When people say that the tax industry is lucrative, what exactly do they mean? Are they referring to a 6-figure salary? The truth is that how much money a tax preparer will make is contingent on how many clients he takes. However, the real deal is that a tax preparer will provide a faster and larger financial return for the same amount of time, money, and effort as almost any other profession.
What makes tax preparation very lucrative is the income potential it has and the minimal investment it requires. You have the freedom to set the workload you want without compromising on your other priorities. The potential tax preparation business has is huge and how much you attain from it entirely depends on you.
A freelance tax expert with experience and skills can make up to $100 per hour. If we estimate a 50-hour week, that adds up to $5,000 a week, or $60,000 for just the three-month tax season!
The quantity of money you can make is determined by your core demographic and the ease of acquiring customers. Because you’ll be studying and acquiring new clients throughout your first tax season, you won’t probably make a lot.
However, by branding efficiently and delivering outstanding client care, you may easily achieve that amount of income after only three months of effort. What’s even better is that as your tax business expands via new clients and recommendations, your projected revenue potential increases dramatically!
Costs and Investment
Tax preparation enterprises may be established rapidly and with little capital. You don’t need a large office or a complex IT system. Truth be told, you may start your own company with just a computer, some professional tax software, and a few filings.
You don’t need a college diploma, strong arithmetic skills, or CPA training to create a tax firm. All you require is a little information, little direction, and some professional tax software to get started. This is just another reason why this company is so appealing.
You can purchase into tax franchises, but starting your own firm is preferable due to franchise fees, massive overhead, and the upfront funding needed otherwise. You also get to keep all or most of your earnings as a tax preparation entrepreneur.
Peak Tax-Filing Seasons
Like most businesses, tax preparation also has peak seasons. The first “Peak Filing Season” starts the second week of January and lasts until the last week of February, when taxpayers who are due a refund submit their forms.
The second “Peak Filing Season” starts in late March (typically the last week) and lasts until April 15th, when taxpayers with complex tax returns and those who owe money to the government submit their returns. These are the two busiest times of year for tax preparation, and hence the most lucrative times for you to prepare taxes.
Additional Tax Industry Revenue Streams
You may wonder how lucrative tax preparation can be if the actual business only lasts a few months. Remember that just adding a few customers each evening during “tax season” can bring thousands to your revenue in three months. Another reason why the profession is considered rewarding is it allows the tax preparers enough flexibility to work outside of tax season and support their income by providing services other than tax preparation.
Among many other services, a taxpayer can take on the following responsibilities as an additional revenue source:
- Offer small companies tax preparation services. Businesses, unlike individual taxpayers, require tax services all year.
- Do payroll management. Many small business owners want to outsource payroll.
- Offer bookkeeping for small companies.
- Become a financial planner. Individual taxpayers frequently require financial planning services.
Flexibility and Ease
Tax preparation is also considered lucrative because it provides you with the freedom to create a work-life balance in addition to earning a decent income. Depending on where you draw the necessary income line and hours you want to commit to work, the money does not come at the expense of an intense workload.
Because most of your revenue is created during the focused filing season from January to April, you can spend your summers and holidays taking a break. Alternatively, you may provide other services to your tax customers and earn money all year! The decision is yours, and this itself is a great luxury that the profession offers.
Many preparers begin by working from home until their tax industry firm expands to the point where they can afford to rent office space. You will charge less than your competitors with low overhead expenses, which acts as a considerable advantage, especially in the initial few months.
Ready to get into the Tax Game? I’m giving you everything you need to know. This is a billion dollar industry with more than enough room for up and comers, you just need to know what to do and most importantly what NOT TO DO.
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