How to start a Tax Business and make 6-Figures Your First Year  2019-2020

How to start a Tax Business and make 6-Figures Your First Year 2019-2020

hey guys my name is Krista Titus I'm an enrolled agent and in today's video I want to show you how to start your very own tax preparation business so there are few steps that you need to take before you can be confident you know to take on clients and prepare their taxes accurately so the very first step that you want to do is study tax law um a lot of people think that because taxes can be such a plug-and-play you know TurboTax makes it fairly easy for you to plug that information in when your professional tax preparer you don't use TurboTax so you're not you don't have a system kind of walking you through the steps and making sure that you're claiming the right deductions and credits for your client so you really need to know this yourself and it's you know you're in a professional service based industry you need to know the skill you need to have the skill set in order to serve your clients at the highest level so the very first thing that I'm gonna recommend you do is study tax law and I don't think that this is going to be too daunting or that it's going to be prohibitive for you but there are two ways that you can go about it if you're just wanting to be a regular tax preparer I'm gonna link the book below that that you can use and if you want to become an enrolled agent I'm going to link that book below as well that you can use to study tax law and become familiar with individual tax law your business tax law and representation now the next thing that I'm going to tell you to do is to kind of select the niche because a lot of people in the tax industry who are new to it think that they can just come into the industry and that they're going to get all of these clients that they're that they're gonna do a lot of guerilla marketing they're gonna do flyers and mailers and have people stand outside you know waving a flag down but honestly the competition is really steep now it's so many more tax preparers in the industry accountancy you know I haven't heard that the local car dealership was preparing taxes so you need to really have something to differentiate yourself from the competition and the only way to do that is to really hone in on the niche so step number two is to really start focusing going what nice you're going to specialize in okay now what am what do I mean by niche so you can focus on let's say it real estate investors that's a niche okay you can focus on people with rental property you can focus on high net worth so people have like stocks and bonds okay these are just a few examples of some Nisha's because just the tax law around real estate is very cumbersome so if you know the tax law and now you know how to do a tax planning session for a real estate investor you know the different deductions and credits and you know little loopholes that are available for these folks you're gonna be able to position yourself and you're gonna be able to command not only a higher price for your services but also when you go through your marketing you're much highly targeted so if I'm a tax preparer and I'm marketing my services and I'm like hey come to me I do taxes you're going to get maybe one in a thousand that's probably gonna come to you because they just need their taxes done right but if you position yourself as an expert and you're saying I'm the best at real estate investors hey come to me to get you know your your your free tax planning for your real estate portfolio you the your target audience who knows exactly who you're targeting they like oh she's targeting me or he's targeting me they are an expert in my situation right so you want to find you want to go through the tax law and you want to see like what are you excited about like what get you going what do you feel that you could be of service and of value and another way that she can do this is also just look at your background you know like what do you already know about what do you already know what are you more likely to gravitate towards okay I just want you to hear that you have to have a nice you have to have a specialization you have to be the go-to expert because if you just think that you're going to just open up your tax office and put up your side and you know be on a busy street and people are just going to be walking in and droves you're sadly mistaken my friend and I don't want to set you up for failure trying to set you up for success so go ahead and focus on the things that you already enjoy you know do you enjoy working with you know manufacturing people or do you enjoy working with other professional service based owners such as doctors and lawyers you know when you know what their financial situation entails you're able to help them right so take this step very seriously is really honing in and figuring out what niche you're going to become to expert in it okay and again I'm going to link these books below that you're going to be able to study text law and kind of get a feel of you know you know just the lay of the land of the law okay now number three it's going to be I have written here office okay so there are few options so you can do the traditional way which would be like 652 like $1,300 a month or you can work from home or my favorite now it's a court base which is like alright so let's talk about this because this was one of the things that I struggle with when I first got into my tax business I'm like you know I really want people to know that I'm professional so I thought that had to get a traditional