Share this:

What if I told you, it’s not difficult to start a virtual tax preparation business? What if I also told you that you could make $100,000 in just three months?

In the past, the tax preparation business used to consist mainly of in-person stores that relied on getting customers through the door, year after year. Over time though, especially within the last 10 years, there have been shifts in technology, culture, economics, and consumer needs, leading tax professionals to seek out more convenient ways to attract tax-paying citizens. As a result, the U.S. has seen a significant increase in the number of registered online tax preparation businesses.

So, if you’ve been thinking about starting a career in tax preparation, you’re in the right place, friend! Because today I’m giving you a comprehensive, inside look at what you need to do to start a virtual tax preparation business.


…Before we dive in, now is a great time to register for my FREE + EXCLUSIVE online training, ‘Teach Me The Tax Game’ and learn everything you need to know to build wealth in the tax industry!


1: Form a Legal Entity for Your Virtual Tax Preparation Business


Choosing how you want to incorporate your company is the first and most important step in founding a virtual tax prep business. It should be done meticulously and structured to benefit you and your tax company’s needs.

The kind of business structure you pick determines how you pay state and federal taxes with the Internal Revenue Service (IRS).

The most frequent types of businesses that register include:

  • Limited Liability Corporations (LLC)
  • S Corporations (S Corp)
  • Corporations
  • Sole Proprietorships
  • Partnerships

For a detailed comparison of LLCs and S Corps—two of the most common business formations—read this article next: LLC vs S Corp: What Option Is Best For Entrepreneurs?


Choose A Business Name


Deciding on a name for your virtual tax preparation business needs to be unique and catchy. I suggest doing lots of research on the tax industry and your target market to come up with the ideal name for your company. Once you’ve found the perfect virtual business name, it’s recommended that you register that name. 

This can be done in four ways:

  • Trademark: Offers federal-level protection
  • Entity name: Offers state-level protection
  • File as a DBA (Doing Business As): You don’t have any protection but, in some states, it’s a legal requirement
  • Register a domain name that protects your tax company’s website


Branding and Logo Design


Designing a logo that helps your virtual tax prep business stand out among a sea of local competitors is important. And your branding is what directly reflects your business values and goals and defines what solutions you’re bringing to the online tax industry space.

If you’re someone who’s creative and thoughtful, you’ll probably have an easier time coming up with branding and marketing strategies than most. 

For those among us who lack the artistic gene, there are countless platforms available where you can hire freelance professionals to help you create a logo and branding aesthetic. A great place to start is Upwork.


2: Identify Your Target Audience


Your company’s target audience consists of the people who are most likely to buy and use your virtual tax services. In this particular situation, that consumer may belong to a specific demographic, have certain jobs, or could just be normal, everyday taxpayers.

Nailing down who your target market is will help you down the road when you’re cultivating effective marketing strategies. 


3: Digital Marketing Campaigns


Because you’re going to start a virtual tax preparation business, your online marketing strategies are even more important.

After you’ve defined your target audience and established your brand’s identity, you’ve got to start brainstorming digital marketing strategies to help build your brand recognition and attract new clients to your tax prep business.

Below are four components of your digital marketing strategy that you need to focus on.


Build A Website


Having a professional-looking website that’s easy to navigate, optimized, contains contact information, and answers tax and business-related questions couldn’t be more important for getting people through the virtual door of your online tax business.

The good news is that it doesn’t have to cost an arm and a leg to create a stunning website. There are tons of website-building platforms available to help you, the most popular being WordPress, Wix, and Weebly.


Setup Social Media Accounts


These days everything and just about everyone is on social media; this makes having multiple social media business accounts a valuable marketing tool.

Platforms like Instagram, Facebook, TikTok, X (Twitter), Snapchat, LinkedIn, YouTube, Twitch, Whatnot, and Google are wildly popular and all are fan favorites of entrepreneurs, content creators, and business owners alike.

