The accounting services industry is a $156 billion business in the US. Every year, millions of Americans file their taxes, but not all fully understand the tax preparation’s ins and outs. The number of forms and calculations makes the process nothing short of a nightmare.
However, if you get the hang of it, there is serious money to be made in the virtual tax preparation business. But you need to know a few things before getting started.
Let’s take a look at some of them!
1. Relevant Knowledge of Accounting and Tax Law
Now, we don’t mean that you need a degree in accounting but what you do need is cognizance of how tax law works. You need to understand how much tax your client needs to pay and how much can be written off. You also need to know how to account for that amount to get the best tax outcome for your client.
A good checklist to figure out if you are on the right track involves:
- Whether you know different accounting standards such as GAAP.
- You are aware of any major changes in the tax code recently.
- If enquired, you will be able to answer questions about tax laws from your potential clients.
Bonus tip: The best virtual tax preparer will always have all the documentation in place if they were ever audited by the IRS.
2. A Tax Preparation Certificate
Though certification requirements differ from state to state, getting yourself certified by the state you will be practicing in is always a good idea. This helps establish you as someone who can be trusted. It also helps build a business as people see you as someone who knows what they are doing.
You can check your state’s credentials and certifications here to find out more about how you can achieve a tax preparer status.
3. Excellent Computer Skills
This one’s really a no-brainer. If you are going to work online, you need to be tech-savvy. But the good news is that you don’t need to be a computer genius to work as a virtual tax preparer. You just need to know enough to be able to collect your clients’ forms (like W2s) and other financial documents.
Remember, knowing how to synchronize documents and provide the best tax result for your client is the goal in the tax preparation world. And this goal is best achieved digitally.
It is a bit cliche, but communication is the key to success in this sphere. Most people are confused with their tax filings, which is why they brought you on board. So, ensure that you answer their questions and respond to their queries promptly and adequately.
The key to success for you will lie as much in how you communicate with your clients as in the actual work you do for them.
Although challenging, the job of a virtual tax preparer is a highly lucrative opportunity. And the best part about it is that it is just as much practice as it is theory. So, you learn the tricks of the trade more on the job than you would in a classroom.