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    12 Replies Latest reply on Mar 7, 2009 7:33 PM by herpipau

    New to the Forum- How Do I Start My Own Tax Business??

    Tiki06 Wayfarer
      I am currently an auditor at a CPA firm, I previously worked as a contract auditor for the Department of Defense. At some point I'd like to start my own small business, something I can do from home. I'm interested in starting a tax business because there will always be a need for tax professionals. My issue is that I have a BBA with a concentration in Accounting but I have never taken a tax class. I'll be taking a tax class this summer to qualify to sit for the CPA. I'd like to if any has any advice on how to learn as much about taxes as possible or about starting my own tax business?
        • Re: New to the Forum- How Do I Start My Own Tax Business??
          LUCKIEST Guide
          How Do I Start My Own Tax Business Easy, I did it, You can do it.
          First welcome to this web site. Not that it makes any difference, but where are you.
          Being an auditor at a CPA firm is a great start.
          A Business and marketing Plan would help.
          Do you know about SCORE?? SCORE is FREE and they can help you start
          your own tax business.
          I can also help (and there are other accountants on this web site) if you have specific questions.
          Good luck, LUCKIEST
          1 of 1 people found this helpful
            • Re: New to the Forum- How Do I Start My Own Tax Business??
              Tiki06 Wayfarer

              I'm located in the DC Metro Area. No I do not know about SCORE, can you tell me more about it and how I can gain more tax knowledge?
                • Re: New to the Forum- How Do I Start My Own Tax Business??
                  BarbTNMUSA Wayfarer

                  To find the SCORE nearest your location, all you need to do is go to http://www.score.org/findscore/index.html
                  , enter your zip code and wait for the search results. SCORE can be a wonderful resource as well.

                  Another thought I had after leaving this forum earlier today is that you will no doubt need a business bank account when you start your own business so why not start building a closer relationship with your bank today by asking their business banking staff for some assistance? I've been a Bank of America customer since the early 70s and one of the things I learned early on in running my own business is strong banking relationships are vital to your long-term success. I've had at least one business account with Bank of America since the early 80s and while I can't speak for the competition I can tell you that the B of A branches I've worked with all had staff who were sincerely interested in helping me find answers to my small business challenges. You will want to get a bank officer assigned to your business account early on and you will find that task easier and more fulfilling if you start building a relationship with your banker now. They love networking with professionals, especially CPAs, and you will find that they already know your local SCORE representatives and other business leaders who can be of great value to your education as well as building your business.

                   

                  Barb T., New Mexico USA
                  About Barb - http://www.westward.com/people/barbt.htm
              • Re: New to the Forum- How Do I Start My Own Tax Business??
                BarbTNMUSA Wayfarer

                Aside from enrolling in classes, the first thing you might do to get a good picture of what goes on in a tax business is to work part-time for someone already in the business. The next step is to learn as much as you can about starting and running your own business while studying for your CPA exam. Few individuals pass the CPA exam their first time around and most take a Becker or other study course to help improve their chances of getting through it faster. Put your mind to it, block out interruptions, and you will do fine.

                I only discovered the B of A Small Business Online Community today but can already tell it will be a valuable tool for new business owners as well as those of us who've been around for a while. Here are some external links to help you get started with your business start-up education:
                AICPA Professional Resources - http://www.aicpa.org/Professional+Resources/ . Be sure to note the Public Accounting Firm resources on that page. You will find the marketing tool kit invaluable down the road.
                Entrepreneur Magazine's Starting A Business - http://www.entrepreneur.com/bizstartups/index.html
                Small Business Administration, and particularly the SBA Business Start Up Assessment Tool - http://www.sba.gov/ - link to the tool is available from the home page.

                As an aside, I've been married to a CPA for over 30 years, met him while we were both working for one of the top 3 CPA firms in the world. He wasn't certified at the time but it was a contingency in our getting married . He is currently a CFO in industry but also has his own practice. Throughout the years I've been the one responsible for business development and have served as the primary strategic business and marketing consultant for many of his clients. Here's the thing -- cash flow is king -- you need to be prepared to work 24/7 until your business generating more revenue than expenses. Before you start, ask yourself if you have the discipline to do that.

                Barb T., New Mexico USA
                About Barb at http://www.westward.com/people/barbt.htm
                1 of 1 people found this helpful
                • Re: New to the Forum- How Do I Start My Own Tax Business??
                  dublincpa Scout
                  It seems that you are already aware, there is a huge gap (no pun intended) between the accounting that you are used to and tax. As with most everything else in life, the most important learning you do is after the class ends. I would strongly recommend trying to work part time or perform per diem work for another practitioner in this area first. I wish I could count the number of mistakes I have made or almost made.

                  Tax practice carries a higher E&O premium than even audit (except public cos) because it is the most most problematic area. Faster than you can imagine, you will run into situations for which you are not equipped. This will always be the case, but you have no idea how quickly one can screw up something one doesn't even know about.