office space and I was spending 600 to 650 to like 900 dollars per month that's a whole nother household for me because my rent at that time was $9 per month so I was literally taking care of two households I mean I had to rinse to utilities and so what I want I'm gonna save you a lot of heartache and pain if you don't already have a build up clientele you don't need to go the traditional route you don't need to open up you know a storefront a brick-and-mortar unless you have the capital to actually make it work for yourself but if you're starting this business on a shoestring budget you don't have to go this route and you're gonna be why because you can't work from home now the disadvantages from working from home is that you it is a less it's less professional I'm gonna go ahead and say it's just less professional okay did you go to your doctor song do you go to your lawyer song so no so the reason why if you are working virtually if you are having people sending your text documents you know fax email scan if you have a portal system this is great torque from home but inviting clients unless you live in a really nice house and you have a dedicated office you know it's you know it just doesn't look that professional like if you're on your kitchen table don't do it but if you have a nice home in a nice area and you have a nice office set up by all means you may want to go that route now my favorite alternative to this and this is great its co-working spaces co-working spaces have been blowing up dramatically over the past couple years they've been popping up all over the place and this is great because you pay around 150 dollars to 300 bucks a month so be able to co work in an area with other entrepreneurs and it's great because you have your own dedicated desk it's a professional image you have a dedicated secretary or administrative assistant you have dedicated conference areas it's so professional for a fraction of a traditional office space and it's more professional than just working out of your home ok so if you have a co-working space in your area I would definitely go with that I would look at a few in and around your city and price them out and see which one is the best and more suitable for you okay now the next one we're going to talk about is credentials space so next you want to focus on number four is credentials okay and what do I mean by prudential obviously with tax law and taxes and you're dealing with a government entity there are requirements that you must meet before you can accurately and professionally prepare taxes so the very first one that you need is called a p10 this is a preparer tax identification number okay and this is $50 and you I'll put the link for you to go to the website where you can get your pizza and it's going to ask you for your personal information so make sure you have all of that handy I think it asks for your tax information as well so make sure you have that handy as well now the next thing that you're going to need is what's called an even this is your electronic filing identification number this is so you can e-file tax returns and do not do this at the last minute because it can take up to 60 to 90 days to process so your ef'n is what you're going to be using to electronically send taxes to the IRS without this even number you can't electronically file which was suck for your clients and for you and so for this it doesn't cost anything but you have to go through what's called a suitability check okay which is why I say don't wait to do this at the last minute because you have to make sure that all your taxes are filed you can't older IRS any money and you have to get fingerprinted with your local police station on the fingerprint card and you're going to mail that in to the IRS with your application and then that can take about 60 days to process once they see that you are a suitable candidate to electronically file of course you can have a you know like any misdemeanors or felonies on your record so once they see that you are suitable to file you're going to go ahead and get your offense in to you in the mail okay now these two things you absolutely need your pizza in your offense the other thing is that I would definitely important you to do it's going from your oral agent status go for your control agent license and I'm in a row agent here's why because people always asking well is it worth they do I have to do it you know you don't have to do it to start your sex business but should you be working towards this during your tax career this is going to be your career your profession absolutely okay and the reason why is because the the level of knowledge that you're going to have is going to set you apart automatically from the competition you're going to be more knowledgeable you're going to be more credentials this means that you can represent any tax payer before the Internal Revenue Service over the entire country so you're not limited to just work with people in your area you can get clients from all over the country now this doesn't mean you have to fly there to them no it means that you can represent them you can you know call the IRS on their behalf you can do more in-depth tax work such as offers and compromises tax liens tax levies garnishments you know there are over almost nine million people that have back taxes that have tax issues so this is a segment of the market if you're knowledgeable in your credential that you can tap into and it can increase your income exponents expo in chile if you have this license so I would say definitely go over your own agent license is a worthy go to