Benefits of Becoming a Tax Professional
Should I become a tax preparer? That is a common question that we get to discuss with entrepreneurs on a daily basis. Becoming a tax professional is not glamorous, but it does place you into an industry that has proven over the years to be stable and in demand. Become your friends, family, and clients’ go-to guy or gal for tax services, questions and issues. Just about everyone in the country has to file a tax return. That is a big pool of potential clients! Competency does not require a 4 year college degree or greater, but mastery and work flexibility are more closely associated with dedicated and persistent ongoing training. Along with the universal appeal of this profession, take a look at a highlight of just a few the other benefits of becoming a tax preparer.
The traditional busy season for tax preparers is less than 4 months long. While this translates to a few very busy months, it also means that the other 8 months of the year offer you great work flexibility. Depending on whether you choose to be self-employed or go to work at a company or firm, you could have even greater work flexibility. Most tax software platforms now allow you the ability to work from anywhere, even your home. Recent updates with the IRS and in the paperless office technologies area allow you to cut the cord to the printer. While we tout the seasonality of the tax industry as a benefit, the tax industry provides the diversity of so many different types of returns and services which can more than keep you busy year round.
A major benefit of becoming a tax professional and running your own office is that it is common to earn a year’s salary in a few short months of hard work and long hours. Alternatively, if you cross-train in multiple areas of taxation, such as corporate taxation, immigrant tax services, payroll and bookkeeping, you can keep the revenue flowing all year long. If you are working for yourself, you’ll obviously make more money per return that you prepare. However, managing your own tax business includes the responsibility to manage additional business expenses. You will also set prices such as typical market pricing for individual tax return preparation rates of between $200 to $400 per client. These rates depend upon return complexity and your experience and expertise. This is unlike becoming a tax professional employed by another tax preparation company where you are simply required to follow their business model. This process is common when many preparers begin their careers learning the proverbial ropes by working at one of the nation franchise tax prep businesses. This is in contrast to when you own your own business: you set the price, control your work flexibility and determine the level of service for you clients. As well, many successful tax preparation businesses combine other financial services to synergistically expand their services to a year round clientele. Here, your education and on the job experience directly translates into a skill that you are able to multiply as you control the business, manage employees and build your own clientele.
No matter how long you have been working as a tax preparer, you are constantly learning new information and updating your knowledge base. As mentioned before most tax professionals get their start working for an account firm, national tax prep chain or working with the back office support of experienced professionals. The foundational knowledge learned always stays with you and is the perfect stepping stone to becoming a tax professional entrepreneur and running your own tax business. Understanding tax preparation and tax law will bleed into your personal budgeting and finances and should allow for you to make education decisions on planning and managing your own household finances. Knowledge truly is power in this detail intense industry. The more you know, the more valuable and in demand you will be to your clients, and the more justified you will be in your steadily increasing pricing structure.
As the saying goes, only two things in life are inevitable: death and taxes. While an overhaul of the tax system being long overdue; the general consensus is that change is still a long way off, and when it does happen it is still likely all working Americas will still need to file a tax return annually. Over the recent years we have seen a significant increase in the complexity of even common individual tax returns. The addition of health care and other federal and state subsidies being tied to tax filing, further pushes general tax filers to look to the assistance of tax professionals to help them navigate the complex web of forms, schedules, and worksheets necessary to get a return completed properly.
*Tax preparation is not right for everyone. However, if the benefits of being your own boss and having work flexibility sound of interest to you, consider entrepreneurship and becoming a tax professional. If you would like to learn more about starting your own tax preparation service or just get more info on the industry, give us a call or send us an email. Federal Direct would love to chat and go into more details to see if being a tax preparer might be the right career for you!
Posted: July 7, 2016