Ultimate Guide for New Tax Preparers

Chapter 1: How to Start a Tax Business

Since 2000, the business of tax preparation has been a lucrative one. The complexities of tax returns have driven individuals and businesses to seek out professional assistance. In 2019, 56% or 71,725,000 of e-filed tax returns were accomplished by tax pros.

Tax professionals can include Tax Preparers, Enrolled Agents, Certified Public Accountants (CPAs), and Tax Attorneys. They need to be registered with the IRS to file tax returns on behalf of clients.

Every year, people undergo training to become a tax preparer. They also register, and start their own business or get employed. Overall, the IRS issued 773,911 Preparer Tax Identification Number (PTIN) registrations and 360,000 Electronic Filing Identification Number (EFIN) registrations for the year 2019.

Employment of Tax Preparers Map

Graph from the Bureau of Labor Statistics

The top five states with the most tax professionals are California, Texas, Florida, New York, and Illinois.

Tax office work is annual in nature. The busy season runs from January to April of each year. In addition to the dedicated preparers, a fair number of accounting and law firms expand their services to include tax preparation.

Building a tax preparation business is easy. It has minimal start-up costs and a high return. It's also a stable career. If you've just graduated from high school and want to start a career in finance, becoming a tax preparer can be your first step.


What are the responsibilities of a Tax Preparer?

Tax professionals are responsible for filing federal and state tax returns for clients. They need to have expertise in all types of tax forms appropriate for their clients' needs. And they should be familiar with the key tax filing dates.

Kelly Sikkema

Photo by Kelly Sikkema | Unsplash.com

Tax return preparers provide services to individuals and businesses. Individuals hire them to work on their personal tax returns. Business owners hire them to manage business returns such as Corporations and Partnerships. Business tax returns are considerably more complicated. They require accounting or bookkeeping to ensure all records are correct before filing tax returns.

Starting your career as a preparer is not difficult. You do not need to get a professional license. However, you should register for a PTIN, and you'll also want an EFIN if you plan on e-filing. You can also become an Enrolled Agent (EA). That would allow you to represent clients before the IRS.

Before registering, start your career path with extensive training. Check if your local community colleges offer any courses. Or look into training programs endorsed by the Accredited Council for Accountancy and Taxation (ACAT) and the National Association of Tax Professionals.

ACAT provides accreditation through the completion of the course and passing the exam. There's no need to be accredited, but having the certificate garnishes your credentials. That can improve your chances of getting hired or qualifying for a higher pay rate.

Once you've finished your training and registered with the IRS, you can start working as a preparer. Here's a better look at the responsibilities involved:

  1. Identifying clients' tax needs

    Preparers are responsible for filing tax forms according to their client's needs. You should have a clear understanding of a client's financial situation. Conduct interviews with your client to better assess their position. A tax software program with an interview mode can help you accomplish this task successfully.


    Photo by Amy Hirschi | Unsplash.com

    You will be reviewing people's financial activities in detail. So you have to gain their trust and be worthy of that trust. Your reputation depends on that. Success in the industry demands your utmost integrity and trustworthiness.

    Preparers should also provide consultation services to their clients. Give them relevant information and offer advice on completing their tax returns. Apply the basics of tax planning, so as to ensure the clients' withholdings are correct.

    Expect that you will be called on to answer difficult tax questions. In some cases, you may be asked to help with a client's future tax planning. Guide them through state and federal tax laws with the aim of making better financial decisions.

  2. Interviewing the Client

    The tax preparation business is not just processing your client's data. It's a business built on good professional relationships. The first chance in building a good relationship with the client is via the tax preparation interview.

    Maximize building relationships with your clients with these tips:

    • Make a good first impression

      Clients want a preparer they can trust. You want them to feel assured in your presence. Appear professional and presentable. Smile and be accommodating. Offer a beverage and cultivate a welcoming space. Make your client feel comfortable.

    • Start asking about your client's personal information first

      Before asking your clients about their financial records, start discussing personal information first. Every tax interview begins with basic information such as full name, birthdate, contact information, occupation, and Social Security numbers.

    • Ask about your client's previous tax filings

      Make the most of your interview by understanding your client's previous tax filings. This is essential when you take on new clients. Do your best to get all the data from previous tax years, you'll need to know Adjusted Gross Income to file the tax returns electronically. If your client has been with you already, make sure to check your previous records, too. Looking at previous tax filings can refresh your mind to ask pertinent questions.

    • Learn about your client's possible incomes

      Get to know all of your client's possible sources of income. Some clients do not know that their side business needs to be filed. Knowing about odd jobs or overlooked sources of income would help you advise your client better.

    Overlooked sources of income:

    • State refunds (when taxable)
    • Social security
    • Unemployment benefits

    Your client may forget about other sources of income that are passive in nature. For example, passive income from investments. Here's a list of all other sources of income you need to ask about:

    • Interest Income - investments from a savings account or certificate of deposit)
    • Dividend Income - income earned from stock or investments
    • Self-Employment Income - income from any job hired that requires 1065 form
    • Sales Commissions
    • Pension Retirement Income
    • IRA or 401(k) Distribution Income
    • Gambling or Lottery Winnings - filed under form W-2G
    • Alimony Income - financial support from a former spouse
    • Rental Income
    • Sale of Business Assets - any sale that happened within the year for tax return filing
    • Sale of Personal Residence - any sale that happened within the year for tax return filing
    • Stock and Bond Sales - any sale that happened within the year for tax return filing
    • Income From Partnerships, Corporations, Trusts, Estates

    Some clients forget the income they receive in a year unless asked. You need to be thorough in asking for these details.

    • Identify any deductions or credits for your client

    You'll want to learn about any possible deductions or credits for your client to help them get a refund. Go through the following list with them to review how they could qualify for a deduction.

    Here are several possible tax deductions or credits:

    • Sales tax
    • Insurance premiums
    • Tax savings for Teachers
    • Charitable gifts
    • Lifetime learning credit
    • Unusual business expenses
    • Unemployment credit
    • Childcare expenses
    • Traditional IRA contributions

    Get your clients to recall details throughout the interview, so you won't miss out on any possible tax deductions. Be aware of all possible tax credits for individuals and businesses from the IRS website.

  3. Collating financial documents

    Tax preparers should collect a client's financial records. Tax preparation entails making sense of the client's finances based on available information.

    Types of financial documents clients would submit:
    1. Personal Information
      1. Social Security Number
      2. Tax ID
      3. Birth Date
    2. Income and Investment Information
      1. Form W-2 Wage
      2. Tax Statement
      3. Bank Statements
      4. Last year's refund amount
      5. Miscellaneous income records
      6. Form 1099s
    3. Self-Employment and Business Records (if applicable)
      1. Business Expenses Records
      2. Quarterly Estimated Tax Payment
      3. Mileage Records
      4. Home Office Expenses
    4. Deductibles
      1. Unreimbursed medical expenses receipts
      2. Health Insurance Coverage forms (Form 1095)
      3. Social Security benefits
      4. Charitable Donation receipts
      5. Property Tax receipts

    Some clients will submit organized financial documents. Others have all their receipts in a shoebox. You must go through them and identify which ones go on the forms. The more questions you ask your clients, the more comprehensive a picture you will get. Understanding all the information will be essential in forming an accurate representation of your clients' tax returns.

    Encourage clients to complete these documents to file their tax returns. This will help you to maximize clients' refunds.

  4. Start tax planning

    Once you're done with the interview and recorded all relevant financial data, initiate a discussion on tax planning with your client.

    Tax prep isn't as simple as entering data into a computer program. Preparers have to understand what the data represents. If you can skillfully analyze the collected data, you will be in a position to provide a more comprehensive level of service. You can help people plan their tax management strategy for the future.

  5. Compute and prepare tax returns

    Now we come to the essence of this profession: performing tax return calculations using data from the collated financial documents. You'll need to have excellent attention to detail and technical know-how.

    Your computations have to be error-free because mistakes can incur penalties. Reliable, professional tax software will help you in performing correct calculations. UltimateTax provides you with a secure tax software product that can handle such work. And the parent company provides excellent tax preparer support, too.

    You can contact UltimateTax via phone, email, chat, Facebook, and fax. If ever you experience difficulties in understanding the program, the support staff will happily advise you.

  6. Completing client's tax forms

    The final stage of any tax preparation job involves completing the client's tax forms and filing them. You must check each data input and verify computations before filing.

    File tax returns either electronically or manually via mail. A tax preparation business must become an IRS affiliate to file electronically. Apply for your Electronic Filing Identification Number (EFIN).

    Filing returns electronically is an advantage for both tax preparers and clients. Tax preparers could file returns with faster processing times. You can also reduce inaccuracies on a client's tax return. Clients can also receive their refunds faster.

    Clients who would like to file their returns through the mail may do so, as well. The clients would sign a waiver to file taxes electronically.

  7. Offer other products related to tax

    Based on a client's needs, tax preparers may offer bank products. Bank products are an additional way for you to add revenue. You can guide and advise their clients on which products to use based on your client's refund amount. Keep in mind that the cheapest and quickest way for clients to get their refunds filed is to get a direct deposit from the IRS.

    Tax preparers must be pre-approved before offering bank products to their clients. Get the necessary approvals first to offer these product options.

What type of services should I offer?

Tax Filing

Tax preparers can start a business focus on the filing of taxes. Tax season begins from January to April of the next calendar year. If you extend personal tax returns you have until October to get the returns filed. From December of the previous year, a tax preparer can start providing services to the following clients:

Employed clients

Tax preparers can help with the filing of income tax returns for working clients. Mainly, they can charge for the preparation of clients' W-2 forms.


Taxes of corporations and companies is also a good market for the tax filing service. Tax preparers can handle tax filing for small companies to big businesses. However, you may want to consider specializing if this is the type of market you want to get into. For example, you can specialize in tax filing of business in the food industry like restaurants or food suppliers. Handling too many clients from different sectors may be complicated for someone who is just starting. Once you're ready to expand, you can consider branching out to other industries. You can also offer filing 1099s for small businesses. Each business is required to file 1099s to any supplier that they paid more than $600 in the tax year.


You can also prepare taxes for non-profit organizations. When filing taxes for these types of clients, a particular specialization is also required. Different tax rules apply to non-profit clients. Available exemptions vary by the state where the non-profit organization operates.

Accounting services

Aside from tax filing, tax preparation businesses can also offer accounting services. In some states, you must be a certified public accountant (CPA). In other states, you can offer bookkeeping services which include reconciling and verifying bank statements and items.

Bookkeeping services

Tax preparers have available time for other ventures after the tax season. During the off-season, you can offer bookkeeping services to your clients. Your client's advantage in using your bookkeeping services is that once tax season comes in, it will be easy for you to prepare their taxes. Additionally, since bookkeeping can be a monthly service you can keep income coming in all year long.

Specialized services

Standard tax prep services mainly involve income and investment portfolios. However, there are other dedicated taxes, such as insurance or sales taxes. If you have other qualifications (i.e., you are a lawyer or a CPA), you can also provide this service for your new business.

What clients should I get?

Tax preparation businesses can serve anyone, from individuals to business owners. Everyone needs to file taxes. You'll have no shortage of possible clients. But you'll need to market your services or possibly make cold calls.

