Pronto Tax School

5 Ways for Tax Professionals to Earn Money When It’s Not Tax Season (Without Creating an Unrelated Business)

tax preparer camels

By Andy Frye

A camel can go seven months without drinking water.  Tax preparers can go without making money for up to 10 months.  Congratulations to both camels and tax preparers on our unique capabilities.

tax preparer camels

I wonder though if camels would choose to go without drinking water for seven months–if there was water nearby.  I doubt it.  If a camel saw a pool of water near him or her, he or she would probably stroll over and drink up, wouldn’t you agree?

If you’re a tax preparer who’s looking to make some decent money when it’s not tax season, instead of sitting there watching your stack of tax season cash dwindle into oblivion, this blog’s for you!

Reasons for the Decreased Seasonality of the Tax Business

We see three major trends driving increased opportunity outside of tax season:

  1. Increased complexity.  Overall, the complexity of the tax system is way up over the past 10 years.  The typical taxpayer filing outside of tax season has a more complex situation.  They need more time to wait for their 1099-Bs or their K-1s, or finalize the bookkeeping for their various businesses.
  2. More self-employed people.  Statistics suggest that 34% of workers are self-employed.  By 2020, it’s projected to be 50% self-employed.  As you know if you’ve tried it, filing your tax return when you have self-employment income is nothing to get excited about.  “Extend and pretend”!  Are you ready to upgrade your tax career and take advantage of this trend towards more and more people becoming self-employed?
  3. More people with tax debt problems.  Going right along with #1 and #2…more and more people owe back taxes, haven’t filed in years, and similarly screwed up situations.  Over 13 million taxpayers are in collections with the IRS.  The issues has become so bad that IRS has recently started using private debt collectors.

Understanding these big picture trends will help you capitalize because you’ll have an understanding of what “types” of clients need your help when it’s not tax season.

big picture

Year-Round Revenue Sources for Tax Preparers

OK so let’s run through the opportunities, we won’t be able to delve fully into each pool, but let’s wet our snouts and get a taste.

Note that NONE of these opportunities involve doing anything other than tax work.

All of these opportunities “fit” with your overall mission to be the best tax professional you can be.

1. Rental Real Estate-Related Tax Preparation

People who hold rental real estate often file late, especially LLCs structured as partnerships.  Attend some Meetup.com groups related to real estate investing.  You’ll pick up clients whose tax preparers are out to lunch and here you are, representing.

2. Self-Employed Tax Preparation

They don’t want to file.  They dread the thought.  But they have to.  They need your help.  They need your help so, so bad.  They’re going to have questions, after you tell them how much they owe, about getting off Schedule C into a different business structure.  Are you ready to upgrade your tax career so that you feel comfortable and confident performing corporation, S corporation, and LLC tax work?

3. Tax Consulting for Start-Up Businesses

We are in a Golden Age of Start-Ups right now.  What do start-ups need more than anything?  Tax and accounting advice.  How do you fill this need in a way that’s profitable for you?  We’ll have more training for you down the road on how to “monetize” a start-up consultation, but for now, just letting you know the opportunity is huge in this area.  And the work is not particulary difficult.  It’s basically (almost all the time) the same questions every time.

entrepreneur

4. Tax Problem Resolution

Whether it’s helping set up an Installment Agreement, setting a debt for less than is owed through the Offer in Compromise program, or getting a troubled taxpayer placed into “non-collectible status,” taxpayers with tax problems need help now.  If you’re not an Enrolled Agent or Annual Filing Season Program (AFSP) participant, you may think that you can’t do any of this type of work.  Not true!  You can still help, but you just need the taxpayer to be present while you’re helping them.  This area of work can be a little tricky–most pressingly, if they won’t pay the IRS then they may not pay you–but as long as you handle it properly, you can definitely make some money fixing tax problems.  Great way to pick up tax prep clients, too.  If you’re looking for training in this area, we have previously invested in Michael Rozbruch’s Tax Resolution Training Systems and can tell you it’s quite an excellent program, if you plan to add tax problem resolution services to your tax career.

5. Tax Consulting for People In Retirement or Approaching Retirement

Similar to the trend towards ever-increasing levels of self-employment, the Aging of America is a demographic shift that presents tremendous opportunity for tax preparers.  Mainly due to the fact that something like $25 trillion dollars is stacked up in tax-deferred retirement accounts (IRAs and 401Ks), massive numbers of taxpayers in retirement, or approaching retirement, urgently need to look at their projected tax situation in retirement. These people are in the “danger zone” of paying a lot higher taxes in retirement than they anticipated, and some of them are starting to wake up to that fact–and they’ll be looking for savvy tax pros to help them address this issue.

Issues to consider during this type of consultation include but are not limited to:

  • Possible conversion of Traditional to Roth IRA
  • Effect of Required Minimum Distributions (RMDs)
  • Asset transfers to the next generations
retirement tax consultation

Rebranding the Off Season

This blog has gone on long enough–as usual! 🙂  “If I had more time, I would have written a shorter letter.”

I guess I would just close by saying, if you’re really serious about making money year-round, strongly reconsider your use of the phrase “the off season.”

At Pronto Tax School, we are in the process of rebranding the off season.

It will now be called “Freedom Opportunity Season.”

We have the freedom, as tax professionals, to pursue opportunities.

Even if your opportunity is to not do much work, and lay back, that’s OK–that’s still an opportunity, and, this time of year, we have the freedom to pursue it.

For you tax pros who do want to bring in some money year-round, hopefully this blog post gives you some actionable ideas.

Don’t forget to build your sales skills so that opportunities turn into actual money

So far, I’m the only one I know of who uses the phrase “Freedom Opportunity Season” instead of “off season,” and I’m therefore asking:

Will you join me, friend???

5 Ways for Tax Professionals to Earn Money When It’s Not Tax Season (Without Creating an Unrelated Business)
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