go towards okay and the test to take it it's one hundred and five dollars per exam so it's going to be 315 total okay and then I think it's like 70 bucks to register and then a course for I'm going to say anywhere between 200 and 500 dollars total okay and that's including your study cuz you need to study for it right now let's be clear here for five hundred dollars to go after your enrolled agent license exam I've made hundreds hundreds and hundreds and hundreds of thousands of dollars simply by being in a row agent because I had a higher level of expertise and I was able to take on better clients and better paying clients and actually provide better service so I'm not saying you have to have it but it is a worthy ideal to go after if you do and I have a great community for aspiring intro agents and currently Road agents I'll put the link below so you can check that out as well now here's the credentials next what else do you need ok you need ok let's talk about that because there are so many options or software ok now I'm just gonna run down what I did in chronological order this is not by importance and you're going to see why in a minute when I first got into the industry I went with Intuit tax online ok and this is kind of like a pay-as-you-go system and intuitive the largest provider they're the ones that own QuickBooks and turtles hags so Intuit X online it was cloud-based I can be on my laptop anywhere I went I had my software I can access my software right but the pay-as-you-go model was way more expensive think you just buying your tax software outright so I stopped this and then I way to Pro Series which is also buy into it and at that time Pro Series was eighteen hundred dollars okay that's pretty steep if you're making thirty grand preparing taxes it's the cost of doing business this is the cost of doing business you're gonna have to pay for software but eighteen dollars pretty seat but I paid it and then I started talking to other tax professionals in the industry learning what they were using and then I switched over to cross-links and Crossley I pay about ten ninety four and this is awesome I've been using cross things for the past three years they have great support system it's very user friendly and easy to you so I will recommend cross links and just so you can have some other options drink is a very popular one amongst accountants and I think Drake you know is around $1000 plus range just somewhere between these two okay so drink is another good one but I would definitely recommend cross links and I'll put the link below so you can check that out as well and then a I'd like to do a payment plan so you can put like three hundred dollars down and then you can pay the rest by late February and we February you should have at least a couple dollars in your account from preparing taxes so it allow you to put some money down on the software so you can start preparing taxes and then allow you to pay the rest next year February ok so last thing that you know you know tax law you pick the niche you have the credentials you have your tax software of course you need your supplies I'm not gonna put that up there because that's like you know you need some tax folders a stapler you know simple stuff you I'm sure it here a tax professional you're going to this business you can figure that out it's really simple you just need something to put the taxes in okay and some pins the last thing they were going to talk about is marking because this is the huge thing that's gonna make you or break you if you do not know how to market your business I don't care what you're into you know you are gonna go broke you're not gonna make any money you're going to struggle and you're it's just gonna be bad for you so let's talk about marking now there is the right way versus the wrong way in marketing so let's talk about what not to do okay so you're not going to call it flyers you're not gonna do that you're not gonna get 10,000 Flyers put it up and saturate your area it's not gonna happen because you're not gonna need to because you're not trying to get everybody as a client you're trying to you you are focusing on a niche and it's more highly leveraged to focus on a niche than to just print out some generic looking flyer about taxes and to litter your neighborhood you're gonna piss people off when they get all of those fires on their car or when their door because guess what they're not gonna come to you anyway because they don't know you and you're the tenth text company that hasn't done that to them that season so don't do it you're not gonna litter flyers do not do it okay what else you're not gonna do you're not gonna do any radio okay you're not going to do any billboards and guys that did all of this you're not going to do any TV commercials okay you're not gonna have a hey wavy ok cuz you don't want everybody so you don't have to stand on side shaking a flier shaking you no no you don't have to do all that this is this is what you're not gonna do you're not gonna spam okay you're not gonna do that you know you're not getting everybody you're not going after everybody okay now let's talk about the right way to do marketing now when we have Aneesh let's just say I am going out there real estate investors okay so here's my nice first off where are my people where's my money my money is real estate investors so are my people at I gotta find my people so the right way to find real estate investors is there are our e investment groups now if you go to Facebook right now and type in real estate investment group you're going to get a shitload of real estate