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Starting a tax preparation business from home in Nevada

Often considered to be a recession proof business, you can start tax preparation business Nevada right from your home. There are several different types of businesses that you can choose from and yet the role of a tax preparer is known to be highly lucrative. There are many people who run a home based tax preparation business while others see tax preparation for small business as another way of earning additional income.

Introduction to tax preparation business

Tax preparation is a process of preparing tax returns and this includes income tax returns, which is created for the purpose of compensation for any person or entity other than the taxpayer. Tax preparations are fast turning into one of the most popular especially among those who want to start home based businesses in Nevada. Hence, we have created this detailed guide that will provide you with an insight into how to start a tax preparation business at home and also answer queries pertaining to the role of a professional tax preparer and the important requirements towards becoming one.

Professional Tax Preparer

According to the Bureau of Labor Statistics, there is a great demand for tax preparers in the United States and this is expected to grow by almost 14 percent by 2022. In fact, the IRS had processed in excess of 250.3 million Federal tax returns as well as supplemental documents by the end of 2018. A large percentage of returns and tax related documents were prepared by either a certified public accountant (CPA) or a professional tax preparer or a tax preparation franchise. This increasing demand of professional tax preparers is one of the reasons why more and more entrepreneurs are looking to start a tax preparation business in Nevada.

Who can be a professional tax preparer?

If you are someone with an interest in accounting and want to prepare tax returns then you can become a professional tax preparer. The reason why people often start a tax preparation businesss in Nevada is because it is considered to be a lucrative part-time or full-time business. You can even start this business right from your home and can also operate it as a secondary business.

There are several types of professional tax preparers including Certified Public Accountants (CPA), Enrolled agents (EAs), and Non-Credentialed Income Tax Preparers. You can choose to operate as any of the above types of professional tax preparer although it is important to ensure you have fulfilled all state based requirements. The requirements are different for individuals and those wanting to be involved in tax preparation for small business.

What does a tax preparer do?

If you are planning to start a tax preparation business in Nevada then it is important to understand the role of a professional tax preparer. The basic role is to help in preparing income tax returns on behalf of businesses as well as individuals. The tax preparation will include calculating taxes, filing and signing of returns. As a professional tax preparer, you will be working with clients and the IRS as one of the roles is to represent the taxpayer during Internal Revenue Service examinations of their tax returns.

If you start a tax preparation business in Nevada then one of the important roles will also be to assist your client with tax court issues and tax audits. If your primary focus is tax preparation for small businesses then your role will include assisting clients with being compliant where state and federal tax codes are concerned and simultaneously also help in minimizing their tax burden. It is essential to remember that the role of a professional tax preparer is dependent on the credentials and representation rights.

Steps to start a tax preparation business in Nevada

As a tax preparer, you will be able to enjoy several benefits throughout your career including high income, job security, and flexibility. If you are planning to start a home based business in Nevada for tax preparation then it is important to know the various requirements especially in Nevada and on the Federal level. You will also be required to apply for certifications and tax identification numbers as it will help increase your credibility and thus be able to handle tax preparation for a small business. In order to help you understand the requirements, we have created a step-by-step process of how you can become a professional tax preparer.

Get the necessary education & training

The first step towards how to start a tax preparation business at home is to get the necessary education and training. You may be surprised to know that there are no strict educational requirements and the minimum education requirements for a professional tax preparer is a high school degree or General Educational Development (GED). Of course, completing formal education or specialized training in tax preparation will benefit you in the long run and especially if you plan to start a tax preparation business in Nevada.

The question is who provides education that will help you with your endeavors? There are several schools and companies that offer courses and training related to tax-preparation. These training programs will provide you with the education and confidence necessary to start a home based business in Nevada. The programs have been designed to impart specific knowledge like preparing taxes, conducting interviews with clients, and provide advice to clients regarding tax-paying strategies.

Your professional horizon will increase as a tax preparer if you obtain a bachelor’s degree in accounting, finance or business as such a course will also help attain knowledge pertaining to tax laws and regulations in the United States. If you are looking for a truly professional edge then earning a credential through the Accreditation Council for Accountancy and Taxation® (ACAT) can be highly beneficial towards your tax preparation business plan.

Obtain Preparer Tax Identification Number (PTIN)

One of the essential requirements for a professional tax preparer is obtaining a Preparer Tax Identification Number (PTIN). If you are planning to start a tax preparation business in Nevada that will be involved in assisting and preparing clients for filing their U.S. federal tax return, refunds, or claims then you will be required to apply to the Internal Revenue Service (IRS) for a PTIN. There are two ways in which you can file the application and they are:

  • Apply for your Preparer Tax Identification Number (PTIN) online by creating a new user account
  • Download, complete, and submit PTIN application form W12 by post to the IRS

The normal processing time for a Preparer Tax Identification Number (PTIN) application can vary from 4-6 weeks.

Decide business name and register business

An important aspect of how to start a tax preparation business at home is identifying a business name and registering your business in Nevada. Every new business has to identify a unique business name that should be compliant with the Nevada Business Code and then reserve it with the office of the Secretary of State. Similarly, depending on the type of business like LLC or a business corporation; you can start a home based business in Nevada only after you register the entity with the Secretary of State.

The process of name and business registration involves being compliant with all Nevada business laws and submitting detailed documentation along with a fee. This process can be extensive and confusing, which is why IncParadise can help you with the process of registration of business entities and thus you can start a tax preparation business in Nevada quickly. This will help you save time and ensure you are in compliance with all Nevada business laws. IncParadise is an incorporation specialist with experience in helping startups and small businesses established in Nevada and other states in the US.