Creating social media profiles for your virtual tax preparation business seems so basic, but it’s going to be a key element of your online marketing plan. Keep in mind that every platform is different so be sure to learn about each one and how it can help grow your tax preparation business.


Search Engine Optimization (SEO)


Optimizing your website for search engines is how customers find your virtual tax business. Short for search engine optimization, SEO is a technical process that uses analytical methods for creating website designs, managing keywords, creating content, and driving traffic to your site. As a tax preparer, it likely encompasses concepts you aren’t familiar with, so it’s best to reach out to an SEO professional on Upwork or Fiverr for some help.

Whatever you do, if you plan to start a virtual tax preparation business—don’t sleep on your website’s SEO!


Generate Strong, SEO-Friendly Content


Content is king. It’s one of the things that makes SEO so effective. It also comes in many different formats.

These include:

  • Blog articles
  • Cornerstone content
  • Main website content
  • Videos
  • Social media posts
  • Infographics and images
  • Email marketing campaigns
  • Podcasts and audio
  • Press releases
  • Case studies
  • Testimonials

Using SEO techniques can help you identify what keywords or phrases are trending so you can have insights into what you need to target in your website copy. A good rule to remember when producing tax-related content is to effectively maintain your online presence and give something of value to consumers at no cost to them. Letting clients know you’re down to help them with no strings attached is also a great way to build consumer trust.


4: Qualifications Every Tax Preparer Should Have


There are certain qualifications and skills that every tax preparer should have. One of those is an IRS Preparer Tax Identification Number (PTIN); something that authorizes tax professionals to legally prepare taxes for others.

The good news is that you don’t need to be an accountant or have a four-year degree to start a virtual tax preparation business.  In fact, most states don’t require any additional certifications other than PTINs and EFINs—the ones that do are New York, California, Maryland, Connecticut, Illinois, Oregon, and Nevada.


Obtain a PTIN


As I mentioned above, anyone who is making money preparing and filing federal tax returns is required to obtain a PTIN. Any employees working for you must also have a PTIN. The only professionals who don’t need one are Certified Public Accountants (CPAs) and lawyers unless they’re being paid to prepare returns.

Lastly, you cannot share your PTIN with your employees or your singular office. Each preparer must get their own.


How To Get A PTIN


It’s easy. Acquire a PTIN using the IRS website and register your business account. The whole process is short, with an annual fee attached at the end.


Obtain an EFIN


An Electronic Filing Identification Number (EFIN) is a number that’s assigned to you by the IRS that identifies businesses that have registered to become authorized IRS eFile Providers.


How To Get An EFIN


Retrieving an EFIN for your online tax preparation business is required to start legally operating your company. Specifically, if you file more than 10 federal tax returns, the Internal Revenue Service obligates tax preparers to file any returns electronically.

There are three steps to complete to get an EFIN, these include:

  • Register an IRS e-Services account
  • Submit your business application
  • Pass a suitability check

For more information on obtaining your EFIN, visit the IRS website, here.


Use The Right Tax Preparation Software


The right tax software program will support your virtual tax preparation business’s goals and be pertinent to operating a successful company.

For example, professional tax preparers who are working from home or online and want the flexibility of being able to work from multiple devices and locations would work best using an online tax solution. On the other hand, if you only plan on using one device, you can go the traditional route and use desktop software.

To help you decide which tax preparation software to use, I suggest coming up with a list of the things that you need from it and choosing a program from there. 


More On How To Start A Virtual Tax Preparation Business


As long as there are local, state, and federal taxes, there will be people who need help preparing and filing them. If you’ve been thinking it’s time to start a virtual tax preparation business, now’s the time.

Whether you want your tax business to be a full-time job or a seasonal gig, if your goal is to be successful then you must have a plan. 

I can help you with that.


These tips are a great start but for an even more detailed look at starting a virtual tax preparation business, register TODAY for my FREE online training, ‘Teach Me The Tax Game’ and learn everything you need to build a successful career in this lucrative industry!



Discover the Wealth Building Secrets That Made Me a Millionaire!

Share this: