Tax Preparation Business from Home and Its Benefits
We sometimes characterize finance and accounting occupations as dull, dry, or too complex. But that’s just common with all kinds of jobs. Meaning, it’s not the numbers that make your work dry. It’s the constant investment of effort with no return. So, what motivates you to work with numbers? You do not have to work for anyone and can start your own business.
Tax preparation involves preparing and filing tax returns. The service is commonly for people who need help in preparing, managing, and filing their taxes. Tax preparers may also assist with general tax forms. These individuals are also eligible to defend a client in legal matters involving tax returns. Their goal is to act in the client’s best interests. At the same time, they are also legally obliged to obey the law and steer clear of fraudulent activity.
The biggest misconception surrounding tax preparation is that it’s for people who are good with numbers or those who have a background in accounting. You don’t need any of them to start your own tax preparation business. However, it would be best to acquire relevant qualifications and official permits to be legally fit to continue. Continue reading to note everything you need to know.
1. Acquire A Relevant Degree
A high school diploma or a bachelor’s degree in taxation is adequate to get you going in this line of work. But since you’re looking forward to starting your own business, it’s better to walk in prepared. Therefore, consider earning an advanced degree in taxation. After all those years of education, going for an advanced degree might seem like a lot. For your convenience, go for an online llm tax program. Obtaining your degree online allows you to have a flexible schedule and get it done within 18 months only! A master’s degree in taxation will render you all the soft skills and expertise necessary to pursue this career.
2. Apply For Your PTIN And register Your Business
PTIN is the acronym for Preparer Tax Identity Number. The IRS uses this number to identify tax preparers, and all individuals in taxation must obtain it. There is a specific fee that you’ll have to pay to process your application. It takes anywhere between 4 to 6 weeks to receive your PTIN. Moreover, you’ll have to take a qualifying course from a CTEC approved provider to be eligible to apply. The course shouldn’t take any more than 60 hours.
Every business needs to be registered to operate legally. Tax preparation businesses have a slightly different registration process due to the sensitive nature of the work. Go over your state’s requirements and register accordingly. You will likely have to provide several documentation and certificates for legal reasons.
3. Choose A Niche For Your Tax Preparation Business
Your education may render you with all the necessary proficiency to become a tax preparer. Still, it is essential to concentrate on one niche to execute your business. If you gather enough experience in a specific area, people will trust you for their taxation work in that domain. Common niches include insurance, bookkeeping, mobile tax, IRA legal matters, expert consultancy, forensic valuation, business taxation, etc.
4. Choose A Catchy Name For Your Business
Tax preparation is a business that involves dealing with highly critical information. You need to obtain your clients’ trust. But how will they trust you if they’ve never worked with you? Your business name will come in handy at this point. Come up with a creative yet strong name for your tax business that reflects your strengths. Either brainstorm for a few hours or use business name generator softwares for your convenience. Some examples are True Taxation, ProTax, First Choice Taxation Services, MyTax, etc.
5. Protect Client’s Data
As mentioned earlier, tax preparers work with highly sensitive information. The entire financial history, revenue and cost statistics, and other critical information are provided to you through utmost trust and consideration of the clients. If this data goes out, the chances are that the entire business will collapse. To prevent this from happening, you’ll have to take specific measures to protect your client’s data. For that, you’ll have to develop a data protection plan too. It is also a legal requirement.
Benefits of Running a Tax Preparation Business from Home
Suppose you’re still indecisive about whether you should go for a tax preparation business or not. In that case, there are countless reasons to do so. Firstly, you’ll have endless job security. The benefit of not working for anyone is that no one can fire you. Secondly, this is perhaps the only business where you won’t need to invest thousands of dollars in accumulating resources. It’s great if you can afford to have an office setup. If not, it’s okay! Moreover, you’ll be able to reduce your tax liability too. Lastly, the money you get at the end of the day is far more than any desk job in taxation can make. It’s like life insurance policies where you save and use it when needed.
Tax preparation is only dull because society makes us believe that it is. Even if it’s not like some hyped-up digital marketing business, know that it makes way more money. If you start your own thing in taxation, you get to be your boss. Luckily, becoming a tax preparer isn’t that hard either. All you need is a taxation degree, preferably an advanced one, a PTIN, and a knack for taxation!