Thinking to start a home based tax preparation business but worried how to get prepared for that? Don’t worry; this post will be your guide for drafting a sample tax preparation business plan and setting up your business.
Perks of Home Based Tax Preparation Business
Starting your own business is always a great idea. This allows you to be your own boss and lets you work on your own terms and condition with no restrictions or requirement of permission to use your knowledge base and try something new. It brings a lot of freedom to your work but a lot of challenges too as you need to find a business idea which is lucrative and you can have a great career with that. The home based tax preparation business is one of the most in-demand business as every person or business in the country who earns needs to file tax. You can easily set up this business at your home and create an attractive career opportunity.
Along with being a lucrative business idea, the home based tax preparation business also requires very less capital to start. You need very less equipment like a computer system and little software along with few stationary’s to set up the business. So, you can use your capital in other areas like enhancing your skills, promotion of your business and others.
Potentiality of Home Based Tax Preparation Business
Every person and business who earns revenue needs to file tax. In United States, businesses need to submit their income tax returns on a quarterly basis. So, the scope of the business is huge. Over that, tax preparation is recession proof business. You may know that the tax preparation industry is huge, generating $9 billion in revenue by the year 2012. It is expected to reach the revenue to $11billion in 2018. Thus giving the home based tax preparation business idea has a great scope to be a successful one.
By starting a tax preparation business, you can earn a great deal of money during the first quarter of the year, or more specifically in two peak filing periods. The first period starts on the 2nd week of January that extends up to the last week of February. The second periods starts on the last week of March and continues till April 15. During these two busiest periods, a freelance tax preparer can earn up to $100,000 or more depending on his efficiency in tax filing and excellent marketing skills.
According to the U. S Bureau of labor Statistics, the national mean hourly wage for a tax preparer is $21.80 for the year 2016.
Percentile wage estimates for this occupation:
Source – U.S. Bureau of Labor Statistics: http://www.bls.gov/oes/current/oes132082.htm
Steps for Starting a Home Based Tax Preparation Business
So, here we will discuss the details of starting a home tax business and how to make it a successful venture. Below are the different steps to start your home based tax preparation business: –
The first and the basic thing that you need to start your home based tax preparation business is the skill. You need to possess a solid knowledge of the different tax laws and others to provide the service to your clients. Having particular degree like CA or in Accounts is an added advantage. However, they are not mandatory. If you have the skills, you can easily become a tax consultant.
If required, you can take courses from private institutions to learn the tax preparation process. This will not only enhance your skills but will also update you with the new software’s and laws.
Register your business:
Like every other business, you also need to register your business. Apply for the license from your local administrator and get all kind of required things. The process will not be a complex one. You can consult any local administrator to get the required information on the process.
For, registering with IRS and getting your Preparer Tax Identification Number (PTIN), you need to submit a duly filled application form at your local IRS office or apply online. You will need to apply for your IRS Electronic Filling Identification Number for preparation of e-file tax returns.
Make Business Plan:
For having a successful business, thorough research and preparation of business plan are very important. You need to do a lot of questioning to yourself and make the business plan out of that like: –
- How much capital is required to start the business?
- What is the different equipment and software’s required?
- Do you need to hire any assistance?
- How many clients do you need to have success in the business?
- How to attract clients?
- How to cope with the competition? And others.
So, these are the basic things that you need to include in your research and business plan. You need to do a lot above these to make your home based tax preparation business a successful one.
You can easily set up your business at your home. You just need a small place to start your work. You will also need a system and updated software’s to work. Even if you are starting your business at your home, it is better to have a separate place so that you don’t get any kind of disturbance during your work. It is very important to have a proper balance between your personal life and business in home based businesses.
Now as the business is properly set, it’s the time to attract clients. Start your work with family, friends, neighbors’ and others. Let the word of your good work spread across the area. Prepare your own business card and distribute to potential clients.
Effective marketing and promotion are very important in attracting clients. You can use social media to promote your home based tax preparation business and that is also at completely free of cost.
So, this is the complete guide to start your own home based tax preparation business. The best part of this business idea is that there is no need of huge investment to start this business. Your skill in the field will be your greatest USP to success.