  1. Family and friends

    It's a good idea to lean on your personal and professional networks. When you're a new tax preparer, consider taking on family and friends as your first clients. Ask for their support. They can help spread awareness of your practice through word-of-mouth and online reviews. Market yourself as the "Tax Guy or Gal."

    Connect with friends who are small business owners. Get in touch with former employers and offer them your services.

    Preparers need to build trust with their clients. If you have previously established a relationship with someone, that's a big step in winning their trust in you.

  2. Referrals

    After providing your services to family and friends, you can ask them to provide referrals. Following that, the next step is to network and solicit referrals from within your circle of influence.

    Get referrals from your suppliers and vendors, former co-workers, and past classmates. Ask members of your organizations and your church to provide references. Having a relationship in good standing with them serves as a testimonial to your character.

    Request referrals from your previous clients as well. Always put your best foot forward when providing your tax preparation services. A kind word from your past clients is good marketing for your practice. Paying for referrals is also a good business practice. Paying a referral fee of $20 can easily be the best $20 you will spend on advertising.

  3. Local Businesses

    Local businesses like restaurants and contractors typically have one to ten employees. They are not likely to have a full-time bookkeeper on their staff. Such businesses would outsource tax preparation tasks.

    But even businesses with accountants and bookkeepers may choose to outsource tax preparation tasks. Outsourcing tax preparation is an excellent cost-cutting technique. It saves time and money for the company.

    Now, that you've learned what kind of services to offer and clients to pursue, start building your own tax preparation business. It is can be a lot of work, initially, but a tax business is stable and very profitable. Learn more about how to grow your business below.

    1. The Fundamentals for Tax Preparers
    2. How to Setup Your Office
    3. Acquiring Your Clients
    4. Tips for New Tax Preparers
    5. Getting Your Office Tools
    6. Outsourced Suppliers
    7. Investing In Your Own Office Space
    8. Acquiring Your Clients
    9. Tips for New Tax Preparers

Chapter 2: The Fundamentals for Tax Preparers

Now that you've identified what services you would like to focus on and built an initial client list, the next step is to work on the necessary registration for your practice. Getting this registration done is mandatory for you to start your professional tax preparer career.

Fundamentals of Tax Preparers
  1. Get your Employer Identification Number (EIN)

    Employer Identification Number or EIN is issued to your business for tax administration purposes. An EIN is also known as a Federal Tax Identification Number. Before you can request for other government documents, you would need to process this first. All other government forms will require you to declare your EIN.

    TIP: Do not confuse the EIN with your EFIN. These are two separate and different ID numbers. To lessen your confusion, EIN is a 9-digit number while the EFIN is only a 6-digit number.

    3 Steps in EIN Application:

    1. Check if you are eligible to apply for an EIN

      You can only apply for an EIN if your business located in the U.S.A. or in U.S. territories. You should be eligible to work in the U.S. That means you would need to provide your taxpayer information such as your Social Security Number (SSN) and Individual Taxpayer Identification Number (ITIN).

    2. Understand the Online Application

      Read the application instructions before beginning your online application. The online application does not have a save option. You must complete it in one session. If you take too long, more than 15 minutes, your application will expire and you have to start over.

    3. Submit application

      Once you've finished the application and all validations are done, you will immediately get your EIN. A notice will pop-up, which you can download, save, or print.

  2. Get your Business License or Permit

    Learn what business licenses and permits you need for your business type and location. Check which types of licenses and permits are mandated in your State. Requirements and fees may also vary.

    TIP: Some states issue a license or permit for a limited time only. Read these documents thoroughly so you'll know when you need to renew them.

  3. Get your PTIN

    Before you can offer services as a tax professional, you have to register as one with the IRS. Basically, this means obtaining a Preparer Tax Identification Number. Getting a PTIN is easy and free. Check out how to get your PTIN here.

  4. Get your EFIN

    Tax filings can be accomplished electronically nowadays. The IRS does require every tax preparation business to have an Electronic Filing Identification Number (EFIN) in doing this. It is a mandatory step in setting up your business.

    An EFIN takes about 45 days to process because the IRS conducts a rigorous background check on every applicant. Prioritize getting this ID number before you start setting up your office or looking for clients. If you don't apply before November, the time you'll wait to get an EFIN may be longer due to the high volume of applications.

    In your business timeline, make sure you receive an EFIN before the start of January. If you apply in January, you might not be able to get an EFIN until March. By that time, you won't have time to acquire clients.

    Not all individual preparers need to apply for an EFIN. Only businesses are required to get an EFIN, not each preparer. Learn more about how to get your EFIN here.

Chapter 3:How to Setup Your Office

As a tax preparer, you face two choices. You can work for a large tax company or build your own tax business. A career in tax preparation can be lucrative. In 2019, big companies and self-employed businesses both contributed to the forecasted industry revenue of $11 billion.

There are benefits to working in a big company like H&R Block, Jackson Hewitt, or Liberty Tax. These include gaining valuable work experience, corporate connections, and employment stability. In addition, a company may provide additional employment benefits such as healthcare and bonuses.

Building your own business has many benefits as well. According to FranchiseHelp.com, the majority of tax offices are small businesses, with 37% owned by single proprietors and 53% with less than 10 employees.

One of the benefits would be more freedom; especially since most work is concentrated from January until April 15 annually. It's a stable business as well since there will always be the need to pay taxes. For convenience, individuals and local businesses generally prefer to outsource tax return preparation to a professional.

If you decide to build your own business, here are some tips to get you started:

How to setup your office

Assess your needs

Before starting any business, you should look into the requirements for setting it up. Make a detailed list of what you'll need and have everything in place before you begin.

Get the necessary approvals

Obtain all necessary registrations for your new business. As a tax preparer, you'll need to get your PTIN, EFIN, and business registrations. Be thorough in your research. Seek additional information from local government offices. Some states and cities have additional requirements.

Create a business goal for the year

Set a number of business milestones as goals. In the beginning, you can set your targets within a period of one year.

Create a calendar to identify when you need to work on specific milestone goals. You may already be aware that tax preparers are busiest during the first four months of the year. Outside this busy season, you can focus on growing your knowledge and expertise, and possibly work on expanding your business.

You can also create three-year, five-year, and ten-year plans. The clearer the business plans, the better for you.

Identify where you will work

One great advantage of being a tax preparer is its mobility. You can set up your tax preparation business at home or rent an office. Many tax preparers choose to work at home. Meetings with clients could be done in co-working spaces or quiet restaurants. For privacy, a home office can accommodate clients.

However, if your home is not suitable for receiving clients or doing your work, renting an office space may be a better option. You can rent a small office or find a good co-working space that you can rent for longer periods of time. As your business grows, you will want to find a designated space or tax office so you can have year-round hours.

Set a budget

Of course, this is a crucial step. Building a tax preparation business has minimal start-up costs. However, that doesn't mean that you should splurge your entire budget in one go. Calculate how much you can invest and prioritize the essentials first.

  • Identify recurring expenses

    The easiest to budget to make is the one for recurring expenses. This is the type of expense that you can easily estimate due to the schedule. Create a spreadsheet that tracks your daily, weekly, monthly, quarterly, and yearly expenses.

    Here's a list of the usual recurring expenses:

    • Tax preparation software
    • PC/Laptop software programs
    • Continuing Education
    • Office Supplies (i.e., paper, envelopes, toner, etc.)
    • Equipment (especially those that were purchased with payment installments)
    • Utilities (i.e., communications, electricity, water, etc.)
    • Office rent
    • Licenses and Permits
    • Payroll / Employee Salary
    • Insurance
    • Tax deposits
    • Marketing/Advertising costs

    Estimate your initial budget by reflecting on your own monthly expenses. For items or services that you do not personally use, research the current prices in the market.

    Knowing your expenses per month will help you determine how much to charge your clients. Your fees should be able to cover your expenses.

  • Classify the type of expense over a specific period of time

    Once you've checked all your recurring expenses, classify them into fixed and variable. You can argue that there are no fixed costs because all expenses change over time. You can account for such change by budgeting in distinct timelines: have short-term and long-term budgets.

    When you are starting your business, you'll want to plan short-term budgets of three months and six months. Once the set amount of time has passed, review your expenses and make any necessary adjustments to your budget. After you've gotten a hang of short-term budgeting, you can plan your long-term budgets: one year, three years, and five years.

    For fixed costs, you can create estimates for longer periods of time. However, for variable costs, you need to create estimates based on the trends you can see. In this case, reviewing your expenses every month, quarter, and year will help you improve in creating those estimates.

    TIP: Find out what expenses you need to pay as a one-time outlay only. Create a separate spreadsheet for these to avoid recurring reminders.

  • Determine how much you will charge

    Now that you've outlined how much your business will cost, it's time to check how much you can charge your clients. Aside from the expenses, you also have to factor in non-variable factors such as your expertise, time, and the current market.

    Most often, time and expertise are computed the same way. The idea is the higher your expertise, the faster you can get things done. However, in the tax business, it is not speed alone that clients demand, but also accuracy. Additionally, the more experience you have gives you more confidence. A confident tax preparer makes the client feel better about choosing you.

    Another way to determine how much you'll charge is by looking at the current market. You don't want to be undercharging or overcharging due to a lack of information about standard rates in your area. Tax preparation rates will differ depending on whether you're in New York or in Dallas.

    Understanding the current market also means checking your competitors' rates. You don't want to be offering rates that are too low or too high compared to your competitors. If your rates are too high, you might lose business to other tax return preparers.

  • Review scenarios

    Once you've made an estimate of expenses and potential profits, plan for contingencies. Envision "what if" scenarios to determine how you might make adjustments to your budget. Here are some questions to ask yourself:

    1. What if sales go up to 10%?
    2. What if expenses double in 3 months?
    3. What if there are unforeseen expenses?
    4. What if your clients triple in 3 months?
    5. What if you need to pay a penalty?

    Envisioning these scenarios and planning contingencies to address them will help you manage your budget well.

  • Combine all data and create your initial budget

    When you have gathered your data, start creating your initial budget. Keep in mind that you need to review and analyze your expenses and profits every month. Learning how to manage your budget will lessen the pains of maintaining and expanding your business. As time passes, managing your budget won't be as daunting as it was initially.

Essential Office Supplies

Technology has advanced and improved the way businesses are done. Even the tax industry has evolved with the emergence of tax programs and electronic filing. However, tax preparation is still an administrative type of business. So investing in essential office supplies can ensure productivity and efficiency in your practice.

Getting Tax Forms

Most tax forms are available to download on the IRS website. The IRS has detailed instructions for each one for easy reference. You can fill up forms using the Adobe Acrobat PDF Editor. Once ready, file the forms via the e-File application.

You may find that not all clients want to file their returns using the IRS e-File system. Clients who opt for paper filing their tax returns include those with concerns about the security of their financial data. Some clients may not be eligible for an e-filing option. In 2018, IRS still received 13,628,000 paper tax returns.

