Making money as a tax preparer is definitely doable. You’ll make more money as a tax preparer if you do certain things, in certain ways. Here are five factors to consider when seeking to maximize your earnings as a tax professional.
How to Invest in Tools
There are dozens of great tools that do most of the tough math for you, allowing you to prepare more returns more quickly. Learn which tools are the best in the business and which are vital for your job. If you can use the right programs based on your needs, you’ll be able to make more money over time.
Make a list of the top 3-5 attributes you need out of any particular tool. This way you won’t overspend on bells and whistles that may be nice but will increase your costs of doing business. A big part of making money as a tax preparer is keeping your costs low.
If you want to make money, you need clients. This means knowing the basics of marketing—including how to track where your money is going and having some way to measure how effective your marketing has been. Knowing how to attract clients to your small business instead of to a major tax preparer will help you to keep money flowing in.
Tax Code Changes
The tax code is a massive beast, and this massive beast was recently altered to a significant degree. The recent change to the tax code has opened new types of tax liability for some clients and removed them for others, and you need to be up to speed on all the changes. Knowing the basics isn’t enough if you’re going to portray yourself as a competent tax professional; you need to know how these new tax changes will impact your clients.
Who Is Your Ideal Client?
It’s very important these days to know about your “Ideal Client.” There are some tax preparers who think “I can do taxes for anybody” but in reality these tax preparers rarely make the most money. Being a generalist is tough these days, finding a highly profitable niche client group is key to maximizing your earnings. There are a number of great client niches that you can choose, and keep in mind you don’t have to only work with that client group, nevertheless it helps tremendously to know which clients you’re best suited to serve and create marketing messages that speak to that client group’s needs and issues.
Paying Your Own Taxes
Ironically, one thing that really decreases the net income of certain self-employed tax professionals is not budgeting to pay your own taxes on your income from your tax preparation work. If you’re a solo tax preparer, you’ll be working for yourself – and that means you’ll be paying your own taxes. Taking the time to estimate your taxes and to put back an appropriate percentage of what you make before you file is a good way to avoid having your net income severely haircut by Uncle Sam; after all, it’s not what you make that matters most, it’s what you keep.
Hopefully these tips have given you some insight into how to maximize your earnings as a tax professional.
Please feel free to check out our library of tax training courses to keep your earning power always moving upward.