- 3 Considerations When Starting a Tax Preparation Business
3 Considerations When Starting a Tax Preparation Business
Thanks to an ever-growing set of standards set by the Internal Revenue Service (IRS) and the influx of new businesses, the tax preparation industry is proving to be more lucrative than ever. With preparers having the opportunity to make at least $100,000 per tax season, the idea of diving head-first into the industry is guaranteed to be more attractive over time. Now that big and small businesses have the opportunity to get themselves out there with tools being made available left and right, there’s no better time to set up a tax business than today.
A few factors to consider before starting your new business
Now, while it’s a good idea to start your tax preparation business, it’s worth noting that you’ll need to cover a few things before you get everything up and running. In the sections below, will share an outline of different tips and tricks that you can use to get your practice started on the right foot towards success:
Tip #1: Get your legal documents out of the way
Before you even forecast situations and advertise your tax preparation services, you’ll need to first take care of your legal requirements. When it comes to dealing with said requirements, you’re looking at a host of paperwork that you’ll need to handle as you go through the whole filing and writing process. Let’s look at the most critical documents that you’ll need to prepare so that you can get all the different formalities out of the way:
- Your business license: The business license is the first piece of paperwork that you’ll need to take care of because you won’t be able to operate without it. If this is your first time applying for the license in question, you can take care of the application process online, but you’ll still have to submit some files in person.
- Your Preparer Tax Identification Number (PTIN): Once you’ve taken care of your business license, you’ll need to go through your first brush with the IRS by applying for a PTIN that will allow you to start paying for tax. This specific number is critical because it officially recognizes your tax preparation business as a tax-paying entity!
- Your IRS Electronic Filing Identification Number (EFIN): After you receive your PTIN, you’ll have the opportunity to make things easier for your tax preparation business by getting an EFIN. With this piece of documentation, you’ll have the privilege of e-filing your tax returns instead of in-person submissions and appointments.
Tip #2: Get your marketing campaign set
Considering that the American tax preparation industry is something that grows even more competitive each day, it’s best to assume that every effort you make to stand out will serve you best in the long run. Building your tax preparation business alone won’t suffice when it comes to seeing significant profits because you’ll first need to have businesses know about you. By identifying your ideal client, establishing your chosen demographics, and laying the groundwork for your digital marketing and SEO efforts, you’ll get your leg up over the competition before you begin!
Tip #3: Invest in solutions that can streamline your process
If you want to provide your tax preparation business with the best shot at success, it’s best to understand that the difference between winning and losing lies in how well you streamline your processes. Whether it’s something that can minimize the amount of time you spend on a project or something that makes it easier to access needed information, if something can make your processes easier, then it’s worth buying. For instance, Keystone Tax Solutions’ professional tax software for tax preparers will allow you to work much more efficiently without missing out on opportunities to best serve your clients with quality work!
Although it’s clear that there’s no better time to start a tax preparation business than today, it’s worth noting that you’ll need to make a few preparations before making your first strides. Thankfully, keeping the three tips mentioned above in mind will allow you to make well-informed decisions so that you can give your firm the advantage it needs to attain much-deserved success! With tax season around the corner, it helps to have the best professional tax preparers software
to help you support your customers as they partake in the digital switch. Get in touch with us today to learn more about how our top-level solutions can help with your tax preparation business!