To handle paper filing,order available tax forms from the IRS for a limited quantity. Expect the forms to be mailed after ten business days. If you have regular clients who prefer paper filing, make sure to order forms as soon as you can. Tax forms for the calendar year filing are available for ordering as early as December 1 of the previous year. Paper filing is not as common as it used to be. You'll want to allot additional time for preparing and mailing paper forms.

If you've exceeded the limit for ordering tax forms from the IRS, you may purchase IRS tax forms from Amazon and Staples.

TIP: Order red ink forms from the IRS, instead of printing these on your own. Red ink forms such as Form W-2 or 1099s are specialized. If your self-printed red ink form is rejected by the IRS scanner, you will be penalized.

Printing your own tax forms means that you are applying for substitute forms. The IRS must pre-approve how you print these forms. Printing mistakes could damage the IRS's scanning machine and could cause delays. To get approval, you must submit an application for review via email.

Steps to applying for substitute forms approval:

(Not something many individuals do, but it is a solution)

  1. Create one single PDF file of all the forms with a dummy account.
    1. Do not use your client or employee's details
    2. All the forms that you would need should be in one continuous PDF
    3. You can only submit a total of 15 forms per submission
  2. Create a cover letter or statement that details your request to print substitute forms.
  3. Create a check sheet of all the forms you included
  4. Email the 3 PDFs (i.e. tax forms PDF, cover letter, and check sheet) to substituteforms@irs.go
    1. Email subject should be "PDF Submissions"
    2. Make sure that all attachments do not exceed 2.5 MB. You may zip your PDF to decrease the size of the files.

      Sample attachement

      If there are problems submitting via email, you can mail the forms to the address below:

      Internal Revenue Service
      Attn: Substitute Forms Program
      1111 Constitution Ave. NW, Room 6554
      Washington, DC 20224

      For your reference, you can learn more at Publication 1167: Guidelines related to Substitute Forms.

Using the Right Paper

The IRS scanning machines are sensitive, which means forms that do not adhere to its guidelines could be rejected.

Tax forms can be purchased from suppliers aside from the IRS. When dealing with a tax form supplier, you must ensure that the forms comply with the guidelines. Official IRS tax forms are printed in either an 18-pound ANSI C paper size or a 50-pound offset book paper.

TIP: When purchasing your tax forms from a third-party supplier, make sure they adhere to the IRS' printing guidelines. If not, your client may be penalized.

If you were approved to print out substitute tax forms, you don't have to use the IRS' official paper standards. Substitute tax forms can be printed on standard letter size (8 ½" x 11"). However, make sure that the thickness of your paper is not less than 0.003 inches. If the paper is too thin, it will be rejected by the scanning machine.

Whether you do a paper filing for your client or give them a copy, you would need a reliable paper supplier.

Where can I get paper?

When starting a business, it's better to scout for paper suppliers available in your area. Get your mail and shipping supplies from your paper suppliers, too. Shop around for your business' envelopes, mailing labels, and stationery.

The easiest way to get suppliers is through referrals. Ask your friends and family for recommendations. You can also check out Paper Index's directory of paper suppliers and find one near you. But for your information, here are the top paper suppliers in the US:

  1. Horizon Paper

    The Horizon Paper company has been in the business for more than 40 years. It operates in 13 service locations and has partnered with 37 paper mills across the nation. Horizon Paper prides themselves on good customer service. Customers can open an account on their Customer Portal for easy ordering and monitoring. Horizon Paper is certified with the Forest Stewardship Council® Chain of Custody and Sustainable Forestry Initiative!® Chain of Custody.

  2. Kelly Paper

    The Kelly Paper company has dealt in printing papers from world-class manufacturers around the globe for more than 80 years. It offers a wide array of paper products including envelopes and specialty papers. It has 42 stores nationwide; mostly near the West Coast. Similar to Horizon Paper, Kelly Paper also has a customer's webpage for faster transactions and monitoring orders.

  3. International Paper

    The International Paper company is one of the world's leading paper suppliers. They operate in more than 24 countries. In the US, they have over 200 facilities. They provide various paper products for different types of businesses.

  4. Staples

    For office supplies, you can count on Staples. They stock different brands of paper products and other office supplies that fit everybody's needs. They have available customer programs that give rewards and discounts. You can either order supplies online or go to any of the hundreds of stores nationwide.

  5. Amazon

    Everything anyone needs is now online, especially on Amazon. Check out their office products section. Amazon makes ordering supplies online convenient and easy. If you're on Amazon Prime, you'll have the advantage of one-day shipping as well.

  6. Costco or Sam's Club

    Being a member of a big box store enables you to buy paper at discounted prices. That's an appealing benefit. In the early days, you can order paper on your own whenever you have the need. As your business grows, you'll find it more convenient to ask customer service to set up a recurring order for you.

Invest in a Reliable Printer

Aside from printing tax forms, you'll be printing memos, contracts, and invoices in your business. As a tax preparer, you'll be printing possibly thousands of tax forms every year. A basic tax return with multiple schedules would be printed on a minimum of 12 pages. A bank product could easily go for over 40 pages. If you are mailing any returns, you can expect to print many more pages.

You'd be wise to invest in a quality printer that's up to all these tasks. Additionally, no matter what printer you settle on, be sure to stock up on backup toner cartridges.

What printer should I get?

If you are buying a printer for your business, it's best that you choose a laser printer instead of an inkjet. Laser printers can handle heavy-duty printing tasks. Inkjet printers are more appropriate for home use where printing is only done on occasion.

Another advantage of a laser printer is its superior printing rate. When you're working with high-volume printing, speed matters

As for drawbacks, you may find that some laser printers do not excel in printing images such as photos. However, this should not be an issue since the nature of your business revolves around text-based documents without photographic imagery.

Another feature to consider is the level of noise produced by the machine. If you work in a small room, you might find a noisy printer rather disruptive.

You may also want to consider whether you will buy print-only or multi-function printers. Print-only printers can improve output efficiency as the whole device is dedicated to a single task. On the other hand, multi-function printers provide versatility, handling various office needs such as printing, copying, and scanning. Choose which type best suits your needs.

Here are our recommendations for printers that can offer high-quality output at a high volume.

  1. HP LaserJet Enterprise M607n

    The HP LaserJet Enterprise Printer is a printer that can deliver good results in as fast as 5.3 seconds. In a month, it can handle a total of 250,000 papers per month. This means you can print an average of 12,500 papers per day. As per speed, it can print 55 pages per minute. This printer is only available for printing in black ink. However, it produces high-quality resolution with 1200 x 1200 dpi. Although this printer is a little pricey, it's a good investment because HP is known for its durability.

  2. Xerox VersaLink B600DN

    This is Techradar’s top pick for best laser printer of 2020. It hits all the high marks, offering impressive speed, load capacity and monochrome print quality. Plus this a duplex printer, making it easy to print on both sides of the paper. The B600DN boasts a print rate of 55 pages per minute. Its main loading tray holds up to 550 sheets, and its fold-out multipurpose tray can hold 150 sheets, or alternatively, cards, envelopes or letter headed paper. Text documents come out in crisp, clear 1200x1200 resolution. The initial purchase cost may be a little high, but the B600DN is actually an economical choice due to its low running cost.

  3. Lexmark XM5163

    Another speedy output printer is the Lexmark XM5163. It can print up to 250,000 pages per month at a speed of 55 pages per minute. It supports print outputs in 17 paper sizes. It features a paper tray that accommodates 4,400 sheets of 20 lb paper. In terms of operating noise level, it emits only 56 decibels. This printer is built for heavy-duty use and durable to last for years.

  4. Brother MFC-L8900CDW

    Brother's top-selling printer is the MFC-L8900CDW model. It has print, scan, copy, and wireless networking capabilities. It produces 2400 x 600 dpi print resolution at both black and color ink outputs. Its printing speed is a decent 33 pages per minute. In a month, this model can produce approximately 60,000 pages. The Brother MFC-L8900CDW also features a Toner Save mode that helps reduce toner consumption.

  5. Brother HL-L5100DN

    A sturdy workhorse of a printer with high-speed duplex printing capabilities. It’s fairly compact and a good fit for small offices or working from home. Plus it’s very affordable. The Brother HL-L5100DN can hold as many as 300 sheets of paper in its two loading trays. Its print rate of 40 pages per minute is nicely suited to small office needs. The image and photo printing quality leaves much to be desired, but that’s par for the course for printers at this price range. More to the point, its text printing quality shines. You’ll get nicely sharp and legible results at 1200 dpi resolution.


Getting a printer is a major investment. Take your time in purchasing one. Do your own research on the available printers in the market. Consider your budget and the specs you require in deciding which printer to buy.

Get a Reliable Laptop

Even if you have an office, it's good to have the mobility afforded by a laptop. Most tax preparers will benefit from having one. A laptop comes in handy if ever you need to work outside the office. You can conduct various operations and transactions using the laptop: online communication, research, marketing. and purchasing equipment or supplies.

You will certainly need either a laptop or desktop to run your office. Your device will help you keep records of your clients, prepare their taxes, and file returns on the IRS e-File system.

What type of laptop should I get?

Not all laptops are created equal. It's essential to know what specifications you need for your business. Budget is also a big factor. Getting the right laptop would mean finding one the fits your needs without overpaying for it.

The first consideration when buying a laptop or desktop for your tax preparation business is matching the required specifications of your tax preparation software. Preparing taxes will be more difficult if your laptop is not suited to your software.

The second consideration is the amount of software you need for your business. Maybe you need a laptop that matches your Point-of-Sale (POS) device. Maybe you need one that can store your client's large financial data. Identify the programs and amount of storage you need so you can fit the laptop's specifications to it.

Without other considerations, an ideal laptop or desktop should have at least an Intel i5 processor or equivalent. It should also have at least 4GB RAM and 256GB solid-state drive (SSD). These minimum specifications guarantee that your tax preparation software and other extra programs will run smoothly.

In the meantime, here are some of the recommended laptops and desktops for a start-up tax preparation business:

  1. Asus ZenBook 14 UX425EA

    Asus has done the wonderful job of delivering an affordable business laptop that runs on the Intel quad-core i7-1165G7 (11th gen). Though if you’d like to save a few more bucks, you can opt for an i3-1115G4 or i5-1135G7 model instead. If you’re using it as a work laptop, you’ll probably be fine with an i5. This ZenBook has a pleasing lightness and a smart-looking metallic chassis. The keyboard is very comfortable to use. The laptop performance rates somewhere along the lines of an 8 out of 10, while avoiding any temperature issues. It is equipped with a 14-inch IPS matte screen⁠—the FHD 1W option is recommended for its balance of quality video resolution and energy efficiency.

  2. Dell Inspiron 15 7000

    This great budget laptop retails in the $650 range. It packs power with its 8th generation i5 processor, 8GB RAM, and 256 GB SSD. The Dell Inspiron also has a full-size Ethernet port that helps you connect to business networks. It's equipped with a touch screen, so you can convert this laptop into a tablet for your clients' easy viewing. This is a great laptop to use when you have meetings with clients.

  3. Surface Pro 7

    Mobility is Surface Pro 7's main feature. It only weighs 1.70 pounds. Detaching the keyboard can convert your laptop into a tablet. Again, it's a great way to display your client's tax forms for their review. Beyond that, this laptop has a 10th-generation i5 processor, 8 GB RAM, and 256 SSD. You can also purchase a digital pen, which comes in handy when you need clients to log their e-Signatures.

