Are you ready to start your tax practice? It’s not as simple as hanging an open sign in your office window. In this article we offer you tips to walk you through forming your business, building your practice and growing it with marketing strategies.

Business formation

First things first, let’s get your business started with the proper paperwork, credentials, and licenses.


There are a lot of different options for someone who wants to pursue a career in tax. You may have already decided what route you’re planning to take, but if not, it’s helpful to review the different options available.

  • Enrolled Agent (EA): Before becoming an EA, an applicant must pass a three-part enrollment application and a suitability check. An EA is licensed by the IRS and is required to complete 72 hours of continuing education every three years.
  • Certified Public Accountant (CPA): Licensed byy, CPA applicants must study accounting at a college or university and pass the CPA examination. Continuing education is required.
  • Tax Attorney: Generally, tax attorneys must have earned a law degree and passed a state bar exam. They are also required to complete continuing education.

You don’t need a specific credential to prepare (though you do need to register with the IRS), but if you want to have unlimited representation rights, you will need to be an EA, a

Preparers without one of the three credentials above have limited representation rights and can only represent clients for whom they prepared a return. They also can’t represent anyone with collection issues or appeals.

Note that some states have separate credentialing requirements tax practitioners must obtain before filing state tax returns. For example, Connecticut requires tax preparers to obtain a permit.

If you choose not to obtain a credential to prepare taxes, the IRS has another option that may be appealing. They created the Annual Filing Season Program to recognize non-credentialed preparers who pass a test and meet continuing education requirements. This is not a certificate, but once you complete the requirements you will receive a record of completion from the IRS. You can learn more about the Annual Filing Season Program on the IRS website.

Register your business

Before officially starting your business, you’ll need to register it with your state. The process will depend on your business formation structure and whether you’ve decided to register as a sole-proprietorship, an LLC, a partnership, an S Corporation, or a C Corporation.

Check with your state to understand the specific state process and requirements. The Secretary of State website generally publishes the information that you need to begin the registering your business.

You won’t need to register your business with the federal government, but you may need to obtain a Federal Employer Identification Number (EIN) from the IRS. You can apply online with the IRS.

Obtain your PTIN

The IRS requires anyone who prepares tax returns for compensation to obtain their own Preparer Tax Identification Number (PTIN). This is a number that the IRS issues to paid tax return preparers. The PTIN isn’t a certification and doesn’t require that you take a course or pass a test.

The IRS published a checklist to help you gather the information you need for the application.

Some states also require that you file for a license or permit before filing taxes in that state. Though it’s called a license, it’s very similar to a PTIN.

Obtain your EFIN

If you plan on filing more than 10 tax returns in a year, you’ll need to file the tax returns online. To do so, you need to apply to become an authorized e-file provider. There is no fee or exam required, but you will need to pass a tax suitability and compliance check.

Once you’re accepted, the IRS will issue you an Electronic Filing Identification Number. You can apply to .

Most states don’t require additional registration to become an e-file provider. For example, you’ll be automatically enrolled in California’s e-file program two weeks after you’ve received your EFIN. Check with your state for their specific requirements and process.

Build your practice

Once you have the legal and regulatory requirements out of the way, you’ll need to do some work to build your practice.

Identify clients

You know that you want to work providing tax services, but have you considered who exactly you want to work with? Before you begin creating or pricing your services, it’s important to know the clients you’ll serve.

Do you want to work only with individuals? Would you prefer to focus on small businesses? Or, do you want to build a business that works with people within a certain industry (for example, farming)?

Identifying who you want to work with early on can help set up your business offerings correctly and will make developing marketing plans much easier.

Decide on the business model

When building a tax practice, there are a lot of options for how you’d like your business to operate. Are you planning to only offer tax return preparation

If you’re not sure exactly what business model you’d like to create, start by asking some ideal clients what their needs are. Do they prefer to work with their tax preparer just once a year or do they need additional assistance year-round? You might also consider doing a little competitive analysis to determine what other businesses in your area offer.

