How to Start a Tax Preparation Service

Filing tax returns and dealing with the IRS often causes undue anxiety for many Americans. To alleviate that anxiety, many people opt to have their tax returns prepared by an educated, experienced professional. If you are an experienced tax professional, you could benefit by starting your own tax preparation service.

Things You'll Need

• Accounting software
• Computer
• Paper
• Printer
• Business phone
• Business phone number

Instructions

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

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. 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.

Tips & Warnings

• Ensure that you are ready for the challenge of starting a tax preparation service. While you may be busy all year round, you will find that tax season is hectic and can prove stressful, requiring you to log long hours at the office.

• If you really want your tax preparation service to take off, provide your clients with superior customer service, which means returning their phone calls promptly, answering any questions quickly and providing quick turnaround.