Set up your new Nevada business with IncParadise today!

Comply with Nevada state licensing requirements

Nevada is considered as one of the best places to start a new business because of the several tax advantages and small business incentives the state offers. If you want to start a tax preparation business in Nevada then in order to conduct your business, you will be required to apply for a business license. According to Chapter 76 of 2015 Nevada Revised Statutes, the business license is mandatory for all Title 7 entities, which includes Limited Liability Companies (LLC), Corporations, Limited Liability Limited Partnerships (LLLP), Limited Liability Partnerships (LLP), Limited Partnerships (LP), and Business Trusts. As a business or entrepreneur, you need to comply with all Nevada state licensing requirements including qualification for state as well as municipal/county licenses. You can check Nevada SOS for business license document or application preparation and submission guidelines. IncParadise offers information sharing and support through a detailed Nevada Business licensing guide, which will help you to determine the rules and regulations of the state and the county where you are planning to establish your business.

Obtain an Employee Identification Number (EIN)

When you are working on a tax preparation business plan, it is important to identify various business requirements in advance like the need for an Employee Identification Number or EIN. This is a unique nine digit number that is assigned by the Internal Revenue Service (IRS) to facilitate the filing of tax returns. If you are planning to start a home based business in Nevada then you can order your EIN directly through IncParadise as it will save you time and the long process that a startup has to undergo.

Apply for your tax preparation business EIN today!

Open a Business Bank Account

Maintaining a separate bank account for your business will definitely have long-term benefits especially when it comes to tax preparation for small business. Some businesses like sole proprietorship or single-owner LLCs can have a single bank account for personal and business but this may create issues where privacy is concerned. Whether you are planning to register a limited liability company or a business corporation, you can start by opening a business bank account as it will also help increase business credibility. We understand that you may have several questions related to opening a business bank account and hence we have created a detailed guide that will help you identify account related requirements.

Obtain Electronic filing identification number (EFIN)

One of the important aspects of how to start a tax preparation business at home is obtaining an Electronic filing identification number (EFIN). Today there are over 1.2 million tax preparers in the US and in order to successfully perform such a role, obtaining an EFIN from the Internal Revenue Service (IRS) is necessary. The EFIN will help you to e-file tax returns on behalf of your clients. The norm is that if you start a tax preparation business in Nevada and will be filing 11 or more tax returns in a specific year then you will be required to e-file these returns. How do you obtain an Electronic filing identification number (EFIN)? You need to do the following:

  • Create an e-services Account on the IRS website using specific information like Social Security number, email address, etc. The registration for e-services account involves a two-factor authentication process also known as Secure Access.
  • Submit your application for an authorized IRS e-file provider. The application process is not simple and several types of information will be required as a part of the process including identification information for your tax preparation firm, Principal and Responsible Officials, and fingerprints among others. This information is taken so that the integrity and security of the e-filing system can be protected. It is important to know that the IRS can take a maximum of 45 days to approve your e-file application.
  • If you are planning to start a home based business in Nevada for tax preparation then passing a suitability check is necessary for obtaining EFIN. The suitability check is a type of background check conducted by the IRS on the individual or firm applying for an EFIN

Get tax preparation software

If you are planning to start a tax preparation business in Nevada then it can be quite a rewarding business and using tax preparation software or tools can make your work much easier. There is a wide variety of software and tools available thanks to advancement in technology and they are an essential aspect of any tax preparation business plan. These software can help you with different tasks ranging from filing basic returns to audit support including personalized audit assessment, providing industry-specific deductions, review of mortgage tax deductions, and protecting tax information. Some of the top tax software programs include TurboTax, TaxSlayer, Jackson Hewitt, H&R Block, and Liberty Tax among others.

Market your tax preparation business

Whether you are a tax preparer or CPA with an intention to start a home based business in Nevada, an important catalyst of growth and success of your startup is marketing. Every business consists of several components that help in the smooth functioning of the business like electricity, qualified employees, internet, phone etc. You will be required to pay bills and salary to employees and that revenue can be generated through clients and marketing plays a key role in ensuring you are able to reach out to prospective clients. You need to focus on creating a marketing strategy first as it will be integral towards a successful tax preparation business plan. There are several cost effective ways through which you can promote your business including creating a proper website, writing a blog, using tax accounting programs and highlighting it in your press releases or e-mailers, word-of-mouth promotions, community involvement, and active participation on social media platforms among others.

Maintain business compliance

Anyone can start a new business but long-term growth and sustainability is dependent on several factors like the ability to maintain business compliance. If you start a tax preparation business in Nevada then you will need to maintain compliance with Nevada state and federal business laws as well as US Tax Compliance laws.

You will also be required to meet any and all internal and external business compliance requirements including filing of proper paperwork, filing documents required by the state like annual report or initial report, business licenses and permits, and record keeping among others.We at IncParadise can provide assistance through our business specific basic services including that of annual report, mail forwarding, and business licenses among others.

IncParadise is there to assist!

If you are planning to start a tax preparation business in Nevada then it is time to get it registered in the state. We at IncParadise can assist you with the process of registering your tax preparer business in the state and also represent you in front of the Secretary of State as your chosen registered agent in Nevada.

When you sign IncParadise as your registered agent, you will be able to take advantage of a variety of additional services created specifically for startups and small businesses like mail forwarding service, virtual office, filing of initial and annual reports, application for business licenses and much more. We are one of the top registered agents in the country with a team of experts ready to provide answers to any business related query you may have.

Start your tax preparation business in Nevada