Opening a Tax Prep Office: 4 Steps to Success

A group opening their own tax office with TaxSlayer Pro software

Whether you’ve been working as a preparer for years or just starting in the industry, opening your own office could mean big things for your business. Here are four pointers for setting up your new space and building a tax prep office that turns a profit.

1. Register your business

If you’re an established tax preparer, you’ve probably already taken care of this step. However, if you’re new to tax preparation, opening a tax office will involve structuring your business and gaining the necessary credentials with the IRS. The most basic steps for starting a tax business include:

  • obtaining an EFIN (Electronic Filing Identification Number),
  • applying for a PTIN (Preparer Tax Identification Number),
  • and registering your business with your state

2. Choose an office space

There are several factors to consider when you choose an office for your tax prep business.

  • Size: The size of your office will largely depend on how many employees you plan to have. If you’re opening a whole office with multiple employees, you may need an entire suite, while a single-room office could work if you are the only preparer.

  • Location: In addition to considering the proximity to your home, you’ll also want to consider the types of clients you’ll serve. If they tend to live or do business in a particular area of town, choosing a space that’s farther from you but closer to them may make sense. 

  • Cost: The cost of an office space can be a tough pill to swallow if you’ve been running your business from home. While paying for an office does eat into your profits, an office can help you expand your business and make more money in the long run.  As you determine your budget, project how much additional revenue you’ll earn in the next several months or years if you have an office space. You may be able to serve and attract more clients or even hire additional employees. If your projected revenue outweighs the cost of rent, opening an office likely makes sense for you. 

  • Coworking: If traditional office space isn’t within your budget, don’t immediately discount the idea of opening a tax office. Coworking or shared spaces offer a unique office solution that works well for some tax preparers. Membership fees for a coworking space are often far less than rent payments for a traditional office. You’ll usually have access to communal workspaces on the least expensive plans. When you need to take a client meeting, most coworking spaces offer conference rooms that you can reserve as part of your membership or for an additional fee. 

3. Set up technology & software

Computers, tax preparation software, and fast, reliable internet are essential for every tax office.

As you choose your tax preparation software, consider how you prefer to work and which tax forms you’ll need to serve your clients. If you think you’ll still work from home occasionally, cloud-based software will allow you to work from multiple devices. 

In order to save and share data more easily, some larger tax offices set up a network server. If your office has more than one computer working on taxes, the desktop version of TaxSlayer Pro can be easily configured for multiple users.

While tax preparation software is the most important software you’ll use at your tax office, it’s not the only one you need. You’ll need a few more products, like firewalls and PDF readers, to help you work efficiently. Our Tax Office Checklist will help you make sure you have everything you need to get your new office ready for tax season.

4. Start marketing your business

Do you know where your next client is coming from? Acquiring new customers will be essential to the success of your new office, so it’s important to invest some time (and money) into marketing and promotion efforts. Here are some ideas to get you started:

  • Build a website (or add your address to an existing website)
  • Create social media profiles for your firm
  • Ask your existing clients to spread the word

You can also expand your marketing efforts by identifying your target audience and leveraging different avenues of customer engagement.

Are you ready to start hiring employees? We’ve got tips on how to hire employees you may want to consider before you begin your search.

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