  4. Google Pixelbook Go

    The budget-friendly Google Pixelbook Go appears poised to overtake the similarly-named Google Pixelbook in popularity. For a budget laptop, it’s got top-notch performance specs, a great screen, and impressive battery life. Indeed, its battery can generally outlast the Pixelbook by approximately 2 hours. The keyboard is tactile and comfortable in the best way. A 1070p webcam offers sharp video quality⁠—just what you need for your Zoom meetings. One of its best features is its supreme portability. You can use it pretty much anywhere. If you use online tax software and you're a fan of Chrome OS, this laptop is for you.

  5. 13" MacBook Pro

    A MacBook Pro can also be a great investment for your business. Brand new Macs can be a bit pricey, so you might want to look for renewed or refurbished units costing around $800-$1000. The 13" MacBook Pro 2019 sports an i5 processor, 8GB RAM, and 256 GB SSD. Before you do purchase a Mac, first check whether it's compatible with your chosen tax preparation software. Most programs can run only on Windows computers. Of course, if you're using an online tax application, it should work on Mac, Windows or Chromebook.

  6. Lenovo ThinkCentre M910

    If you prefer to invest in a desktop instead of a laptop, you can use the Lenovo ThinkCentre M910. An upgrade from its predecessor, it comes equipped with a 7th-gen Intel Core i7 processor and an Intel Optane SSD. It is even Oculus-certified, if that matters. The ThinkCentre M910 is encased in a slim metal tower that does not take up a lot of space. The advantage of getting a desktop is that you can easily support a double monitor setup. That allows you to display your client's data on one monitor and your tax preparation software on the other.


Find the Best Tax Software

These days, you'll need professional tax software if you wish to start a tax preparation business. You cannot offer the efficiency and security demanded by modern clients without proper software. If you want to compete in the current marketplace, you must have professional tax software to provide a high level of service.

What should you look for in professional tax software?

You'll find that there are numerous professional tax software options available to you. All of them provide the same basic output: your client's tax returns. Still, there are several factors to consider before purchasing professional tax software.

  1. Ease of Use

    Accuracy is essential when you are inputting your client's financial data. Ideally, professional tax software should be user-friendly. A clear and simple interface goes a long way in avoiding inaccuracies that may arise from a misclick or two.

    You might ask, what makes a tax program user-friendly? Basically, it should have an intuitive user interface (UI). Ideally, every essential software function should be readily available and visible upon launching the program. For example, a good UI would display a quick access menu of all of the system's main features.

    In addition to having a good UI, user-friendly software should be easily accessible to you. Is the tax program only available as a desktop application? A preferable tax program would also offer a web-based application that you can easily access outside the office. A web-based application can be handy for any last-minute revisions to your client's tax forms. Web-based applications have grown in popularity since they can be so secure and the updates happen without user intervention.

  2. PC/Mac Compatibility

    Ideally, your professional tax software should be compatible with different operating systems. That gives you more flexibility to accommodate a variety of scenarios. For example, you might use a PC in the office and a Mac at home. If your program works on both, then you'll find it easier to manage days when you find it necessary to stay home yet still work.

    It's also possible that you might decide to change your Windows PC to a Mac, or vice versa. Migrating data systems can be a pain. That's less of an issue with multi-OS compatible software. Avoid delays or loss of crucial data by using professional tax software that runs on Mac and PC. But the majority of professional tax programs are Windows-only, unless you use an online platform.

  3. Type of Data Entry

    Good tax software provides convenient data entry modes. Professional tax software commonly offers "Form" data entry. In the program, you will be shown the editable tax form to fill out as you would manually. Although it is practical to go through each detail line per line, this entry mode can take a lot of time.

    Some software products also offer an "Interview" mode for data entry. Instead of filling out details directly on the tax forms, you input your client's data on a separate page. Details are grouped into categories. This data entry mode has the benefit of facilitating a more natural Q&A conversation between you and your client.

    As an example, one of the Interview categories is Personal Info. During your interview with the client, the program will prompt you to ask them for relevant personal info. You'll enter their answers as data in the appropriate fields. After you save the data, it will be reflected on any tax form you use for that client in your software. That saves you some time and effort when working on that client's tax return.


    Screenshot from CCH Small Firm Services | TaxWise 2016: Interview

  4. Tax Forms and Tax Filing Availability

    You expect professional tax software to include all the federal and state tax forms you will need. Your business relies on that! It would hardly be convenient to use separate tax programs for your federal and state filing operations.

  5. E-filing capacity

    Most professional tax software products have at least basic e-filing features. The amount of e-filing you can do will depend on your subscription. At the lowest tier, you may be limited to e-filing a small number of returns. Should you file returns above the limit, you'll pay additional fees.

    Therefore you might want to get a tax program that will let you e-file as many tax returns as possible. If you're just starting your business, you can make do with limited e-filing access. But as you expand your practice and acquire more clients, you'll want to be able to file as many tax forms as you can.

    As noted, tax programs with limited e-filing access will require you to pay additional fees to go over the limit. In the long run, this will not be cost-efficient for your business. Find a professional tax software that has unlimited e-filing included in your subscription. Then you won't lose any opportunities of gaining more clients.

  6. Customer Service

    Early in your career, learning all the tips and tricks of your new professional tax software may be difficult. Your software provider should have easy-to-understand manuals and guides available. Better yet, a friendly customer agent should be accessible to answer your questions and help you learn the software.

    When there's a new program update or a new IRS form, you'll want to discuss the change with someone to aid you in fully understanding it. Getting advice from your tax software service agents is a great benefit! You can be assured of getting enough support to help you serve your clients better.

  7. Budget-friendly

    Last but not least, you'll want to purchase professional tax software at a budget-friendly price. Your budget may be the most crucial factor in starting your tax preparation business. Of course, this does not mean you will purchase the cheapest tax program you could find. Your goal is to find professional tax software that provides value that will justify its price. Ideally, your best choice of professional tax software would be one that has all the features you need at a price that fits your budget.

The Best Tax Software for a Tax Preparation Business

UltimateTax is the best professional tax software for both new and seasoned tax preparers. Its features and services meet all the requirements for high-quality professional tax software, including a budget-friendly price.

  • Ease of Use

    UltimateTax provides easy-to-use software. Its default screen offers a series of icons on its toolbar at the top of the application. These icons give you access to the most used functions. You can set frequently used links and shortcuts for better navigation.

    UltimateTax also populates tax forms easily from saved data on the program. You won't have to keep requesting previous data from your clients. Whatever data you saved from your previous meetings, you can easily populate on different tax forms available on the program.

    Additionally, UltimateTax comes in both English and Spanish versions. Set the program to the language you are most comfortable with.

    UltimateTax also has an e-Signature feature. No need for your clients to travel all the way to your office to meet you to sign in. It delivers services with convenience in mind for you and your clients.

    Another great feature is its web-based application. You can access the UltimateTax professional tax software by installing on your desktop or accessing it over the internet. This is a great feature if you prepare taxes from multiple locations.

    If you need it, UltimateTax offers onboarding to assist you in your initial setup.

  • PC/Mac Compatibility

    No need to worry about your hardware and software compatibility. UltimateTax is compatible with both Microsoft and Apple OSes. You can use UltimateTax Desktop 1040 on your Windows computer. If you have a Mac or Chromebook, then use the UltimateTax Online 1040. UltimateTax's desktop version can be installed on multiple workstations within the same network.

    At the start of your tax preparation practice, you may only need one desktop version. But as your practice grows, you may need to install more professional tax software on your employee's workstations. UltimateTax does not require any additional fee for installing it. You can even save all tax returns you've prepared on your computer server for better data privacy and accessibility.

    Plus, for UltimateTax Online 1040, updates on the tax programs are automatically downloaded and synced to your devices — no need to spend any time manually downloading and installing updates.

    In terms of overall ease of use, UltimateTax provides great value.

  • Type of Data Entry

    UltimateTax offers both "Form" and "Interview" data entry modes. Using the "Interview" data entry mode will make it a lot easier for you and your client to fill out all types of tax forms. Once you've saved the data, you can quickly populate all details in any electronic tax form you need.

    Building rapport with your client is highly recommended, as it can lead to repeat business. Using the "Interview" mode helps you with that. You're interacting directly with the client, asking for details per category instead of per line in the tax form. Your questions will have a natural progression that feels convivial, rather than coldly professional.

    If you're more familiar with the tax forms, you can choose the "Form" mode, instead. Either way, UltimateTax is flexible to make filling in data more convenient for you.

  • Tax Forms and Tax Filing Accessibility

    UltimateTax is updated with all of the IRS' new tax forms. You can feel assured that all tax forms prepared using the program are compliant with IRS standards. This goes for both federal and state tax forms. Yes, UltimateTax is compatible with e-filing in all states.*

    *When using an UltimateTax Unlimited package

  • E-filing capacity

    Another UltimateTax great feature is its unlimited e-filing capacity. If you choose UltimateTax, you can offer e-filing to all of your clients without limit. Expand your business and acquire more clients without incurring additional fees!

    UltimateTax's unlimited e-filing feature even applies to your client's back taxes. It also applies to any tax return extension your client might request.

  • Customer Service

    UltimateTax prides itself on providing the best customer support for its customers. A knowledge base is set up so you can be updated with the latest trends in the industry. You also receive emails relevant to the tax industry. From November to December, UltimateTax offers one-on-one assistance to its users, as well.

    Training videos and FAQs are readily available to help anyone use the program. You can work on practice returns to get familiar with the program before dealing with any actual client work. For first-timers, a setup assistant is available to take you through the installation.

    You can seek help via a dedicated 365 Service Phone Number set up to handle inquiries. Get assistance over their toll-free phone support. During critical months, customer support is made available for extended hours. Not available for calls at the moment? Contact UltimateTax via email or chat.

  • Budget-friendly

    UltimateTax has four products: the UltimateTax 1040 Online, UltimateTax 1040 Desktop , UltimateTax Online 1040+ Corporate, and UltimateTax PPR (Pay-Per-Return). Each product is valued at different prices to fit any tax preparer’s budget.


    Compared to other professional tax software, UltimateTax falls under the low-to-mid price range. However, based on price and features comparison, there's no doubt that UltimateTax provides more value than the others. For any new tax preparer, investing in UltimateTax yields returns as you establish and expand your business. UltimateTax renews most of its customers from year to year.


Do you want to find out if UltimateTax is a good fit? Try UltimateTax for free to check out the features and services.

UltimateTax 1040 Online UltimateTax 1040 Desktop UltimateTax PPR

Chapter 4:Setting Up Your Business Tools

Beyond the equipment you need for your business, you also need some essentials such as a business phone and business email. Both existing and new clients need to be able to reach your office to do business with you.

When you’re setting up a new business, it’s tempting to use your personal phone and email at first. Do NOT do this. Although it may seem cost-efficient, there are many reasons why you should invest in your own office infrastructure.

Setting Up Your Business Tools

Why should you invest in your business tools?

  1. Providing the best customer experience

    Investing in tools such as your office’s phone, email, and cards means investing in your customer experience. Having dedicated tools such as a 1-800 hotline or @yourdomain.com email address provides a good customer experience.

    Clients can easily discern everything about a company or service provider before deciding to do business with them. They will be sure to check a business's website, email, and phone number. If any of your contact details are personal, they will be less likely to choose to do business with you.

    Communicating with you through your business tools reiterates to your clients that you are legitimate and professional. This will inspire their confidence in your new business.

  2. Preparing for future manpower growth

    When you start your new tax preparation business, you might start with only a few staff members. It is even possible to start with only yourself on the payroll. However, this does not mean you don't have to invest in setting up your business tools for growth.

    When you've started expanding and hiring more staff, you would want to make sure that your tools are capable to accommodate the increase in usage. By this time, your business cannot afford to slow down. Thus, you need to make sure your tools are ready and available so your staff can work and contribute right away.

    Having your own company's tools will help your staff to gain a sense of company identity, too. Getting their own business emails will give them the confidence to communicate with clients as professional representatives. Especially your sales staff! Providing them with business cards will be one of your top priorities. The cars will establish their credentials as representatives of your company.

  3. Investing in your brand

    In addition to helping to bolster customer confidence, branded business tools can help build your company image. As when you pick out your business name, you want to send a distinct message to your potential clients.

    Brand awareness is achieved when people and potential clients know about your business simply through your name. If you have your own 1-800 phone line or @yourdomain.com tools, you can easily establish brand recall for your tax business.

    As pointed out, clients look for stability and reliability in companies that they would trust. Having your own phone, email, and cards contributes to that image. From the client's perspective, you have invested in your business, and therefore will not fold up shop at a moment's notice.

    In summary, getting a monthly subscription for your phone line and email adds greatly to your reputation, allows you to grow your business, and helps your clients to trust you. Now, let's find out where can you acquire such tools.

Business Phone

The first tool you should get is a business phone. It is absolutely essential for client communication. More than that, it also helps you build good relationships with them.

If you are going to hire staff for your new business, consider hiring a receptionist first. The receptionist can assist you in handling calls, emails, and scheduled meetings.

Separating your business phone from your personal phone is important to ensure your privacy. At the end of the business day, you can switch off your phone and let the machines take your clients' calls.

TIP: If you have reasonably good internet service, apply for a VOIP or Voice Over Internet Protocol service. They offer a wide range of services and cheaper rates. Plus, you won't need to have a separate service for your internet and your phone line.

Here are some VOIP and phone services to consider:

  1. Skype

    Skype is well-known for its free chat and call service. In addition, you can acquire a local number and set it up as your business phone. You can answer incoming calls and make outgoing calls using the Skype app from any device. Skype offers monthly subscription plans that range from $3.59 to $16.79 per month.

    Packed with all the features of Skype free calls, you'll have access to voicemails, call routing, video and audio calls, screen sharing, and encrypted calls. You'll also be able to send files and conduct conference calls over Skype.

    Skype lets you perform searches within conversations. You can activate functions like Call Forwarding, Voicemail, Caller ID, and Skype To Go. One further advantage of having Skype is its seamless integration with all Microsoft apps, including Office 365 and Outlook.

  2. Phone.com

    Phone.com is a cloud-based VOIP system that connects your phone system to whatever device you have, as long as it's connected to the internet. It's available at three price points with their Base ($12.99/mo), Plus ($19.99/mo), and Unlimited ($29.99/mo) packages.

    Used by thousands of small businesses in the U.S., Phone.com has established a good reputation based on their system's comprehensive features. The standard features include Account Management, Caller ID for incoming and outgoing calls, Toll-Free Phone numbers, Voicemail, and User Extensions.

    You can choose from thousands of available local, toll-free, and international numbers. You can also customize phone numbers for an additional fee. If you already have a phone number that you'd like to turn into a business phone line, you can transfer it to Phone.com using their Number Porting feature.

    Set up call handling rules such as call menus or auto-attendant, call forwarding, and call transfer to help direct your clients to the right person for their concerns. Your clients will also hear soothing hold music when they're waiting for you or your staff to pick up their call.

  3. Citrix Grasshopper

    Grasshopper is another VOIP service that caters to small and medium businesses. In 2016, it was acquired by Citrix, which helped strengthen their service. It has three packages: the Solo, Partner, and Small Business. Their packages start from $26 to $80 per month.

    Grasshopper's main strength lies in its features. Their Solo package has 1 number with 3 extensions available. Aside from that, all packages have Mobile and Desktop applications, Custom Greetings, Simultaneous Call Handling, Incoming Call Control, Call Transfers, and Instant Response. On top of these features, you also get unlimited minutes whichever plan you choose!

    Another great feature that Grasshopper has is that you can get notifications via the mobile and desktop apps included. Voicemail messages are also directly encoded and sent to your mobile and email. That way, you can read and review your voicemails.

  4. MightyCall

    Also a VOIP service, MightyCall provides toll-free, local, and customized numbers for its clients. Having a customized number is perfect for the marketing aspect of your business. Incorporate your business name on your number or get a clever one that everyone can immediately remember.

    MightyCall's Basic package is $19.99 per month. It includes 1,000 minutes, 2 toll-free or local numbers, and 10 clients in the Contact Book. If you need unlimited minutes, you can get the Standard package available at $39.99 per month. Aside from unlimited minutes, you get additional features like Call Recording, Voice to Text, Presence Indicator, and 5 toll-free or local numbers.

    What's great with MightyCall is that all its packages include Unlimited users. When you start hiring more staff, you won't have to spend additional fees to provide access to them. MightyCall also has a desktop app with a multichannel activity dashboard that displays messages, calls, emails, and callback requests.

Business Email

One of the most essential tools you need is your business email. All correspondence to your clients and IRS will be done by email.

There is a lot of free email hosting service available now. However, not all can provide you with the data security you need. Plus, email hosts are competitive now, offering more robust features for your business.

Here are some email hosting services to consider:

  1. Microsoft 365 for business

    Microsoft 365 for Business is similar to Google Workspace in its features. The Office 365 Business Premium plan offers 50GB mailbox storage for $12.50 a month. You also get 1TB file-sharing storage via OneDrive.

    You also get access to Microsoft Office tools like Excel, Word, and Powerpoint. As for their communication package, you can get Skype and Microsoft Teams. All of these features are available on your workstation and your mobile.

    If you don't need to install these features on your laptop, you can opt for their all-mobile version for only $5 a month.

    In terms of branding, you can get your domain name on your email addresses. Having your own “@brand.com” showcases professionalism and builds a trustworthy reputation.

    This is a highly recommended option when building your own tax preparation business. Aside from email, having Office 365 with Microsoft Word and Excel is a necessity in the tax industry. If you're using Office 365 Business Essentials, just add $ from $7.50 per month to get the Office 365 Business Premium package.

  2. Google Workspace

    Google Workspace (formerly GSuite) is a more feature-packed service compared to the free Gmail people know and use. For only $12 a month, you can get 2TB cloud storage, customer support, mobile device management and security, and your own company email address. This also gives you access to 150 participant video meetings, with recordability.

    Aside from the email service, you'll enjoy Google's other features like GDrive, Meet, Calendar, Photos, Sites (a website builder), and Google Sheets, Forms, Docs, and Slides. What's great is that Google Workspace is compatible with all web-capable devices. You can work from your laptop and transfer to your phone in seconds.

    If you need a lot more storage space, you can opt for the Business Plus service that comes with 5TB cloud storage or the Enterprise plan that provides "as much storage as you need."

  3. Rackspace

    Rackspace is an email hosting provider known for its robust customer service package. Support is available in 10 global centers with 3,000 cloud engineers on-standby if there's any trouble with the email hosting service.

    Rackspace offers professional email hosting with your own company email address for $2.99 per month, per user. You will get Outlook, webmail, and mobile access with 25GB mailbox storage space. You also get unlimited aliases and group lists.

  4. ZohoMail

    If you don't need a lot of storage space or extra features, you can try Zohomail's email hosting service for only $1 per month, per user. It comes with email hosting for multiple domains, mobile app, and business calendar functions.

    You can also opt for their $3 per month Workplace plan that includes an online file manager, instant chat communication app, and online meeting software. You also get access to tools such as Online Wordprocessor, Spreadsheet, and Presentation software.

Business Cards

Business cards are vital tools for when you are networking. Market your business by participating in trade shows and conferences. When you're at a trade show, hand out business cards to potential clients. You can expect to drum up some business this way.

Despite that, business cards are not critical enough to spend a lot of time or money on. You may end up spending a lot of money if you choose to get the design and printing of your cards professionally done.

And attending a trade show to market your business is not going to be your first marketing strategy. In the early days of your business, you can get by with a simple business card created on your laptop. Print the cards yourself using your printer.

Alternatively, you can order your business cards from Vistaprint. From time to time, Vistaprint offers free design and printing of business cards, which means you'll only pay for shipping! If their promo is not available, you can still get free shipping from Vistaprint, which reduces your costs.

The best time to invest in business cards is when you're going to trade shows and other events that'll give you the opportunity to network. To lower expenses, order your business cards in bulk. If you have many client-facing staff members, getting business cards for everyone in one go can be cost-effective.

Chapter 5:Outsourced Suppliers

When you start a business, you don't have to hire a lot of professionals to work for you immediately. Recruiting and paying a staff might be too onerous an expense in your early days.

For small businesses, it's highly recommended to outsource services that are not in your field of work yet. The main goal is to work on your businesses' core services and strengthen these. You'll want to work on the essentials of your tax preparation services: acquiring clients, setting up your tax software, understanding the market, and expanding into other tax-related services.

Whether you have a home office or your own commercial space, you can outsource services like shredding services, computer IT, and printing services.

Outsourced Suppliers

Internet Service Provider (ISP)

In today's market, there's no business that does not deal with the internet. You use the internet to connect with your clients using email and messaging services. Banking and marketing are also done on the internet nowadays. Most importantly, you'll need an internet connection to file your clients' tax returns via UltimateTax.

What kind of internet service do I need?

In some towns, you might have only one ISP. But it's more likely that you have a number of ISP options. When it comes to internet service providers, location can matter.

Whether you have one ISP option or several, getting a broadband connection will be crucial to your new tax preparation business. The IRS recommends that preparers use a high-speed internet connection for e-Filing returns.

According to Speedtest.net, as of October 2020, the US has registered an average upload speed of 62.11 Mbps and download speed of 165.88 Mbps on fixed broadband connections. The comparable average speeds for mobile connections are 11.8 Mbps on uploads and 53.44 on downloads. However, local average speeds also vary depending on where you are in the USA.

You'll want a minimum upload speed of 50 Mbps and a download speed of 100 Mbps. That would be acceptable for a small business.

Try to find an ISP that provides excellent customer support. Your tax software and e-File transmissions rely on dependable internet service. When your internet goes down, you want to be able to talk to someone from your ISP who can promptly resolve the issue.

TIP: Since most of your transactions will take place online, you definitely need an ISP with reliable quality service. Ask your friends, especially the business owners, if they can recommend a good ISP in your area. Also, find out recommendations from small business owners near your office or home.

IT Services

Nowadays, many businesses need IT services. When you're starting your business, however, you might not require a great deal of IT support. Prioritizing the services which you need first can be the key to maximizing your ROI with a small budget.

Work Station & Equipment Set-Up

After purchasing your laptop or desktop, you might need IT support to install the necessary applications. They can ensure that your systems will work as they should. In many cases, your retailer can provide such a service, which would include installing the basic applications, such as your device's operating system.

What about the other applications that you'll need? You might want to install Microsoft Office or iWork Suite. You also need business communication tools such as Skype, WhatsApp, Outlook, Microsoft Teams, and Slack.

Additionally, you'll have to install any specialized software for running accessories. This could include your printer, scanner, headset, signature pad, etc.

Then you need to ensure that your data server delivers a high level of data security. You want all your devices to connect to the internet for maximum efficiency, while ensuring security..

Fortunately, you don't have to worry about the tax software installation process when it comes to UltimateTax. Our customer service will guide you through the installation. Our support team can also help you with any problems related to UltimateTax, all-year-round. UltimateTax also has many support articles on installation that you can consult.

If you only have to install UltimateTax on one workstation, you can get it done by yourself. If you've got many installations or doing a network installation, you're dealing with greater complexity. It might be worthwhile to hire an IT person to do it. You can avoid frustration and save time, especially if you are not too adept in electronics. The time you save can then be spent acquiring new clients, building your brand and reputation, or some other productive activity.

Big companies often have an in-house IT support staff. This may not be feasible for most small businesses. According to Glassdoor, the average pay of an IT professional is $85,152 per year.

Instead of hiring a full-time IT employee, you may find it more cost-effective to outsource IT services to a third-party company. You can choose between a monthly subscription of technical support or a one-time work contract.

Type of Outsourced Work PROs CONs PROs CONs
One-time Work Contract
  • Budget-friendly
  • Freedom to change IT support company after the task is done.
  • Limited to the work contracted only
  • If there's trouble shortly after completion, you need to iron out another work contract before it can get resolved.
Monthly Subscription
  • 24/7 Helpdesk available to you
  • Regular check-ups of your workstation environment
  • Costs more because you pay for the service even if you didn't use it.
  • If you don't like the service, it may be difficult to get out of your commitment to the company.

Consider getting technical support from companies that also provide laptop or equipment repair services. That way, you won't have to find a different company when you have hardware issues.

Depending on your location, you may have a few options for IT services. Always check the company's ratings before deciding which one to trust your business with. Remember, whomever you choose will help you set up a huge chunk of your business.

Marketing services

It may be smart for you to focus on your core business and outsource the bulk of your marketing efforts. One advantage of outsourcing marketing services is that you won't have to pay for a salaried full-time employee. Plus, you get to work with experts in the industry.

You may still handle other marketing aspects of your business, such as marketing events and face-to-face meet-ups with your target market. But you can delegate your digital marketing to a third-party company. Here are some marketing aspects that you can easily outsource:

Logo and Brands

Unless you already have a specific idea of what your logo and brand would be, you can outsource and hire a graphic artist to render it all. A better idea would be for you to share those ideas with your graphic artist and let him make it visual or improve on it.

Depending on the graphic artist's rates and agreed work, you'll get at least three options for your logo and brands. You can further discuss revisions to get a logo you are happy with.

Remember, your logo is also crucial to your marketing. It'll be part of your business cards, official stationery, and ads. So when choosing the graphic designer that will handle your logos, familiarize yourself with their previous work. You need to find someone whose visual style resonates with your preferences.

Keep in mind your target market, too. Tax preparation is a serious and professional business. Do you think the previous works of the graphic artist shows this kind of professionalism? You'll need to partner with an artist that can get this message across through design.

Website Design

Your website is equivalent to your business card. A client who wants to know more about your business will look at your website. If you don't have a website, the client may think twice about the legitimacy of your business.

Unless you are a former web developer, building a reliable website can be quite a challenge. Instead of spending hours figuring out how to build one, hire a company that does website design.

Search for companies (or freelancers) that offer this type of service. Find out what services they provide and their rates.

Also, browse through their portfolio. Find out what websites they've made. You'll often find that their website designs carry a certain look and feel. You can decide whether that fits your business image.

Now that you have your website and your logo design, consider getting someone to handle your online marketing. The next step, in terms of marketing, is getting people to visit your website.

This is where Search Engine Optimization (SEO) comes in. It's the process of achieving quality and quantity in web traffic using keywords. Given finely-tuned SEO, when someone googles "tax preparer" or "tax preparation near me," your website should show up as one of the top results.

If your website places in the top search results, it will benefit from more web traffic, giving you more chances to land a client. Now, your website must sell your tax expertise and convince the client to hire you as a tax preparer. Web marketing services take care of the SEO of your website, so you can get more clients to hire you.

SEO optimization and companion processes like link building are time-consuming activities. You don't want to spend too much time away from your core business to work on that! You're better off outsourcing such tasks to industry experts. To web marketing specialists like The Gallas Company.

The Gallas Company is a digital marketing agency that develops online marketing strategies for companies, building up their web presence through SEO optimization and SEO link building. While it is based in Florida, The Gallas Company caters to companies anywhere in the USA. It's a no-fluff, results-driven, versatile web marketing service that builds relationships with each client.

You'll get access to regular reports on SEO Strategy, KPIs, Google Adwords, Google Analytics, and Facebook Ads. Get key consultations on your web marketing through Competition Analysis & Review, Strategic Product Offering, Search Engine Optimization Strategy, and Social Media Strategy.

Consider looking into their Partnered Marketing strategy. It means that The Gallas Company will work with you to understand your business, your goals, and set up a long-term marketing strategy. Client engagement is tailored according to your business needs.

Get a web marketing service that produces results. Then you can spend more time running your business' daily operations and working on other client acquisition strategies.

Chapter 6:Investing in Your Own Office Space

Should you get your own office? This is a crucial decision that every new tax preparer must deliberate on when starting their business. You have to carefully weigh the pros and cons before renting (or purchasing!) your own office space.

Starting with a home office is a viable option. One advantage of tax preparation as a business is the ease of doing it from your home office. As long as you have enough space to accommodate your clients for meetings, you can start in the comfort of your home.

Of course, having an office space will lend credibility to your business. Clients will be more likely to trust you and view you as a professional.

Acquiring Your Clients

What to Consider When Deciding on Investing in Your Office Space?

  1. Budget

    Clearly, the first to consider is whether you have the budget for an office space. Consider the capital you are willing to invest in your new business.

    When you invest in your office space, you should be ready for a full commitment. You need to ensure you have a budget for at least one year of occupancy. Though in some cities, you can rent for a minimum of six months. That would still be a substantial cost to your start-up business.

    According to Deloitte Insights, 23% of commercial space owners expect an increase in their rates in 2020 as they continue to upgrade their properties to ‘smart buildings.' And even if you are not planning to rent in smart buildings, this surge in rental rates can affect the overall commercial real estate market.

    When it comes to the rental price, you also have to factor in where you will do your business. According to Inc.com, the rental rates from big cities like Minneapolis, Milwaukee, Chicago, and Detroit are continuously increasing. The same goes for cities like Seattle, Denver, Austin, and Raleigh.

    According to SquareFoot.com, rent per square foot from major US cities, like New York, San Francisco, and Los Angeles, averages at $41.82 per square foot per month. It could also increase depending on the lease type.

    In large cities like New York, you can get a 1,035 sq. ft. office for $5,000 a month in the Financial District / Water District / Insurance District. However, if you choose to get an office in Hudson Yard / Far West Side, your $5,000 a month budget will only get you 481 sq. ft. The location of your office affects the cost of your lease.

    If you're looking for lower rental rates, rent could be about $14-$16 per square foot per month. If you're willing to drive about 5-10 minutes away from the popular buildings that charge more than $20 per square foot, you can find decent offices for as low as $12.

    Remember, an office rental rate is also indicative of how much you should charge for your services in your location's target market. If you choose to get an office in the high-end part of your town, you'll also need to charge higher rates. If you get an affordable office, you can charge lower.

  2. Location, Location, Location

    A big factor in the increase or decrease in rental costs is the district location. Even if you are not setting up your business in a major city, rental rates will vary depending on the neighborhood you choose. Is it in the posh and influential part of town? That's going to be expensive. How about getting an office downtown?

    Aside from rental rates, you also need to find a location that's suited to your tax business. Consider the reputation of your chosen district. Make sure your office is not close to shops or offices that have a problematic reputation. Also, since you will be discussing financial information with your clients, you'll want the office space to be in a quiet and secure area. Be sure that your clients will feel comfortable visiting you in that district.

    Given that tax preparation is a service type of business, it's a good idea to have a storefront office in a retail shopping environment. A location that enjoys a lot of foot traffic can help you attract more customers; especially during tax season.

    You can choose an office near shops that are convenient for your clients. For example, choose a space near check-cashing, convenience stores, inner-city supermarkets, car dealerships, and loan retail shops.

    Another good location to consider is an office park. You could capture the market of employees in an office park. Most often, employees would like to get their taxes done before or after work. Getting a space in an office park helps you bring that convenience to your target market.

  3. Office Size

    A tax preparation business does not need a lot of space, especially when you're starting out. A minimum of 1500 square feet of office space is plenty.

    Plan to have enough room for a reception area, a private meeting room, and your private workspace. Don't discount the possibility that your business may expand. If possible, allow enough space for an additional workstation or two.

    In terms of office layout, see that your meeting rooms are not adjacent areas that see a lot of activity. When you're meeting with a client, you wouldn't want them to feel distracted or uncomfortable. Ensure that they enjoy privacy.

  4. Getting Help From Real Estate Brokers

    On hunting for an office space, you can enlist the aid of commercial leasing agents. They can help you find suitable options for your office. Some agents provide their services for free and take their profit out of a commission. Others will require a small fee in advance.

    There are advantages and disadvantages to getting help from commercial listing agents or real estate brokers. Some of the advantages are:

    • Guidance from an expert; especially when it comes to leasing agreements
    • Support in conducting negotiations on your lease
    • Advance knowledge of spaces or properties that may not be available yet
    • Saves you the time and effort of finding spaces on your own

    Some of the disadvantages of getting an agent are:

    • Showing properties that may not be the best for you in favor of a higher commission
    • Not having enough listings to find you a property that fits your office needs
    • May favor a specific property owner or landlord

    Should you choose to work with a real estate agent, see that you meet with more than one. You can get different insights and additional knowledge from having discussions with different agents.

    If you don't want to use a commercial listing agent, you can communicate and negotiate with property owners on your own. Nowadays, finding office spaces can be a breeze because you can easily find available real estate listings online. You can check out office spaces from WeWork, Regus, LoopNet, Commercial Cafe, and OfficeSpace.com. You can also check out the websites of the local real estate companies in your area.

Chapter 7:Acquiring Your Clients

After setting up your office, it's time to work on a business strategy to get clients. As a new tax preparer, you need to establish trust with your peers and potential clients. Apart from that, you need to build a good reputation when it comes to providing services.

The big question is, how do you start acquiring clients?

Acquiring Your Clients

Market Your Business

Before talking to any potential clients, you must have developed marketing tools that are ready to use.

Create Your Brand

Your brand defines the essence of your business. The Dictionary of Brand, written by Marty Neumeier, describes it as "a person's perception of a product, service, experience, or organization." He further elaborates on the definition in The Brand Gap: How to Bridge the Distance Between Business Strategy and Design. He explains, "a brand is a person's gut feeling about a product, service, or organization."

Establishing your business' brand is essential when it comes to marketing it. It's a communication tool from your company to your existing and potential clients about your products and services. It relays what customers should expect from your business.

Your business' brand is more than your logo, store design, or even your product. It is a set of associations that people will identify with your business. Associations of quality, reliability, honesty, trustworthiness, friendliness, and so on. A brand can communicate a lot about your business and its commitments to values and ideals.

For a tax preparation business, what commitments should you highlight?

  • High Accuracy Rate
  • Commitment to Deadlines
  • Trustworthiness
  • Security and Privacy
  • Transparency and Reliability
  • Credibility (i.e., member or affiliate of organizations, certified by IRS)
  • Excellent customer service (i.e., businesses that will accommodate your questions even after the filing season is over)
  • Responsiveness to clients

Consider the descriptions above. Identify which ones you want to emphasize. Apart from that, reflect on what makes your business different from the others. Knowing what stands out about your business will give you an idea of what to highlight versus the competition.

Set a Targeted Audience

Knowing your market is crucial for when you do marketing for your new tax preparation business. If you know your target audience, you will be able to set the tone of your marketing strategies. For example, what type of marketing language or tactics you need for clients who are employed and filing their income tax? How about for clients who own small businesses?

Find out what clients value when it comes to tax preparation in your area. For example, they may value accuracy and reliability. They may also appreciate excellent and accessible communication about their taxes, given that most of them would not be experts. It's better to focus your marketing to highlight your skills in helping your clients understand their taxes.

For corporations and big businesses, you may want to learn more about each businesses' niche or specialization. This may take time. Very often, tax preparers who work with corporations choose to specialize in specific industries. For example, a tax preparation company may solely work on manufacturing companies, while another would specialize in restaurant businesses. If you have such a specialty, you'll want to highlight your company's expertise in that niche to attract the right target audience.

Be aware of what types of tax preparation services you'll be offering your clients. Based on the type of tax returns in which you specialize, you can identify who your primary clientele would be.

Use a channel for engagement

Once you've identified your brand and narrowed down your target audience, you need to plan how you will communicate these things effectively.

Build an online presence

Just about every business needs a website. Even small tax offices. Consumers have adapted to the digital age. In 2019, 97% of consumers used online resources to find local businesses instead of printed directories.

Websites can bring awareness of your products and services to a wide range of clients. When someone needs your service, you can expect them to do a google search to find a service provider⁠—hopefully your tax office. A website is also an excellent tool for showcasing your products and services. And it provides an easy means for anyone to find and contact your office. That makes it the perfect channel for clients to contact you and book a consultation.

Build a stellar reputation using your online profile to attract new customers. Get existing clients to share testimonials and favorable reviews that you can post on the website. In a survey by Dimensional Research, 90% of respondents claimed that reading positive online reviews influenced their decision to purchase a product or service.

Search Engine Optimization (SEO) is an excellent means of enhancing your website's online search ranking. By outsourcing web marketing services to experts, you can get into the top search results for businesses related to tax preparation.

Use traditional marketing tools

Online marketing is hardly the only approach you can take. Don't dismiss traditional marketing tools! Classic marketing strategies still work, especially for businesses geared to services like tax preparation. Services that require a personal touch. Traditional methods can attract clients with the promise of establishing fruitful business-client relationships.

Business cards
Business cards remain crucial to marketing any business. Giving your business card to a potential client establishes both a personal and professional connection that you can build on. Distribute cards at networking events, conferences, parties, restaurants, laundromats, or even the gym. Anytime you meet a potential client; you can readily give your information and make a business connection.

Networking Events & Conferences

Attending conferences to meet people plays into any strategy for marketing your tax preparation business. Getting one-on-one time with potential clients makes a significant impact. They will be more likely to remember you when the time comes to look for a tax professional.

Important note: do not expect to market your tax preparation business in IRS conferences. Instead, attend conferences where you can meet people in your target market. Are you preparing tax returns for small businesses? Attend franchise expos or Chamber of Commerce meetings. And join the Chamber of Commerce's after-hours events or breakfast meetings. Join local groups and get to know their other members, too.

Whenever possible, volunteer to be an event speaker. That gives you a great opportunity to showcase your expertise and attract interest to your business.


Invest in giveaway items to distribute at networking events or conferences related to your industry. These items can help you leave a lasting impression, so that your business comes to mind when tax season approaches.

Direct Mail

Send out a postcard to remind potential clients that tax season is coming. A potential client would appreciate the reminder and be likely to check out your business.

Develop promos and incentives

Whether you're acquiring first clients or wanting to add new ones to your current roster, developing promos can drive interest in your company. Consumers show a lot of interest when they're told that they can save money. Provide an incentive for clients who do early tax filing. If you offer bank products, try a limited-time offer discount.

However, when it comes to promos, do not limit yourself to tax-related items alone. Think outside the box. Dealing with taxes is often stressful; so why not raffle off a day at the spa for your clients?

Run promos and incentives to get your clients interested, and then deliver exceptional service to get them to stay.

Client Acquisition

Now that you've established the marketing tools that you'll use, you can focus more on targeting potential clients.

First clients: Family and Friends

The first clients you should consider acquiring are your family and friends. Why? It's because you have established trust and a good reputation with them before even seeking to offer them your services.

Building a tax preparation business is all about service. The biggest hurdle of acquiring clients is establishing trust. With your family and friends as clients, you won't have that issue to worry about it. Instead, you can focus on providing excellent service, which wins you repeat business and even recommendations. By offering your services to friends and family, who will be more forgiving than strangers, you stand a better chance of learning the ropes and improving along the way.

That will help you refine your skills and processes so that you can provide higher quality services to future clients.

Another benefit of having your friends and family as your first clients is the feedback that they can give you. There won't be any hesitation from them to share what was good and bad about your work. Such honest feedback is vital in learning how to improve your level of service.

Just how do you ask friends and family to be your clients? Explore your immediate circle of influence. Contact Church members, club members, school friends, and relatives. Reach out to them and share that you are starting your own tax prep business.

To people who are employed, you can offer to prepare their income tax returns. To anyone who has a business, you can offer to process their Tax Form 1040's. If you already have a business and would want to expand it by adding a tax preparation service, reach out to your existing clients. You can also offer to prepare 1099s for their businesses, too.

How to convert your friends into clients?

New York Times reported that an average American knows about 600 people. Indeed, there's no lack of people to whom you can market your business. However, it's not the number of your connections but the quality that matters in marketing.

There are four types of people that we know: acquaintances, proximity friends, close friends and family or relatives. All of these make for potential clients. It's important to understand how you can best approach them to convert them into paying clients.


Great opportunities for marketing arise every time you first make someone's acquaintance. When people meet for the first time, they tend to exchange basic information about where they grew up or what work they do. Steer the conversation to talking about your business. You'll be able to inform your new acquaintance of your services. Casually share the services you offer and establish your expertise during the conversation.

It can happen that a new acquaintance doesn't wish to discuss business throughout the conversation, especially if your meeting occurs in a non-professional setting. In that case, you don't want to force business talk on the other person. Read the room. Be a good listener. Get to know the other person first, and learn their wants and needs.

Let's look at how you can make a conversation work as a marketing tool. When you're asked about what you do, say, "I have a tax preparation business. You probably work with a tax preparer already." When they answer yes, try asking about the person's relationship with their current tax preparer. Draw out what they find lacking about their current preparer's services. Identify whether you can fill in those gaps. Then bring up how you can provide those services.

Proximity Friends

Friends you know from work or your commute are generally categorized as proximity friends. These are the people to whom you say hello and chat with briefly on the train or in the supermarket. Since you do not have similar interests, how do you broach the subject of asking for their business?

A good way to introduce your business is by striking up a conversation about a general problem related to tax preparation. Identify any issues your friend might have with their existing provider. Commiserate with them and share the difficulties you've encountered in preparing your taxes. Emphasize how you found solutions that you've since applied in your business. Don't forget to give your business card after your conversation!.

After that conversation, invite your friend out to lunch so you can further discuss how you can help them. This way, you can establish more rapport and build a deeper relationship with them… hopefully leading to a client relationship.

Close Friends

You'll find it easy to have the tax prep conversation with a close friend. They know you well, they're willing to give you the benefit of the doubt. A close friendship means you've developed mutual trust and connection over time. You'll have shared interests and shared experiences. Opening up about your new business will be easy. But asking for their business remains a matter of good timing.

Share your concerns about your business while you're still in the planning stages. Seek their advice on various small details. Later on, invite them to use your services. Let them know they'll be helping you get your business off to a good start..

When you invite them, take care to emphasize your expertise in tax preparation. Tell them how much you've worked on learning the profession. Remind them of the times they've witnessed (first-hand) your diligence in providing a quality service.

Do be mindful of how you invite your close friends. Don't pressure them into doing business with you. If they turn you down, ask them to contact you if ever they change their minds.

Family or Relatives

Don't shy from asking family or relatives for their support! They should be very easy to approach. Offer to work on their income tax returns. If they cannot give you their business, then ask them to recommend you to their friends.

Once you've converted friends and families into clients, deliver the quality of service you've promised them. Don't be complacent that since you already enjoy a good personal connection, you won't need to treat them like a real customer. The key to building a good reputation is striving to do exceptional work for your clients, whoever they may be.

Referral from existing clients

After acquiring clients from within your immediate circle of influence, your next step is to win more business through referrals. Your current clients could vouch for your excellence as a tax pro. They can recommend you to their family and friends.

Your previous clients' testimonies are valuable when marketing your services to potential clients. According to 2015 Nielsen study, 83% of online respondents from 60 countries prefer to get products and services that have been recommended by friends and family. Word-of-mouth marketing is still the most reliable type of marketing for consumers.

Another benefit of acquiring clients via referrals: cost-effectiveness. Your primary investment is providing excellent service to your previous clients, which is the core of what you do. By delivering impressive service, you can get them to start talking you up to others.

But of course, you also need to ask them to provide their referrals. Let's take a look at some ways you can ask for referrals from your previous clients:

Directly ask

Once you've built a good working relationship with your clients, ask them if they could refer you to their friends and family. Better yet, ask them if they know anyone who needs your services. Ask them for referrals through email, phone calls, or in-person. You can even get creative by adding a note at the bottom of your invoices. That way, your clients can be reminded to share leads with you.

Thank your clients for previous referrals

If your clients have provided you with referrals, take the time to show your gratitude. Having a tax preparation business is more than just crunching the numbers, it's about building relationships. Send a handwritten note or thank them in person. Clients will most likely continue giving referrals if they feel their efforts are appreciated.

Offer incentives

People love to receive a gift. Step up your thank you's by giving gifts. Even if it's a simple item like chocolates or a gift card, your client will appreciate it. Tell your client that you'll provide an incentive for every good referral they give. Apart from wanting to recommend you to others because of your excellent service, they'll also be motivated by the gift they'll receive in return.

Create a referral program

Give your existing clients a chance to earn by setting up a referral program. It may be similar to offering incentives, but in this case, you can offer a percentage of a successful sale. You can also provide discounts on your services when a client's referral uses your services, too.

Your clients will be motivated, not only to submit referrals but also to close the sale. They can help you by convincing their referrals to consider your company based on their excellent working relationship with you.

Indirect Referrals

If your clients do not have any referrals for you, ask them to for their testimonials. Ask them to share your website or leave an online review to spread the good word about your tax preparation business.

You can also ask your clients for permission to create a case study based on their transaction with you. Writing a case study shows readers how you would handle particular tax problems, which may be relevant to them. You can discuss this specific case study during conferences or write a blog article on your website. Assure your clients that you won't reveal any personal information when you write it.

Marketing to Your Niche

Beyond your clients and their referrals, you can acquire clients by marketing to your niche. With either traditional and digital marketing, you'll find multiple ways to reach new potential clients.

Networking with Professionals

Another way to market your tax preparation business is through networking with professionals. Reach out to industries that are related to tax preparation, such as insurance, real estate, and banking. Professionals within these industries know possible clients that could need your company's services. Invite them to your referral program in exchange for getting an introduction to a key client or two.

Selling Your Expertise

With a tax preparation business, you want to show potential clients that you have the know-how to get the job done efficiently and effectively. You can achieve this with a combination of traditional and digital marketing.

Volunteering or participating in conventions as a speaker would be one way to demonstrate your know-how. You could discuss a taxpayer issue and explain how you would deal with it. If you cannot be a speaker, participate in the conference via sponsorship. Set up a booth and speak to attendees regarding your tax preparation business. Try to put up an "Ask Me About Taxes" booth, where convention goers can come up to you and ask for advice on tax-related questions.

Content marketing offers another angle for showcasing your expert knowledge. Write a blog article or record a podcast where you discuss tax topics. Find out what questions your potential clients want answered and offer your views on the topic in forums and blogs. Be sure to give your credentials as an expert. You can direct any readers and listeners to your website, where they can learn more about your tax preparation business. Connect through Facebook, Instagram, and Twitter. Use popular social media sites to share your knowledge and bolster your profile.

When tax season is approaching, reach out to local TV news stations or talk shows and pitch to them a segment on taxes. You might land a televised appearance by convincing a producer that people desire clarity on various tax questions and you are the person to provide such clarity. 

You can also reach out to radio shows and local newspapers, in case they want to do a feature on you. Another option, if you can afford it, would be to invest in a paid spot on the TV segment, radio show, or newspaper where you are featured.

Every good marketing campaign involves the strategic application of marketing tools and strategies. Begin with an assessment of your chosen target market. Set your marketing goals and develop appropriate tools that will help you accomplish them. Some marketing campaigns might pay off immediately, while others will take time. Do research to determine what strategies you can implement within the budget you've allocated.

Chapter 8:Tips for New Tax Preparers

New Tax Preparers: Employment vs. Business

People choose the tax preparation business for multiple reasons. Many go into it as a natural extension of their current profession or trade. Lawyers and Certified Public Accountants (CPAs) often obtain their Tax Preparation registration and offer tax preparation as an additional service to their business.

High school graduates go into the tax preparation business because it offers a stable and fruitful career. Anyone who wants to change professions to work in the finance industry can start with tax preparation. It's also an excellent way to build networking connections with professionals in the insurance, real estate, and banking industries.

For those who've never had any tax preparation experience, the question is always whether to seek employment first or establish your own tax preparation business. Once you've earned your Enrolled Agent status and register with the IRS, you can already start acquiring clients and provide tax preparation services. However, you can also choose to be employed as a tax preparer under H&R Block, Liberty Tax Services, or Jackson Hewitt. So, which is the best move?

Well, it all depends on your professional goals. Do you want to specialize in the preparation of income taxes? Do you want to handle tax cases for small and big businesses? Specialization in tax cases requires more knowledge and practice. In addition, many tax cases require tax preparers to have the proper licenses to work on them.

Starting a tax preparation business is generally quite easy. It's no trouble to obtain necessary documents like PTIN, EFIN, and State registrations. The business only requires minimal start-up capital, and you can work from home, at least initially. But a tax preparation business involves more than simply setting up your office. There is a business side and a technical side to it.

The technical side involves getting the necessary paperwork, learning how to do tax preparation, establishing processes, and managing your finances. The business side involves marketing and sales, as well as expanding the business to keep it afloat. If you're ready to take on all of these responsibilities, you can begin to consider establishing your tax prep business.

Should you require more training in handling the business or technical aspects, you should consider gaining employment. Working as a tax preparer for a company exposes you to different types of clients, tax cases, and opportunities. Serving in established firms can help you get on-the-job training for developing various technical skills. Apart from that, you can better understand the business while being part of the company.

Tips for New Tax Preparers

Understanding the Tax Codes is #1 priority.

To be a tax preparer, you need to understand the tax codes. It's the fundamental knowledge required for working in the industry. That doesn't mean you have to know it all. You can't honestly expect that. Various tax codes apply in many different industries. One person can't keep track of them all. This is where specialization comes in.

One of the biggest challenges a tax preparer faces is learning where to find the specific information they need. You'll have a leg up if you're receiving regular news updates straight from the IRS. Use the IRS Tax Code, Regulations, and Official Guidance page as references to the tax codes and laws you need to be familiar with. Make sure to follow Publication 17, the official IRS publication regarding tax preparation on individual tax returns.

The IRS also provides regular updates through Publication 1345. Yet another reference to keep up with: IRS Circulars. Review Circular 230, which is required by all professional tax preparers. Following a new update from the IRS, you may want to cement your understanding by taking continuing education courses.

If you want to continue enriching your tax code expertise, check out the IRS classes under the Voluntary Annual Filing Season Program (AFSP). The program is designed to incentivize non-credentialed tax preparers. They offer Continuing Education (CE) that helps deepen your understanding of the tax code. If you opt to participate, you'll need to complete 18 units of CE every year. For your convenience, you can finish your CE credits online. Work on your units at your own pace, anytime, and anywhere.

Once you complete the 18 units and pass the test, you will receive a completion certificate from the IRS. You will also be included in the tax preparer public directory. Being part of the IRS public directory proves that you have the skills to offer quality tax prep services to clients.

Beyond the AFSP, continue learning about the tax industry by attending conferences and events. Interact with other tax professionals. Listen to other tax pros discuss their case studies. Understand their methods and analyze how you can incorporate them into your own processes.

Remember, as a tax preparer, it is your responsibility to know and be up-to-date with the tax codes. Your clients will depend on your expertise to solve their tax filing issues.

Tax preparation software is a tool, not the overall solution.

Some people consider tax preparation to be an easy career. People focus on perks such as working only from January to April or working from home. There's also a misconception that with tax preparation software, tax preparers only need to enter their client's data and that's all there is to it.

That is not the case. Tax preparation software gives you a powerful tool, but it won't offer the solution to every one of your clients' tax cases. A tax preparer should not be too reliant or dependent on software. You use tax software to help you streamline procedures and get the job done more efficiently. You don't use it to answer all possible tax questions.

A tax case is like a puzzle that a tax preparer must solve through analysis of your client's data and understanding of the tax codes. Each tax case is different. It may have a lot of things in common with other cases, but that doesn't mean you can apply the same solution. This work requires skilled interpretation and implementation. It's not limited to inputting data on tax preparation software.

Clients look for the best tax preparers.

The tax preparation business is very personal in nature. Clients entrust tax preparers with their personal information and financial data. When clients look for a tax professional, they look for someone whom they can trust.

As a tax preparer, you have to build relationships to create that trust. You also have to work on establishing a fine reputation. Here are the attributes to aim for if you are to succeed in marketing yourself as a tax preparer:

Credibility and Expertise

You want to have a reputation for expertise and credibility. A client needs someone who can help them navigate their tax requirements. Gain confidence through learning the ins and outs of the tax industry, especially the tax codes.

Honesty and Reliability

A tax office hardly needs flash or exuberance. Paying taxes is a reality that everyone needs to face. Clients are not looking for tax preparers who wish to impress them with bells and whistles. They are looking for someone honest and reliable.

The tax season runs from January to April, a scant few months. But clients sometimes need help with taxes during the off-season. A good tax preparer can be relied upon for consultation even during those times.

Clients also need honest tax preparers. If there's a problem with their taxes, clients would want to know if you can tell them straightforwardly. If there's an issue. In such cases, it is better to face it head-on, in a prompt manner, because penalties could be involved. Clients seek the type of professional who is not afraid to inform them of issues and arrive prepared with solutions.

Relatability and Good Customer Service

Clients also look for tax preparers that they can relate to. Apart from sharing their financial documents, clients need to personally discuss their financials with you. This means sharing information that is sensitive and confidential. New clients may have a hard time talking about these things with a stranger. A tax preparer must know how to establish good rapport and build relationships with clients.

Of course, clients also look for excellent customer service. Tax cases do get complicated. Clients are likely to ask a lot of questions. These aren't limited to questions about filing taxes. Many clients will want to know their next steps afterward. If a client receives any letters from the IRS, they would need someone who can help them handle it.

Excellent customer service does not end with tax-related issues. You'll also want to help them acquire your services, schedule appointments, and pay your invoices. Make these things easy and painless for them. If problems arise, you should be able to provide solutions.

Get the best tools that'll help you grow your tax business.

You've successfully started your tax business… now what? You now have to think about how it can grow. When you invest your money into buying equipment, services, or tools, you'd do well to get those that not only fit your budget, but offer top-of-the-line quality. The key is determining what would be a good return for your money.

This is especially important when deciding which tax software product to purchase. You need reliable, accurate, and easy-to-use tax software that provides the best value for your investment. Remember, you are not just purchasing a program for your office. You are purchasing the core tool with which you will build your entire business.

There are many factors to consider when selecting professional tax software. Look into the program's price, accuracy, ease of use, and features. Apart from the program itself, you also have to find one that comes with excellent customer support.

UltimateTax has great features at the most affordable price. You can choose between several versions: UtimateTax 1040 Online, UltimateTax 1040 Desktop, and UltimateTax 1040 Desktop + Corporate, and UltimateTax PPR. You can review each products' features to find one that fits your business the best. All of them come with Smart Diagnostics, State Modules, Context-Sensitive Help, Interview Mode Entry Forms, Easy-to-use interface with its own User LaunchPad, and Year-round Support.

Another advantage of getting UltimateTax: its bank products. You can earn more and offer more solutions to your clients through bank products from trusted banks like Santa Barbara TPG and EPS. You can even cut costs and get your UltimateTax software free for the next year's tax season, if you can sell 30 or more bank products in one year (using UltimateTax and Santa Barbara TPG).

If you need to know more about how UltimateTax can help your business grow, check how UltimateTax fares when compared with other available tax software. You'll see how much value this professional tax software can provide to your new business.

Learn more about UltimateTax by getting the first-hand experience. Click on the links below for your free demo:

UltimateTax 1040 Online UltimateTax 1040 Desktop UltimateTax PPR