It has never been a better time to start a tax business in the United States. As the saying goes, the only thing guaranteed in life is death and taxes, making this business recession proof. Starting a tax preparation business can be very lucrative and is a great way to earn additional income while only working part time hours. Many tax preparers make between $30,000-$100,000 in 90 days or less and many do it while working from home or being mobile. You can decide on starting a tax preparation business as a side-hustle, or as your main source of income. Here we will look at what the benefits are of starting a tax preparation business and some basic requirements for doing so.
Benefits of Starting a Tax Preparation Business
There are many benefits to starting your own tax preparation business. The first and biggest benefit is that it is easy to do! Tax businesses can be started quickly and without a lot of overhead. You do not need a big office or a giant IT network to get started. With a computer, some professional tax software and a few filings, you can get your business off the ground in no time. You do not have to be a college grad, be good in math, or have a CPA background to start a tax business. All you need is a little knowledge, some guidance, and some professional tax software. This is yet another reason this business is so attractive.
There are tax franchises you can buy into, but starting your own business is better due to the franchise fees, the enormous overhead, and the upfront money required. Due to these factors, you are better off starting your tax preparation business from scratch. As a tax entrepreneur, you get to keep all or most of your profits.
Requirements for Becoming a Tax Preparer
There are a few steps to starting a tax business, but first, you need to meet the basic requirements. The first part of starting a tax preparation business is obtaining a business license. This process varies by municipality so check with your local officials. Once you get this, the next step is to register with the Internal Revenue Service (IRS).
You will need to register with the IRS to get two different numbers for your newly formed business. These are your Preparer Tax Identification Number (PTIN), and you Electronic Filing Identification Number (EFIN) so you can e-file tax returns. These allow the IRS to know who is filing the tax returns and will be associated with every return you file from your business.
After you have that all set up, you will need to get some professional tax software. There are several different professional tax software packages you can find. What you need will depend on the size of your business and your tax preparation skill-level. A company like Keystone Tax Solutions can help guide you to the right product.
There are more steps to starting a tax business that will become successful and profitable. Hopefully, this has shown you that starting a tax preparation business is a great idea and that it is not difficult. If you are interested in taking the next steps and pursing this great business opportunity, the tax software professionals at Keystone Tax Solutions can help you find what you need to get started and start earning right away.
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