investment groups to pop up and guess what there's your people tens of thousands of them if you're charging each real estate investor fifteen hundred dollars for taxes how many do you need to get to hit your income goal now I don't know your income go so let's just say you want to make fifty thousand dollars in four months okay this is your goal how many people do I need to get to make this fifty thousand dollars okay so I'm gonna say guys help me out here – what's what's 50 thousand divided by fifteen hundred heavier calculated real quick alright guys because for the sake of math because I can't bear if I got this answer on it I can't do it in my head so we're gonna do this the right way and we're gonna do it on a calculator okay so fifty thousand dollars fifteen hundred that's 33 clients okay I study through class thanks honey alright now 33 clients this person is trying to get 200 people and 250 as hell it was a beat we're looking for 33 clients we're going to make $50,000 so guess what I'm turning a real estate investors I type into Facebook real estate investment groups I have access now to tens of thousands of real estate investors at my fingertips right I'm looking for 33 of them 33 of them to provide value to so once I know okay now I'm thinking well what do they need what are their struggles with you know but what exactly can I be a benefit for them okay so once I go to the real estate investing groups on Facebook I'm going to request access okay I'm going to type into the search bar Texas and I'm gonna see what type of questions that they're asking about taxes now we're not going to spam the group okay this is just for Intel you know we're spying you know we're trying to see whether people want what they need I'm going to type into the search bar after I'm a member of this group Texas or you can type in a county or you can type in tax play with the search terms it's kind of people in that group have posted their questions about taxes now once you figure out what are the members asking about when it comes to taxes and real estate investing now you can create what's called a lead magnet okay so let's just say everybody is asking about depreciation okay in taxes you can create a white paper a PDF that says the top three ways to reduce your tax liability with depreciation okay now out of 10,000 people that we can advertise this to we are only looking for 33 to say hey I want you to do my taxes cuz you know what you're talking about okay this right here is proving your expertise people have to build up what's caught klt know light and trust with you okay if they do not know or like or trust you they are not going to pay you any so you give them something of value so you build up that no I can trust and then you can start cultivating that relationship you're only looking for 33 people to raise their hand and say yes okay 33 people to say you know what you know what you're talking about you know what you're doing I like what you're doing I I'm confident that you are the person that's gonna be able to save me money and make me money okay and so you create that lead magnet and you advertise this on Facebook targeting your real estate investors and how does Facebook know because these folks are already in the real estate investing group if Facebook knows that they know that their real estate investment group they know that these folks are interested in real estate investment so literally it's gonna take you about a couple hundred dollar ad spin on Facebook it's hardening real estate investors with this lead magnet and it's that simple now there are other nuances behind the scenes on how you're going to set this up and so what I've done I've created a facebook ads for tax professionals courses a training course teaching you how to market effectively on Facebook and actually you can use the strategies to market on Google Adwords or LinkedIn on Instagram or you know in networking organizations but I you all about marketing on how to don't do it the wrong way don't wait time guys waste your time a lot of these Flyers and dealing with all that crap this is crap okay I did that so if you're doing that don't I'm not judging you because I've done it so I'd done the crap okay this is why I can call it crap because I did it this is the right way you want to provide value you want to build up that know like and trust with your potential clients where they're like him she knows what she's talking about I trust her I know she can get me from where I'm at to where I want to go and I'm gonna pay her money that's the end of the game you want to help people so they can pay you money okay and we're only looking for well we're only looking to make $50,000 okay and this is totally doable if your very first year in the business if you know what the hell you're doing if you're not just going in trying to wing it and win because you're not you're gonna lose you're gonna make a little money but you're gonna be like oh man I still listen to Christa I should have fought what she was trying to say don't don't be that guy don't be the person that is someone who's been seven years in this business made hundreds and hundreds of thousands of dollars made a lot of mistakes spent a lot of money on some bad stuff and now I know the right way and I want to teach you that right away so go ahead and click that link below to check out that course Facebook Astro tax professionals so we can get you paid when you start your business all right guys leave your questions or comments below any other videos that you want me to do pop them below and I'll do a video on that as well talk so much

