DaJobSucks

Home Based Tax Preparer

Written by HmD on 9/03/2008 05:59:00 PM

Tax preparation from home, though it provides income seasonally, is a great way to earn extra money to cover your bills or make a descent living if it is done full time. On average, home based tax preparers earns about $1,700.00 per month preparing returns for 19 to 20 persons. Some can earn up to $5,600.00 per month during the tax period. What makes the earnings even more enticing is that being a tax preparer from home requires little initial expenditure and it is easy to start and operate. Even though a home based tax preparation business is relatively easy to operate, there are a number of things that should be considered if you would like to be a home based tax preparer. You should consider, training and certification, the basic equipment necessary to operate, service rates/fees, promotion and customer care.

Training and Certification:

Nothing is worse than service providers who have no idea how to provide the service they offer. Training and certification is key if you are going to run a successful home based tax preparation service. If you are a CPA or have worked as an Accountant, this business should be easier for you, however, for those who have no accounting experience or education, you should seek to complete a training course surrounding taxation. The IRS offers training courses in return for your volunteer service on their tax help line. Companies like H & R Block and Jackson Hewitt also offers affordable tax courses. The advantage of doing a tax course is not only that you will have the required skill to file returns but prospective clients will be more willing to use your services.

The basic equipment necessary to operate :

You will require a computer, a taxation software and internet access. In the past, taxation was done manually and therefore was more likely to be inaccurate and time consuming. With technology however, returns can be done quickly and more accurately. Along with accuracy and the speed at which returns can be done, most software ensures that all the required information is included in the return, returns and other information can be easily stored for future reference, returns look more professional and you can file returns online using the tax software. There are many tax software's available on the market, but the software that most home based tax preparers use is Turbo Tax.

If you plan to complete manual returns, then you should consider downloading the required forms from the IRS website. The forms you may need are as follows, 1040 and 1040EZ, schedules and supplemental forms, as well as the 1040, 1040EZ, Schedules and supplemental forms. You should also ensure that you have a good supply of stationary like, Pocket folders, Labels, Paper, Paper clips, Staples etc.

Service Rates/Fees:

The fee structure you choose should be equivalent to what the market offers. Overpricing services is one of the most prevalent mistakes that home based tax preparers make. They offer rates that people are just not willing to pay, especially when you consider that tax software is readily available and pretty easy to use if a client decides to do their own taxes. Your best bet is to research the market to see what the average charge out rate is and ensure that your rates are at the market rate or below it.

In general, starting home based tax preparers charge $90 per return. The more experienced tax preparers may earn up to $120 per return. We should note however that the charge out rate is not always fixed and is highly dependent on the complexity of the returns, the availability of information to do the returns and the cooperation of the client.

Promotion and Advertising:

Home based tax preparers usually find it difficult to get the necessary number of clients to make their service viable. A number of measures can be taken to increase your client base and are as follows:

• Seek clients within your family first. Most home based tax preparers start by doing returns for members of their family;
• You can also approach close friends with your service, who, can in turn spread the word to their friends;
• Charging rates below the market value can also be a good means of promoting your service. Some charge up to half of the average rate in order to steal clients from their competitors;
• Social networking is also a good way to increase your customer base. Since you have approached family and friends already, you should try to meet new people and at the same time, tactfully introduce your service to your new acquaintances;
• Some have advertised on websites or have set up their own sites and have advertised with google;
  
• You can also advertise your service on Craigslist or your local newspapers; and
  
• You can advertise on Bulletin boards, hand out fliers and business cards or distribute brochures which gives details of your service.

Customer Care:

As with any business, customer care is critical to you keeping the customer base happy and committed to your service. To encourage good relations with your clients you must:

• be dependable and have a track record of filing returns in a timely manner;
• always be courteous;
  
• be available for queries;
• provide copies of returns that are professionally done, neat and without inaccuracies; and
  
• be responsive to the needs of the client.

Simple actions like placing flags where clients most sign their returns, returning calls as quickly as possible and providing a professional folder with the delivery of the copy of the clients returns, can positively impact the relationship between yourself and your client.