Starting a Tax Preparation Business

Nobody likes to do taxes, and it can be a particularly complicated task for those who own their own business. Although most of your prospective clients will maintain their own weekly bookkeeping, you can offer this additional service to those who want it.

To sell your service you should make a minimum investment in a Yellow Pages listing under “Tax Return Preparation” (or “Bookkeeping Service”), as well as placing small classified ads in your local newspaper. Personal visits to community retailers are helpful, especially if you have the time to strike up a conversation, mention what business you are in and leave a business card for the retailer’s reference.

A natural outgrowth of this business is, of course, individual tax return preparation. Most owners of businesses tend to use their business tax preparer for their personal returns. Although personal tax preparation is a seasonal business, it can be extremely lucrative. H&R Block has grown to become a multimillion-dollar business on this “seasonal” work alone.

People save their hard-earned money in their bank accounts, but the IRS is empowered to seize these assets practically at will. Given the option of fighting for the depositors rights or obeying the IRS, banks have little choice. Along with the bank levy, the Internal Revenue Service typically puts a freeze on the defaulter’s bank accounts. An interim period is provided within which the people who owe back taxes are permitted to contact the IRS and ask for leniency or seek a negotiated settlement through a tax preparation service. At this stage, guidance from an experienced and able professional at a tax preparation service can be invaluable. Also a tax expert has a better chance of arriving at an agreement with the IRS. If a mutually beneficial negotiation is reached, the amount owed might either be reduced or a suitable installment payment option arranged.

For your business clients you should set your rates so that you make at least $20 an hour. Since quarterly tax returns will come due for different clients at different times (because they are not all on the same fiscal schedule), you can plan your time accordingly. To keep your rates competitive, check the competition. Call a few of the bookkeeping or tax preparation services listed in the Yellow Pages and ask them their rates as if you were a potential client.

Your goal in this business is to establish a growing list of clients. But even as a solo practitioner, handling only the number of clients you can service by yourself, your income can easily top $50,000 a year. If you wish to grow larger, you could end up supervising an office full of trained staff members. Your initial investment to start this business need be nothing more than the cost of a supply of business cards and letterheads.

Read about Atlanta Bookkeeping also read aboutTax Preparation in Atlanta and Bookkeeping Service in Atlanta.

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