A tax preparation business is a perfect opportunity for a WAHM. There are very few expenses--most will be covered in your initial startup costs--and it is a seasonal job, from January to April, allowing you more time to spend with your family. Here are some tips you should think about when starting out on your venture.
Tip 1: Get Trained
Anybody can do their taxes. Thousands of Americans do their own taxes every year. You don't need any special skills to file someone else's taxes. However, there are some skills that will be helpful to you. If you have experience as an accountant or CPA, you already have the skills needed for your tax preparation business. If you don't have such experience, consider taking a tax preparation training course.
Tip 2: Get a Business License
Many state and local governments have laws about what sorts of businesses need to be regulated by the government. Check with your local laws to determine if you will be required to get a license for your business before you begin.
Tip 3: Obtain Business Liability Insurance
In addition to looking into a business license, you will want to consider getting liability insurance. A mistake in this business can mean a lot of money, and so it's best to protect yourself from liability.
Tip 4: Decide about Tax Preparation Software
Tax preparation software is not required for your business; however it can make you look more professional. When showing off your work to prospective clients, it helps to have nice, printed copies to show rather than hand-written forms with mistakes covered over with white-out.
When choosing software, keep in mind that tax preparation software can vary in costs, depending on its features. Also remember to choose a software package that includes the forms of your state.
Tip 5: Sign Up for E-Filing
Many of your clients will request you to file their taxes electronically. The IRS offers incentives to file electronically, such as a speedier return. Since the only way to file electronically is to register through the IRS, make sure to do so if you wish to provide this service for your clients.
Tip 6: Consider What to Do with the Rest of the Year
While there are advantages for a WAHM for working only during the tax season, it can put a hardship on your finances. For some ideas on ways to earn money for the rest of the year, consider the following ideas:
- Help prepare quarterly returns for freelancers. Since freelance employees do not have taxes taken out of their salary, they are required to send the IRS a fourth of their expected taxes four times a year.
- In addition to freelancers, businesses also file quarterly. If you manage to get businesses as clients, you can make money year round.
- Sign up to be an enrolled agent to advice taxpayers who have been audited by the IRS.
- Provide year round consultation for anyone with questions about taxation.
People will always need to pay taxes. Therefore a tax preparation business will always be in demand.