How to start a tax business

Instructions

Things You'll Need:

• Tax preparation software Printer

1. Step 1

   Take a tax preparation course with one of the well-known tax preparation firms. Jackson Hewitt has a great tax preparation school that teaches you the basics and the more difficult points of doing taxes for individuals and businesses. The classes are usually free and you are only required to purchase books and software.

2. Step 2

   When you finish your tax preparation course and get your certification, buy tax preparation software that's made for professionals, such as TaxAct or Intuit (see "Resources" for suggestions) and install it on your computer.

3. Step 3

   Think of a professional business name for your new tax preparation business; feel free to use your own name as your business name as well. Your state may require that you receive a license in order to operate a tax business in your state (see "Resources" for a link to state commerce sites and licensing requirements).

4. Step 4

   Get a Preparer Tax ID Number (PTIN) from the IRS (see "Resources" for a link). This is the ID that you will use on forms when filing taxes for your customers.

5. Step 5

   Get an 800 number to help you handle calls from potential customers and to make you look like a professional tax business.

6. Step 6

   Start off your advertising efforts by tapping your friends and family. Tell them that you have passed a course to do tax preparation and charge them a deeply discounted rate. Tax preparation is a business that heavily relies on word of mouth and referrals; if you do a good job on your family and friends' taxes they will help spread the word about your tax preparation business.

7. Step 7

   Solicit customers for your tax services by posting an ad for your services on Craigslist, Angieslist and in your local newspaper. Design and post flyers about your tax preparation business at your local shopping centers and supermarkets. Place radio advertisements during tax season to publicize your tax preparation services.

1. Step 1

   Educate yourself. You don’t necessarily need a degree to offer tax preparation services, but you should enroll in a certification program or take courses to ensure that you have the knowledge you need to effectively and accurately complete tax returns.

2. Step 2

   Write your business plan, which will include what services you plan to offer. In addition to tax preparation services, you may also want to offer bookkeeping services.

3. Step 3

   Choose your business entity. If you’re not sure which business entity–sole proprietorship, partnership, Limited Liability Company (LLC) or corporation – is best for your particular needs, consult an experienced attorney.

4. Step 4

   Apply for the appropriate business licenses and permits, such as a zoning permit, once you’ve decided where you’re going to run your business, whether at your home office or at a rented office. You must also register your business name with your local government and/or with your state.

5. Step 5

   Contact your state's Secretary of State department to determine whether you are required to be licensed and bonded to run a tax preparation service in your state.

6. Step 6

   Set your fees. Start by researching your competitors’ prices then set fees that are competitive and ensure you will make a profit.

7. Step 7

   Offer a discount or a special on your tax preparation services to attract your first clients. For example, you may want to offer a "buy one get one free" deal, where you offer one client the preparation of a tax return at your normal fee while offering his family member or business associate completion a tax return for free.

8. Step 8

   Advertise your services by posting an ad in your local newspaper and on the Internet, by attending local events such as Chamber of Commerce meetings and through word of mouth. As your business grows, you’ll likely find that many of your clients will be from referrals.