                  I don't want to discourage you. It's what I do and I love it. However, I strongly recommend getting experience under your belt with someone who has been around the block.

                  Good luck.
                  1 of 1 people found this helpful
                  • Re: New to the Forum- How Do I Start My Own Tax Business??
                    Wingman Adventurer
                    Hi Tiki06,

                    You've gotten some really good advice from other members of the community.

                    Here are a couple of other things for you to consider when deciding whether or not you want to branch out into the tax world.

                    What type of tax will you be focusing on? Corp, Partnership, Estate & Trust, Personal? There is a world of difference in these areas.

                    Do you want to constantly try and track down new customers with shoe boxes or do you want to deal with corporate type accountants and bookkeepers?

                    You'll need to do a lot of reading and learning before you can comfortably/confidently hang your shingle out as a tax preparer. As stated in an earlier reply, the E&O part of tax prep is scary.

                    Not to bash CPAs but in my experiences, they have not always made the best personal tax preparers. The ones I've interacted with did personal income tax returns as a side to their 'Day' job just because they thought it would be easy money. As a former Enrolled Agent with over 15 years in the tax business, I still don't have a whole lot of respect for most CPAs.
                    • Re: New to the Forum- How Do I Start My Own Tax Business??
                      Tiki06 Wayfarer
                      I'd like to thank everyone for all of the advice I've received so far. My main reason for wanting to have my own tax business is because I'd like to make extra money and I believe there will always be a need for tax professionals. I do realize that I have a lot of work ahead of me. Thanks everyone for your responses and I welcome any further advice you may have to offer.
                        • Re: New to the Forum- How Do I Start My Own Tax Business??
                          BarbTNMUSA Wayfarer

                          Should I be reading between the lines here in that your desire for pursuing "extra money" is more urgent than the time required to get your tax business started and generating the cash flow required?
                            • Re: New to the Forum- How Do I Start My Own Tax Business??
                              Tiki06 Wayfarer
                              Actually its not lol. I like what I do and I make good money doing it. I would mainly like to work on my own terms. Meaning I am tired of waking up going to an office to do work that can be done from home. I also do not enjoy sitting in a cubicle during "down time" doing nothing. I would just like to be able to work whenever I want to. I would love instant results but I know that I will have to put in some serious work to achieve the goals I have set for myself. Ultimately I would love to become a fraud investigator. I'd like to obtain, at the least, my CPA and CFE, I am also considering other professional certifications. I know achieving my goals willl take time and hard work so I am willing to put in the time and all the needed effort to accomplish those goals. Me realizing how much I truly hate waking up in the early mornings made me think more about eventually having my own business which I could do part time and set my own hours and do auditing part time until I've obtained those professional certifications and obtained the experience needed to move toward a career in fraud investigations.
                                • Re: New to the Forum- How Do I Start My Own Tax Business??
                                  BarbTNMUSA Wayfarer
                                  Awesome news from your end, Tiki! Thanks for providing further insight into your situation. I hope you will post what you wrote in a special place somewhere that will serve as reminder of "why" you need to continue your pursuit. I earned my Certified Identity Theft Risk Management Consultant designation this past fall. It is turning out to be a great complement to the work of my husband, the CPA. He is able to offer his clients a value-add they had never contemplated previously. My interest in doing so came as a result of my volunteer work on a Homeland Security committee at the state level. I personally think you will find a bigger opportunity in following the pursuit of fraud risk management consulting, but of course, you will have more "punch" doing it as a CPA.

                                  You're on the right track. There's a lot to be said for "Fail to plan; plan to fail." I'm looking forward to your progress reports.

                                   

                                  Barb T., New Mexico USA
                                  About Barb - http://www.westward.com/people/barbt.htm
                                    • Re: New to the Forum- How Do I Start My Own Tax Business??
                                      Tiki06 Wayfarer
                                      What services do you provide with your Certified Identity Theft Risk Management Consultant designation? I do plan on working my way up to my CPA. I'm currently in the process of studying for my CFE. I'm hoping to obtain that certification early next year and then move on to the two classes I need to sit for the CPA. I got a promotion this summer so my partner is definitely pushing me to work on my next promotion and the CPA in order to eventually be promoted to manager. I have a lot of ideas but I'm definitely trying to gain as much knowledge as possible so I can make the right decisions.
                              • Re: New to the Forum- How Do I Start My Own Tax Business??
                                herpipau Wayfarer
                                Starting you own tax business shouldn't be a problem. Most of the tax preparers working for CPAs or other well-known tax practices only take a 2 weeks training but If you are going to be in business for yourself you need more than that. The most important thing that you should keep in mind is how you're going to retain your clients and the only way to do that is through the service you are going to offer. I started my practice not long ago and I realized that you need more than the basics. Personally, I took five tax classes along with my Masters and I plan to take 2 more. The bottom line is: learn as much as you can so you spend less time on returns in order to increase your revenue and know what clients not to accept to avoid problems with the IRS.