Exploring a Career in Tax Return Preparation – Seeking Advice
Hello everyone! I recently left my position as a probationary employee with the IRS and am considering the possibility of working for myself instead of diving into another 9-to-5 job right now.
To give you some context, I earned my Master’s in Accounting in May 2023, and I’m a licensed CPA. During my time at the IRS, I focused on auditing tax returns for small businesses and self-employed individuals, primarily working with Schedules C and A. While most of my experience has been in auditing through public Accounting, I do have some tax preparation experience as well.
As I think about starting my own Accounting practice, it would begin as a solo venture. My initial services would be Bookkeeping for small businesses, but I also want to offer tax return preparation when the next tax season arrives. To start, I plan to focus on individual returns and sole proprietorships until I’m more comfortable with partnership and corporate tax returns.
I’m curious about how feasible this plan is. What should I keep in mind as I move forward? Any advice or insights would be greatly appreciated! Thank you!
One response
Starting your own Accounting practice can be a rewarding venture, especially given your educational background and experience. Here are some key considerations and advice to help you on your journey:
Business Structure: Decide on a legal structure for your practice (e.g., sole proprietorship, LLC, etc.). Each has its own implications for liability and taxation. Consulting with a lawyer or a business advisor might be beneficial.
Licensing and Compliance: Since you’re already a licensed CPA, you’re in good shape, but make sure you understand any additional licensing requirements for preparing taxes in your state. Ensure you’re compliant with IRS regulations and state tax laws.
Client Acquisition: Building a client base is crucial, especially when starting out. Networking is key—leverage social media, local business groups, or professional organizations to connect with potential clients. Consider offering free workshops or informational sessions to showcase your expertise.
Software and Tools: Invest in reliable Accounting and tax preparation software. Popular options include QuickBooks for Bookkeeping and programs like TurboTax or Drake for tax preparation. These tools can streamline your processes and help ensure accuracy.
Market Research: Understand your target market. Research small businesses and individuals in your area who may need your services. Adjust your pricing accordingly to be competitive but fair.
Niche Focus: Since you have experience with small businesses and sole proprietorships, consider positioning yourself as an expert in that area. This can differentiate you from competitors and attract clients needing specific services.
Continuing Education: Tax laws frequently change, so staying updated through continuing education classes is essential. This will not only enhance your knowledge but also build trust with clients.
Service Offerings: You mentioned starting with individual returns and sole proprietorships, which is a great idea. As you gain confidence and experience, you can gradually expand to partnerships and corporations.
Marketing: Create a professional website and consider social media marketing to reach more potential clients. Testimonials from satisfied clients can help build your reputation.
Work-Life Balance: Starting a practice can be demanding, so be prepared for the workload—especially during tax season. Set boundaries to maintain a healthy work-life balance.
Insurance: Look into professional liability insurance. It can protect you against claims from clients who may allege mistakes in your work.
Starting your Accounting practice may have its challenges, but with dedication and a solid plan, you have the chance to build a successful career doing what you love. Good luck!