Price your services

Pricing can be a tricky job, but it’s important to spend time getting it right before you open your business doors. First, consider what your costs are. Will you have an office space or work with clients virtually? What software will you need to do your work and how much will it cost?

If you’re not sure about software prices, we have a price estimator that can help you figure out how much using TaxAct Professional will cost.

Set up your software

There are a lot of software decisions you’ll need to make, to get your practice up and running. To help identify what you’ll need, think through the client process and you’ll need to deliver a fantastic client experience. This may include:

  • Meeting scheduling tools: If you want your clients to be able to easily book appointments with you, consider a meeting scheduling tool that you can add to your website.
  • Video conferencing software: If you plan to meet with clients from all over the country, an easy to use video conferencing software is a must.
  • Email software: When you need to email all of your clients at once, and email marketing service can help you get the job done easily. Look for options that are easy to use and come at a good price-point.
  • Electronic document signing: Most clients don’t have access to their own electronic signature tools. If you need anything signed electronically (for example, a contract) sending it through an electronic signature tool can make it easier for them.
  • Tax preparation software: You’ll need software to help you prepare and file returns, and picking the right software is important. TaxAct Professional software not only offers powerful software that can be tailored to meet the needs of firms of all sizes, but is also cost-effective — a

Market your practice

Getting clients isn’t as easy as opening your doors and telling the world you’re in business. If you want to build a sustainable and profitable practice, you’ll need to spend time developing your marketing plan. Consistent effort here will pay off for years to come.

Create a website

It’s hard to have a business these days that doesn’t have a website. If you’re not technically savvy, don’t let that deter you. Building a website or having one created for you has never been easier.

You don’t need to start with a fancy website. Focus on including the most important information: details about you, your business model, and how potential clients can contact you. Don’t shy away from putting your picture on your website. People want to know that they can trust who they’re working with, and having a photo of yourself on your website can help to establish that trust.

Focus on networking

Your business will likely rely heavily on networking. Strategically networking with people in your community can help create a pipeline of referrals for your business. Look for local professional associations and consider joining national organizations, like that National Association of Tax Professionals.

You might also work on networking with professionals in related occupations, like lawyers and insurance agents. They may be looking for someone to refer clients to for tax assistance.

Another less conventional route for networking can be through public speaking. Look for educational events that could benefit from a presentation on taxes. For example, if you’re primarily building a practice with small business owners as clients, look for speaking opportunities at conferences or workshops business owners attend. You won’t use the presentation to pitch your services, but you’ll provide education that attendees want to learn. From there, attendees might reach out to you for your professional services in the future.

Create content marketing

You have a lot of knowledge about taxes and there are people who would like to know more about them. Content marketing is a way to share your knowledge with potential clients. Rather than focusing your marketing efforts on sales copy, brochures, or direct mail, content marketing takes a less direct approach.

For example, say you notice that there seems to be a lot of confusion about gift tax rules. You can create a blog post, video, social media post, or email newsletter and share tips that parents of adult children need to know about gift tax rules. This content helps demonstrate to potential clients that you’re both knowledgeable and can explain complex topics well.

Showcase testimonials

Before you pick a new dentist, do you read the online reviews? It’s likely that your clients do the same. After you work with your first few clients, consider asking them for a review. They can leave these reviews publicly, on sites like Yelp and Google. They can also give you a testimonial that you can include on your website and in other marketing materials.

Ask for referrals

A common misconception is that if your clients like your services, they’ll automatically refer you to their friends and family. That’s not always the case. Your clients may enjoy working with you and wouldn’t hesitate to refer you, but they may need a reminder.

Asking for referrals doesn’t need to be difficult or overly-complicated. Just be direct. “Do you know of any other small business owners who could use help with their taxes? If so, please feel free to refer me. I’m always looking for more wonderful clients to help.”

Continue learning

Once you’ve established a practice, it’s not time to take the foot off the pedal and cruise. It’s important to keep your education up to date for your credential requirements and for your clients.

Trade journals, like the Journal of Accountancy offer an easy way to stay up to date on news within the accounting industry. And stay up to date with the latest practice management and TaxAct Professional news on our blog.

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