Keys to Starting an At Home Tax Preparation Business

Keys to Starting an At Home Tax Preparation Business
Page content

Why Tax Preparation?

Tax preparation is a service that everyone needs whether they work for a company, for the government, for themselves, or are attending graduate school or college. Taxes are also very scary for a lot of people! Tax preparation can be complex, time-consuming, and confusing with all the forms, the ever-changing tax laws and information about deductions. However, if you can get over the hang-ups that commonly plague people when it comes to taxes, you can make a viable profit - and do it at home! How? Read on.

What Do You Need to Become an At-Home Tax Preparer?

All you need to prepare other people’s taxes at home is:

  • A computer
  • Internet access
  • Tax preparation software
  • An understanding of how taxes work

Most likely, if you are reading this article, you have access to a computer and access to the Internet. Because you are dealing with sensitive information, people’s tax ID, social security numbers, and information about their personal finances, you will also want to be absolutely sure you have the best in computer security, virus protection, and anti-spyware software.

Once you have a secure computer and an even more secure and reliable Internet connection, you will require software to help you prepare the taxes. One of the most popular software programs for tax preparation is TurboTax, but do your research and find the best alternative for you and the clients you will serve. If you have different options for software, be sure to purchase the software that will do the most for you (i.e. don’t skimp, you’ll make the money back) - and keep the receipts for all the things you purchase mentioned here - as you should know, it’s tax deductible!

Now, there’s a fourth thing you need in order to get your at-home tax preparation business running. That’s the know-how. It’s possible that you are a CPA or have worked as an accountant. That will be enough to get you in the door and running. If you don’t have this experience, here are some tips on how you can get the knowledge you need:

Organizing Your At-Home Office

You will need a way to keep all of your clients’ information separate and protected. Unfortunately, I lied when I said you only need four things. You’ll also want locking filing cabinets, file folders, paper, tax forms, envelopes, labels, and more for your business. Go to your office supply store. Sometimes they have cards for businesses that give you discounts or allow you to have a business account for a low interest rate. Go crazy, not too crazy though, you will want to make a profit!

Once you’ve acquired all of your needed supplies, you will want to have a separate folder for each client you serve. Additionally, on your computer, you will want to organize your email to have folders for each of your clients. Make sure you keep accurate records of your accounts receivable (invoices), your expenses, and all other business-related transactions. You’ll need this information for your own taxes next year. Spending time organizing now will save you time later.

How Much Should You Charge to Prepare People’s Taxes?

One of the most difficult things about running your own business is determining how much you should charge. By running your tax preparation business from home, you can save on many of the overhead costs generally associated with running a business. Pricing can be a tricky thing too - by pricing your services too high, people won’t be able to afford to hire you and by pricing your services too low people may not hire you because they will wonder why your prices are so low.

The first thing you should do when setting your prices is call around for a moment and see what other people in your area charge so you can get a rough idea of what people are paying. Then, you can determine whether you will be charging by the hour, by the page, or by the project. Charging by the hour may be an option if you expect to deal with clients who will be involved. Charging by the page or by the project are both great options for simple, straight-forward tax returns.

How Will Others Find Out About Your Tax Preparation Business?

Unless you are Paris Hilton or Brad Pitt, you will need to publicize your tax preparation business through advertising and marketing. The first thing you should do is tell everyone you know about your business. You can use social networking to do this, or you can do this the traditional way through the phone or in person. You may also want to attend your local Chamber of Commerce’s mixers to network with businesses who may require your services.

Cold-calling is another way you can spread the word about your business, but only cold-call other businesses. You can look in your local telephone directory or on your local Chamber of Commerce website to get the phone numbers of businesses who might be interested in your services.

While there are many free and low cost avenues of marketing your home tax business, and for ideas you may want to check out Guerrilla Marketing for the Home Based Business, you may also want to invest in advertisements in your newspaper, telephone book, and local radio station.

You should start any advertising campaign well enough in advance before tax season begins. This way, you will already have potential clients who remember you.

Great Customer Service Will Make or Break Your Home Tax Business

Finally, when in a business that deals with the public, especially when you are in business for yourself, you must focus on providing outstanding customer service. People who have a bad experience with customer service blog about that experience, put that information on their social networking sites, and tell their friends. Likewise, people who were pleased with your service will shout that out to the world. Here are some tips on providing outstanding customer service for your tax preparation clients:

  1. Always do background research on your client, especially if the client is a business. This way, you will be more personable.
  2. If you provide a questionnaire asking about key areas that they will have deductions and income in, the client can prepare the information in advance for you.
  3. Even if your client has prepared information in advance for your meeting, make sure that you are familiar with their line of work and situation. Be prepared to suggest and ask about things they may not have thought of.
  4. Try to finish your preparations well before tax-time. This will give you a good reputation, because the earlier people file, the sooner they can get their refunds. If you tell your client you will have the return done by a specific date, always have it done on or before that date.
  5. Make sure to print an extra copy of the return for your client - even if he or she is filing electronically.
  6. Always return calls and emails promptly.