clients as their Professional Tax Preparersoffering quality accounting services.
Shaheryar provides ghostwriting and copywriting services. His educational background in the technical field and business studies helps him in tackling topics ranging from career and business productivity to web development and digital marketing.
The success of marketing for a tax preparation business is defined by the planning and organizing of that process. Your marketing strategy is as effective as your marketing plan. With the rising competition in this business, there is no more space for improvising and a lack of effort in a marketing campaign. You’ll need to dedicate yourself completely to forming a successful and thoughtful marketing strategy.
The first step is to coin the marketing plan. There are several aspects that you need to take into consideration while writing a marketing plan. If you want to create a plan that will present your tax preparation business in the best light, this is what you need to do.
1. Determine Your Niche
The marketing plan will be more precise and personalized if you know who are your target clients. Will you focus on individuals or small businesses?
Additionally, consider the type of services you want to offer. For example, you can emphasize working with law firms, service-oriented businesses or you can specify the type of tax preparation like individual stock purchase.
Narrowing down your niche will help you to create a marketing plan that will be personalized for a specific audience. Personalization in marketing is essential for attracting the attention of your target audience.
Spreading a generalized message will fall into the shadow of businesses that claim to be experts in the domain that the clients want.
Make sure that you write down the service you want to focus on and the characteristics of the target clients you want to attract. Marketing to the right clients will seal the deal much faster.
2. Set Your Goals
Having a clear goal will make your marketing efforts more direct and specific. Goal setting is one of the basic steps of writing a marketing plan. It motivates you throughout the process and gives your marketing plan a purpose.
Your goals can be:
Increasing the number of clients
Promoting new tax preparation service
Maintaining the satisfaction of current clients
These are just some examples of what your marketing campaign can focus on.
“Every business that wants to pull a successful marketing plan needs to set goals. The tax preparation business is no different. Goals need to be clearly defined and as specific as possible, so don’t hesitate to even put the number of new clients you want to bring into the business this year,” shares Amanda Willis, a marketer at TopWritersReview who worked on several marketing campaigns for tax preparation businesses.
3. Analyze Your Competition
There is so much you can learn by observing your competitors – both the good and the bad. Their work and marketing can teach you what actions bring positive results and what actions fail with your target clients.
When you analyze your competitors, these are some of the aspects of their business that you need to look at:
Type of clients they have
Services they offer
Marketing messages aimed at individuals and companies
Signs they use on their offices to attract street traffic
Write down in your marketing plan what works well to give your guidance but also write down what you shouldn’t do. You need to look at less successful competitors as well to notice the marketing tactics that you should avoid.
4. Think about What Makes You Different
Tax preparation falls into a large industry with many competitors who are trying to do the same thing as you – reach out to more clients and improve their business’s success rate.
To write a marketing plan, you need to know what makes you different. In order to define that, look your business from four perspectives:
Strengths – Ask yourself what are your strong sides. Do you have well-trained employees? A long history of satisfied clients? Think about what brings success to your business to identify your strengths. Are you and/or staff a certified Professional Tax Preparer?
Weakness – Knowing your weaknesses will help you to stay away from promoting less successful aspects of your business. You might be a new company with not many clients to support your credibility so you don’t want to put the focus on that.
Opportunities – If there aren’t many tax preparation businesses in your area that is one opportunity to focus your marketing on. There are many opportunities that you need to think through and identify if you want to promote the businesses in the right way.
Threats – Government policies regarding taxes or other tax preparation businesses near you can cause a threat to your marketing campaign. You might not be able to eliminate the threats but being aware of their existence will help you prepare better.
Based on the research you did on competitors, you’ll be able to pinpoint your unique qualities or think of a few new ones that you want to adopt. For example, have you considered offering additional related services such as accounting, bookkeeping, as well as business coaching services to complement your tax planning and preparation services? Perhaps now is the time for you to build the premier accounting business in your area! (see what you can do to follow a Turnkey Business Plan)
Write each one of these aspects down to have a clear idea of your strong and weak spots that will be the baseline for creating a realistic and efficient marketing campaign.
5. Define Marketing Channels
The marketing strategy needs to be spread across different channels. There are several options and you have to make a pick based on your goals. However, the more channels you use, the higher will the chances be for improving your business.
Here are some options for directing your marketing efforts:
Social media networks
Networking (attending conferences and relevant events)
A combination of some or all of these marketing channels is the most effective choice.
Finally, once you define your marketing plan you should keep track of the progress at all times. Writing a marketing plan is a task that comes to an end quickly, but applying the strategies you set demands consistent determination and dedication. Tracking the progress of your marketing plan is necessary for making corresponding improvements and adjust the plan based on real results.
Author’s bio. Daniela McVicker is a blogger and a freelance writer who works closely with B2B and B2C businesses providing blog writing, copywriting, and ghostwriting services. Currently she many authoritative sources, you can check her last review of Trustmypaper. When Daniela isn’t writing, she loves to travel, read romance and science fiction, and try new wines.
From a supportive spouse to now running a successful accounting business Steve Chase has a journey to share. Reflecting back to his youth he remembers as a Boy Scout enjoying the personal finance merit badge, who knew this was in his future.
Listen to Roger Knecht and Steve Chase as they discuss starting and building a bookkeeping business. Great advice, some tips, and tricks you don’t want to miss.
Hear what Steve feels we all need to know regarding our future roles in accounting.
Enjoy and remember this, if it’s about accounting, it’s Universal.
Get Trained in Small Business Accounting and Tax Services Call Today:1 (877) 833-7909
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