46 thoughts on “How to start a Tax Business and make 6-Figures Your First Year 2019-2020

  1. Excellent video. Quick question is your bootcamp for those who have already completed the required tax preparer courses and to assist in building their business?

  2. You should tell your viewers to like and subscribe at least at the beginning of each video. You’ve got a lot of insight. Let the YouTube algorithms work for you.

  3. Great video, I like how you explain the details each steps. Also, what do you think about TaxAct software?

  4. Hey, I'm in high school and am interested in being a tax preparer and then opening my business independently.what route do I need to take first? Is college the answer? Do I need to have an accountant degree? Or can I just study tax law and fill the requirements to be a tax preparer and start as an employee?

  5. I really enjoy your great advice Crysta! I would like you be my mentor on my tax preparation business!

  6. Are there any free to cheap online classes to learn tax preparation? Should I "go to school" or just read JK Lasser's book? Will that teach me about specific nichès like Real Estate Investment depreciations or is that a specialty that someone will have to teach me? *I should add, the only thing I know about taxes is doing my own, filling in the blanks according to the IRS instruction book for form 1040ez with my W2*

  7. Super informatitive! I've been in the tax field for over 10 years (4years HR Block Tax Specialist, 4 years as an IRS Tax Examiner, and about 3 years doing taxes from home) since my Block days I've wanted to start my own official tax business, however, life has thrown me in other directions, so I've pushed my dream aside on several occasions. Now I'm an auditor with the US Govt, put I still dream of one day opening up my own tax business. Your video motivated me to pursue this dream again. Thank you!

  8. @Crysta Tyus How can I contact you directly, I need advice? Aspiring Entrepreneur attempting to open my own Tax Preparation business with my bestfriend. Thank you!

  9. Is it just me or does anyone else have a difficult time hearing her sometimes? I have all volumes at 100% and she gets quiet sometimes. Love the content but can't hear it all

  10. Part 1 of the EA done…..I'm on my way!!! Testing starts back up in MAY i will be ready!!! Thank you for the great info. I have subscribed!

  11. Very helpful video. Do I need to have a legal name for my business if I want to get an efin first, and where do I register my business, I'll appreciate your answer!

  12. Hello, great video! I just tried to schedule a consultation with you but no time slots are available. Are you still doing strategy sessions?

  13. great vid, one thing I would recommend against though is setting an income goal. The goal should be to serve as many clients as you can handle, and then hire and train to scale. In any business, never reverse engineer your pricing or goals to the amount of money you need to make. Always charge what the market dictates, and always maximize time and resources, with that maybe 50k is done in a month instead of 4.

  14. Thanks for your videos, they’re great. I had two questions. First, I’m a CPA but have never worked in the tax industry. Do you recommend still going for my EA? I’m not super confident in my tax skills yet. Second, would you recommend operating as a sole proprietor or setting up a business like an LLC? Do you worry about liability? Thanks again.

  15. Hi, starting out, I'm preparing taxes with a church for low income families to get my feet wet. It's free, so software isn't an option right now. The pdf for the 1040 forms are available on irs website and any tips on doing it manually like that?

  16. Honestly, some good stuff: I am investing in a tax service this year, and do to my current profession I was like how hard would it be to get a lot of people that's what I do lol, I think I'm going to rely on the professional experience of the agents I recruited,,

  17. Thank you so much for this video! I am also a Licensed Health Agent. I was speaking with a client who had her own tax company for years and she told me to become an enrolled agent. After that and hearing what you said there's no way I'm not going to be an enrolled Agent by this time next year. You answered every question I have been struggling with and confirmed so much for me. Sorry for the book but your video is super awesome! Thanks again

  18. Hi Crysta, I am amazed at how good your information is. Would you happen to do a video on tax preparation back office services?

  19. what classes do I need to take in order for me to become a tax preparer? Do i have to get an associate or bachelor's degree? Thank you.

  20. You are a wealth of knowledge!! Was considering closing my little tax service…but you have helped so much! Thank u😁

  21. Thanks so much for this valuable information! I am tax preparer and this is the first time I heard any one give such valuable practical advice! Again thank you! ❤

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