If you’re wondering how to become a tax preparer from home, you’re not alone. Whether you’re looking to become a virtual tax preparer or transition from an office role to working as a remote tax professional, this guide will walk you through the essentials.
We’ll cover the logistics of becoming an at-home tax preparer, including licensing, registering your business, and meeting education or credential requirements. You’ll also learn how to adapt to working from home effectively and how to attract clients as a work-from-home tax preparer.
How to become a tax preparer from home
Tax preparers join the industry for a host of reasons. Some of the key reasons include:
- low barrier to entry
- high income potential
- flexible working hours
- seasonality (working 4-6 months per year)
- pride of owning one’s own business
Whatever your reasons for pursuing professional tax preparation are, the first steps of becoming a tax preparer– getting licensed, registering your business, and pursuing education– can all be done easily from home.
Apply for licenses
First, you’ll need to apply for a Preparer Tax Identification Number (PTIN) and Electronic Filing Identification Number (EFIN) with the Internal Revenue Service (IRS) The IRS is the U.S. agency responsible for administering and enforcing federal tax laws. A PTIN is the identification number required for paid tax preparers, and an EFIN is the number the IRS assigns to tax professionals authorized to e-file tax returns.
Most of the application processes can be completed from the IRS website. However, to get your EFIN, you will need the IRS fingerprinting requirement for your EFIN completed in person by a trained professional.
Register your business
A few states have specific requirements for tax preparers, and most others require you to register your small business. Start by choosing a business entity type like sole proprietorship, LLC, or corporation, based on your goals and liability preferences.
You’ll also need to apply for an Employer Identification Number (EIN), which is a unique federal tax ID the IRS uses to identify your business for tax purposes. Once you have your EFIN,open a dedicated business bank account to manage your finances professionally and keep personal and business expenses separate. Learn your state’s requirements, and start the registration process online.
Gain credentials and education
Beyond the PTIN and EFIN, the Internal Revenue Service doesn’t require tax preparers to hold any additional credentials or formal education. However, investing in continuing education can strengthen your expertise, set you apart from competitors, and support long-term businessgrowth.
You can get started immediately with online tax education opportunities and the IRS’s Nationwide Tax Forums Online (NTFO), a digital learning platform offering self-paced courses, webinars, and training sessions created by IRS experts. learnnin To learn more about credentials and education opportunities, take a look at our post on Continuing Education Requirements for Tax Preparers.
Working remote as a tax professional
Making the shift to working from home as a tax professional offers many benefits like a more flexible schedule and increased productivity or a healthier work-life balance. But before you make the switch, it’s important to lay the groundwork for a successful transition. Here’s what you’ll want to keep in mind as you set up your new business from home.
Choose a WFH-friendly tax software
Now more than ever, it’s important to choose a tax software that supports remote work. Both cloud-based and desktop tax software solutions can be effective, it just depends on your workflow and preferences. Cloud-based software allows you to prepare returns online from any location with an internet connection, making it ideal for flexible or mobile work setups.
Enable digital client interactions
Your first priority will be creating a business email and phone number. As your practice grows, you’ll eventually want to invest in a professional website and a separate phone line. When you’re just starting out, however, Gmail and GoogleVoice are secure, free options that will help you get up and running quickly.
Other tax prep tools like the TaxesToGo™ Mobile app will allow clients to easily and securely share their tax documents and avoid in-person meetings. The app’s notifications and chat features streamline communication, saving time for both of you.
Follow WFH best practices
To run a successful tax business from home, it’s important to build habits and core skills needed to succeed as a tax preparer. Start by setting a consistent schedule to stay disciplined and clearly define your availability for clients. Create a dedicated workspace that minimizes distractions and helps you mentally separate work from your personal life. Even dressing for work is enough to help you prepare for client interactions.
Most importantly, adopt strong data security practices like using secure WIFI, encrypted storage, strong passwords, and consider a VPN to protect sensitive client information.
Finding your first virtual tax clients
Once your remote tax business is set up, the next step is attracting clients. Even without in-person networking, a strong digital marketing strategy can help you build visibility and credibility. Specializing in a niche market and building an online presence are two accessible ways to start attracting clients.
Define your niche
Developing your niche helps you stand out in a crowded market. Whether you specialize in small business taxes, freelancers, or a specific industry, defining your ideal client allows you to tailor your messaging and services. This focus makes your marketing more effective and helps potential clients quickly understand how you can meet their needs.
Build an online presence through marketing
Local search engine optimization (SEO) allows you to show up when people search for tax help in your area. Building a professional website gives your business credibility and acts as a central hub for information and contact. A strong social media presence helps you connect with your audience and showcase your expertise. Building on these opportunities for online visibility will help to establish trust an attract clients
Becoming a tax preparer and starting your home-based tax preparation business while working remotely is easier than ever before. Whether you’re new to tax prep or ready to grow, we’ve got you covered with free step-by-step guides and demo of our cloud-based professional tax software.
Try TaxSlayer Pro for free and see how easy it is to get started!
