How to Start Your Own Tax-Preparation Business at Home

how to do taxes at home

Tax software hasn't killed the industry of tax preparation by humans. If you have the skills for the job, you don't need to rent an office. An office at home with desk space for your clients' receipts and paperwork will do the trick. If you use it exclusively for business, you can write off some of your mortgage interest and utilities too.

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Research the Requirements

Even if you think you're qualified to prepare people's taxes, your state or local government may disagree. California, for instance, requires all tax preparers register with the state's Tax Education Council. Registration requires a 60-hour tax-preparation course from a council-approved provider; to stay registered requires 20 hours of continuing education a year. There are other requirements on top of that. Your state and local government websites should provide you with information on requirements where you live.

Apply for a PTIN

Federal law says everyone in your line of work needs a PTIN -- a preparer tax identification number. You can apply online at the IRS website. You'll need your Social Security number, name, date of birth, your previous year's tax returns and

you'll need to pay a $64.25 PTIN fee, as of 2014. If you have any felony convictions or back-tax problems, the IRS wants to know the details before deciding you're trustworthy enough for a PTIN.

Finding Clients

Once you prove yourself, word of mouth will generate business. Your first tax year, though, you're going to have work to find customers. Fortunately, having specialized knowledge has benefits. You can, for example, hold a free presentation or seminar on itemized deductions. Your local library or community center may let you use a meeting room. Attending local business networking events will help you find other self-employed people who'd love to have you take care of their taxes.

Budget Your Time

As April 15 approaches, you may get a flood of clients suddenly worried about meeting the IRS due date. You'll have to budget your time effectively to give them all good service. Be realistic when you tell clients how fast you can finish a return, and meet whatever deadlines you give them. If you discover you need more paperwork or information from a customer, call immediately. Don't let a backlog pile up on your desk.


Category: Taxes

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