How Tax Pros Can Add New Revenue Streams?

So You’re a Tax Pro Now

All right!  Now you’re a working tax professional.  Those of you in California have completed your CTEC requirements.  You know…you’ve completed an approved 60-hour course, purchased a bond, and registered with the IRS for your tax preparer identification number.  Many of you will also file for an EFIN.  That’s what the government requires. Have you had your mind on adding new revenue streams?

Employers and prospective clients require more than these “bare minimums,” right? 

You need to know how to use a computer.  Then, you’ll need to understand how to effectively utilize the tax software your employer provides or whatever type you buy for yourself.  That “free time,” after April 15th each year is just as important as the busiest day of Tax Season!  

In order to succeed in the tax profession, there is a lot required of tax professionals during our “Offseason,” (April 15th until December 31st).  We have a saying that “the offseason is when champions are made.”  Couldn’t agree more.   

Master the IRS Schedule C

The best use of your time if you plan to profit from self-employed taxpayers will be to master every aspect of IRS Form Schedule C.  Pronto Tax School has a fantastic course called Schedule C Mastery.  Not only is the course a great way to grow your tax career, but it is affordable and can generate a positive ROI (return on investment) very quickly as you put your knowledge to work in helping real clients who pay you real money.

Learning the information included in Pronto’s Schedule C Mastery will qualify you to take on those more complicated tax returns from self-employed taxpayers utilizing Schedule C’s.

Remember, we must charge the clients.  I charge based on the complexity for our work on each Form Schedule C.  What work is left for me to do?  Some clients do not keep their books every month despite truly needing to. 

Offer Bookkeeping Services

That’s either an opportunity or a nightmare, depending on your skillset.  Then you need to be charging for the bookkeeping and the P&L preparation, at the very least, when clients show up unprepared.  In that situation, you will either need to have a bookkeeper you regularly work with, or you need prepare the books yourself.  Hence, add new revenue streams!

The tax offseason is ideally timed for learning tax law changes and increasing tax knowledge in areas where we are weak.  It’s also a fantastic time for re-organizing our businesses to be more efficient.  

Then we all have time to add a revenue stream related to the needs of current clients.  When we add a revenue stream, we also experience the benefit of attracting new clients. And then, everyone deserves some vacation time, right? 

That hard-earned time off is meant to be enjoyed as much as possible.  But in order to play hard, we need to consistently work hard, too.  Potential solutions are to add more tax clients, raise prices, or add an additional revenue stream.  I would add an additional revenue stream before I would raise my prices.    

There is a Need for Bookkeepers

Adding bookkeeping services does not require a complete practice overhaul.  If you do not currently have small business clients requiring bookkeeping assistance, offering bookkeeping services will help you to attract them.  Many sole proprietorships need help with keeping their books and filing their tax returns.  There is literally a shortage of bookkeeping professionals available! That’s why adding bookkeeping to your menu of services is a great way to add new revenue streams.

I’ve included a link here to a great article from back in 2019 predicting an upcoming bookkeeper shortage: 

The Looming Bookkeeper Shortage

The potential to automate bookkeeping (avoiding manual data entry of transactions) is another major development in the world of bookkeeping, that makes offering bookkeeping much more appealing and profitable if you are able to automate much of the work.

Most self-employed Americans run their business as a sole proprietorship.  The IRS requires sole proprietors to report that tax year’s income and expenses on IRS Form Schedule C. 

As of the writing of this article, nearly 50% of everyone working in the United States of America is technically self-employed in some form or fashion, according to the Internal Revenue Service and many states. 

There is A Lot of Opportunity

Those folks driving for Uber, Postmates, Doordash, or Lyft are all considered self-employed until legislation is introduced in their state to change that fact.  They are all paid as independent contractors.  

Taxpayers driving for Lyft or Uber don’t necessarily need bookkeeping services ,but they still must file a Schedule C with their Federal Form 1040.  That means you need to know how to utilize an IRS Schedule C within our laws.

Again, here is the link to the Pronto Tax School course Schedule C Mastery. The Pronto course is the fastest path to learning what you need to know to increase your value or grow your practice.  What the Pronto Tax School offers is also the most affordable path.

You may need you to put their books together on a monthly basis, because the client requests that of you.  The more our clients need of our time the more we get to charge.  Definitely do not miss out on this opportunity to learn everything there is to know about the IRS Form Schedule C. 

Learn Bookkeeping for Affordable Prices

How frequently you prepare statements will be based on the needs of your clients.  You will be able to charge by the hour or by the job for bookkeeping services.  Or you may do a little of both, depending on what is stated in your engagement letter to your clients. If adding bookkeeping services to your practice is for you, then I recommend seeking direction from the American Institute of Professional Bookkeepers. 

They offer a variety of self-study courses and a certification program.  You can find them on the web at www.aipb.org.  Even if you do not want to personally learn how to do bookkeeping work, you could partner-up with an experienced self-employed bookkeeper.  Each of you would be in a position to give each other work for agreed upon compensation. Even if you do not want to learn bookkeeping skills, you can still utilize the AIPB to find skilled bookkeepers to build working relationships with.

Preparing tax returns for the self-employed can be very complex.  Complex tax returns earn much higher fees because of the extra training and experience required.  If you are preparing the client’s books and then also preparing a Schedule C, you will be earning a healthy fee for that tax year.

I highly recommend taking the Schedule C Mastery course from Pronto Income Tax School.  Another option would be to attend an institution of higher education to earn a bookkeeping certificate from a junior college or study accounting at a university. 

But how long will that take?  And how much will that cost?  And will the teacher be an actively working tax pro who actually works with real clients every day, or a professor who used to work with real clients, but might not know what’s really happening in today’s real life tax industry?

Just some food for thought as you evaluate your education and training options!

We want to help you prosper! 

Here’s the link to the Pronto Tax School course Schedule C Mastery in case this is helpful to you.

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