Looking for a good way to supplement your regular income? You might see tax preparation as a viable option. And you’re right! It is a service profession that can easily be integrated with similar types of businesses, such as accounting, bookkeeping, financial consulting, management consulting, investment planning, insurance, and legal services.
The current climate of the tax preparation industry favors small businesses that can develop strong service relationships with clients. You can be a successful tax preparer if you are good at handling people.
The bulk of the job involves gathering information and processing tax returns. Fortunately, you can automate much of the busywork with the help of tax preparation software and office management tools. It may take you a while to learn the programs. But once you’ve learned them, you’ll be able to deliver the services expected of you with little effort!
That makes tax preparation an ideal business to run while maintaining a full-time job. You could even seek out clients among the co-workers at your day job! Possibly even your supervisors! Many people need help doing their taxes, after all.
Things to Know Before Starting a Tax Business
Although it is very possible to work a full-time job and also run a tax business, you need to assess how workable it would be for you. The demands of a tax business can be minimal, especially if you cater to few clients and use software to process tax returns. Nevertheless, you will have to invest your time and energy—so it had better be worth it!
Here are a number of factors that you’ll want to take into account:
- Time Management – If you are planning to retain your day job, you won’t have a great deal of time left for running your tax preparation business. Think about how you will manage your time while still satisfying your customers. Does that seem possible? Be realistic in evaluating your available time as well as your own time management skills.
- Expected Earnings – Do your research on what you can expect to earn from your tax preparation work. You’re starting a business because you want to increase your earnings. But will you be earning a suitable amount for the time and effort you’re putting into the sideline? Do your own cost-benefit analysis.
- Sleep – You want to deliver high quality services to your clients. That might be difficult to pull off if you’re not getting enough sleep! And your regular job might suffer, too! Some people can function well on little sleep. Does that describe you? It can be tempting to set aside sleep to give yourself more time for your tax preparation business. But you’ll be hurting your own business if you’re less than functional and you’re failing to satisfy customers.
- Health – If you’re a very healthy and energetic person, you will probably have no trouble working your day job and running your tax office business at the same time. But if the workload is going to affect your health, then you might want to reconsider your plans. Health issues can lead to medical expenses, which can negate any earnings you’ve made through your sideline.
- Compatibility – Does tax preparation mesh well with your current line of work? Now that’s a point that’s worth discussing in more detail….
Tax Preparation as an Add-on Service
Are you a service industry professional? Is your line of work aligned with finance, law, or business consulting? Then you can easily take on tax preparation work as an add-on service to your current business offerings.
Your full-time job may very well be the management of your own business. If that is the case, then tax preparation would not be a fully separate sideline for you. It would be an expansion to your existing services.
It could still feel like a different business, especially if your regular work is not closely related to tax return processing. But from the perspective of customers, it may be a positive development.
If you have cultivated a number of clients who trust you, they will probably be happy to trust you again to perform a different sort of professional service. Then they won’t have to go to the trouble of looking for someone else to do it. Someone they’re not sure they can trust. As they view you as reliable, they can surely be convinced to let you do their taxes for them.
Tax preparation can be easily added to services that cater to business owners and professionals. It may make sense to integrate tax preparation into your business if you are an accountant, bookkeeper, lawyer, financial advisor, management consultant, investment manager, or insurance provider.
Tips For Making It Work
Now that you’ve started your new tax business, what’s next? You have to adjust your lifestyle so that you can work two jobs?—and work them well. Here are some tips on how to do that:
- Step Up Your Time Management Skills – The most important thing you can do is manage your professional schedule wisely. You want to start doing this long before you get the new business up and running. You’ll want to use a day planner and a to-do list. You can get apps that offer such functionality. Make good use of them!
- Make Lifestyle Adjustments – Rethink the ways you’ve done things in the past. There may be other ways to achieve your goals that are less time consuming. For example, instead of going to the gym, go jogging or take the stairs whenever possible. Instead of cooking the usual way, get yourself a slow cooker so you can make meals while you’re away at your job!
- Work During Your Most Productive Hours – When will you be working on your tax business? That depends on when you are most productive. Try to reserve your most productive time for your tax preparation work. If you’re a morning person, you’ll want to go to bed early and wake up early, so you can work while you feel fresh and energized. If you’re more of a night owl, then do your tax preparation tasks after the day’s work, and go to bed late.
- Manage Your Stress Levels – Giving yourself more work can easily lead to greater stress. Be mindful of that possibility and plan ways to combat stress. Don’t overload your schedule and block out some time for rest and relaxation. Strive to create a stress-free environment at your workplace. Listen to music you like. Keep a picture of a loved one or a precious pet to look at when you need a lift.
- Avoid Conflicts of Interest – You don’t want to lose your regular day job, right? Anticipate any issues that may arise due to working two jobs at once. If you have a supervisor, you may want to be open about having a side business as a tax preparer. Who knows, you might even gain a new customer! Be aware of possible security issues. Keep files and documentation from different jobs strictly separate. You don’t want any costly mix-ups!
The Right Tools For the Job
Make it easy on yourself by getting equipped with the best tools you can afford. You will find running a tax office a lot more manageable if you have a software program that does much of the work for you.
UltimateTax will make tax return processing faster and simpler at no great cost. You will be able to impress clients with the quality of your tax preparation services! And you can be assured of getting accurate results?—UltimateTax includes diagnostics to help you to ensure that.
If you’re a new tax preparer, you will love how UltimateTax guides you through the completion of a client’s income tax return. (It can handle many types of business tax returns, too.) And the calculations are automatically performed for you.
UltimateTax even has an Interview Mode that can assist you when interviewing a client. Know what information to ask for and how you can frame your questions.