How to Start a Successful Tax Preparation Business?

Dec 2, 2022

Starting your own business can be an exciting prospect, but it can also be a challenging one. That’s why you need to start as early as possible. Starting a business requires time and patience and not everyone has this in abundance. 

However, doing so doesn’t have to be difficult if you know where to look for help. You just need to know where to look first – that’s what we’re here for! When starting your business it may seem like there are so many things that you need to take care of at once, but you don’t actually. 

The good news is that starting your own business doesn’t have to be time-consuming or expensive. Here are some great ways in which you can start a successful tax preparation business that won’t cost you anything:

What is a Tax Preparer?

A tax preparer is a person or business that helps people with their taxes. People hire tax preparers for several reasons such as not knowing how to complete their taxes themselves, not having the time to do so, or because they’re self-employed and need their taxes filed to file their business taxes. 

Tax preparation businesses are becoming more and more common, which is why it’s important to know how to start a tax preparation business. With more than half of all Americans having to file taxes, the growing demand for tax preparation services is only going to increase. Tax preparation is not a full-service offering; it is a service that is based on tax law, regulations, and published IRS guidance. 

If a tax law or regulation changes, then so do the tax requirements. If a published IRS guidance is removed or amended, then so is the information that tax preparers can use to complete their clients’ returns.

How to Start a Tax Preparation Business

Establishing Your Legal Business

Choosing a name for your business, registering your business name, and choosing the right business structure for your company are all important decisions that will affect your company’s success. If you have a specific business structure in mind, then you may want to consult a lawyer before registering your business. 

You may also want to consult a lawyer before incorporating your business for tax purposes. You may also want to consult a lawyer before making other important decisions about your company. The legal structure of your business will have an impact on your liability insurance, tax filing options, and the type of services you can offer. 

Your legal structure may also affect your liability insurance coverage. If your company is a limited liability company (LLC) or a corporation, you will likely have more coverage than if your business is a sole proprietorship or a general partnership.

Creating Your Website

You will be able to build your website at a minimal cost. You may also want to design your site, but you will need to learn how to code it, which can be a complicated process. 

If you are hesitant because you feel like you don’t know how to code, you can always outsource this task to one of the many web development companies that specialize in building websites for small businesses. A website is an important part of your business because it allows you to build a brand, attract potential customers and provide information about your services. 

If you currently have a website for your current or past business, you may want to transfer it to your new website. If you don’t currently have a website, you can build one for under $1500.

Soliciting Clients

You can also use networking techniques to find your first clients. You can also create an email list of your potential clients and regularly send emails to your list of contacts. You can also post content and images on social media sites to attract clients. 

You can also market your services online and offline, including at trade shows and conferences and through local advertisements. Finding clients can be a challenge, especially if it’s your first business venture. 

You can create a free marketing plan and strategy to help you better target your marketing efforts. If you want to target a specific demographic, you can use targeted online marketing, such as email marketing and social media marketing, to better reach your intended audience.

Contracting with a Non-Profit Organization

If you want to start a tax preparation business that serves low-income clients, you can partner with a non-profit organization. This can be a great way to get your business off the ground and earn money. 

You can offer your services for free, or you can charge a low rate for the work. However, you will most likely have to charge a fee for processing payroll taxes. You can partner with a non-profit tax preparation business.

Contracting with a Private Company

If you want to contract with a private company, you’ll need to find a business owner or owner-manager who will give you contracts. Once you have a contract, you will need to do the work. You will also need to meet their expectations, such as the quality of the work and how fast the work is done. 

If you want to contract with private companies, you can incorporate your business as a limited liability company or as a sole proprietorship. If you choose to form a limited liability company, you will need to go through the process of filing on paper with your secretary of state.

Benefits of Starting a Tax Preparation Business

The benefits of starting a tax preparation business are numerous and can include: 

Choose Your Work Schedule

You can choose to work the hours that work for you. You can work a 9-5 or 6-6 schedule, and have the flexibility to work from home when you want to. Tax season typically has a long season that lasts from April through mid-June, so if you want to avoid working during that time, now is your chance! Although the tax season is typically long and seasonal, you can also start your own tax preparation business year-round. 

Choose Your Tax Software

If you’re looking to start a tax preparation business, you probably like the idea of being able to choose your software. After all, the right software can make all the difference in the world when it comes to running your business. You can choose software that is easy to navigate and use so your clients don’t have to call in and reschedule appointments as much.

Set the Rate 

A tax preparation business is a great way to start a tax preparation business that allows you to set your rate. You should set your rate based on a percentage of your client’s refund.

Learn More 

Tax season is a great time to learn. As a tax professional, you’ll have the opportunity to learn a lot about your industry and clients. You can also take the opportunity to further your education by completing CPE or continuing your Professional Certification Program. Tax season is a great time to network. You can build strong professional relationships by meeting with other CPAs and other professionals in your industry.

Becoming a Professional Registered Tax Preparer

Once you’ve started your business, you can apply to become a professional registered tax preparer. This is a process that takes a few months to complete and is required to maintain a tax preparation business. To become a professional registered tax preparer, you need to meet the following requirements:

  • Complete a minimum of 32 hours of IRS-approved tax education courses.
  • Apply with the IRS, along with a federal tax return you’ve prepared or a copy of your tax registration. 
  • Pass a tax return review.
  • Pay the application fee.
  • Meet any other requirements as may be imposed by the IRS.


You can start your own tax preparation business and be your boss if you know where to look for help. By knowing how to start a tax preparation business and what you need to do, you can start your own business and be your boss. You just need to know where to look for help. 

Once you’ve done this, you can start your own tax preparation business and be your boss. The process can be challenging, but it doesn’t have to be difficult. You just need to know where to look for help.

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