What will I be doing?

There are more than 75,000 full-time income tax preparation services in the U.S. What does an income tax preparation service do? It gathers and prepares income tax information and advises clients on how to legally pay the least taxes. All tax services handle federal income taxes and, if required, state income taxes. They help businesses calculate quarterly estimated tax payments. They make recommendations on reducing tax obligations.

What will I need to start?

Most people who start an income tax preparation business have degrees in accounting and some work experience in the area of tax preparation. To advise and prepare tax returns, you must understand the IRS tax codes and take classes and read appropriate publications to continually update your knowledge. There are community college and adult education classes on income tax preparation available in most areas. Correspondence courses are also available. Because the code is so complex, most tax preparers develop their expertise in one or two areas of it. Some help individuals prepare the annual Form 1040. Others specialize in helping small businesses with the Schedule C part of the 1040. Others work with investors who have tax preparation questions.

An important factor to take into consideration is that, to a great extent, this is seasonal work. Even though many tax documents need to be prepared quarterly and monthly, the tax preparer's high season is from January 1st to April 15th.

Who will my customers be?

Your customers will be individuals, small businesses and organizations such as nonprofits and trade associations. You'll find them by advertising your services and making it easy for them to find you. Most individuals start thinking about taxes in February when the last of their W2s arrive in the mail. Small businesses think of taxes most in December and January, but also have to think about them quarterly. Large businesses think about them every day.