Your Tax Preparer income fluctuates over the course of the year, but your financial situation doesn’t have to. Discover the seven ways Tax Preparers have learned to increase their financial security all year.
1. Taxpayer Representation
Double down on your tax background and become an IRS Enrolled Agent (EA). If you aren’t an EA, you can represent your previous tax clients--those whose tax return you signed--to the IRS, but you are limited to that small pool.
Benefit
Gain more insight into the tax industry and have a natural pool of clients for tax preparation work.
Considerations
The financial sector is highly regulated and requires continuing education and other obligations, in addition to running your businesses.
2. Payroll
You can work for one or a few companies as a payroll specialist ensuring that employees receive their dues and that all the financial ducks are in a row. Some Tax Preparers make money the rest of the year by running and managing payroll.
Benefit
You have a steady income and can be on the payroll yourself.
Considerations
Since payroll is a year-round commitment, there is not an easy way to scale back your hours during tax season without getting rid of some of your clients. Your steady income also limits what you can do with both your Tax Preparer income and your payroll income.
3. Bookkeeping
Similar to payroll, bookkeeping is another essential function that businesses choose to outsource. Bookkeepers and payroll specialists must have the right software while keeping up to date on the latest rules, regulations, and at times HR and company operational changes.
Benefit
You can work for yourself, choose your hours, and use your financial knowledge.
Considerations
You need to purchase software that works for the client and may need to buy multiple licenses to fulfill your various clients’ needs.
4. Tax Preparation for Accounting Firms
Some accounting firms will outsource tax preparation for their clients to CPAs and other tax preparation specialists during tax season and throughout the year. Your Tax Preparer income can grow exponentially, and you will have no shortage of tax preparation work if you perform contract tax work for accounting firms.
Benefit
A significant stream of income during January through April that could last you through the year.
Considerations
Even for Tax Preparers during tax season, there are only 24 hours in the day. As a Tax Preparer, the number of clients you can personally service limits your revenue (unlike the accounting firms that send their clients to you).
5. Get Your Securities Licenses
The Series 6, Series 7, and Series 63 securities licenses are the most common for those who aren’t trying to be full-time stock traders.
According to Kaplan Financial Education’s website, a Series 6 license allows you to:
- Be a limited FINRA representative
- Sell mutual funds, mutual funds, variable annuities, variable life insurance, unit investment trusts (UITs), and municipal fund securities
A Series 7 (General Securities) license:
- Allows the license holder to sell any personal security (fixed income investments, stocks, bonds)
- Lets the license holder solicit orders for securities
- Requires a Series 6 or Series 7 in conjunction with this license to allow the licensed agent to be able to sell securities
Benefit
You will be able to help your clients save money on their taxes, and then reinvest those savings for (potentially) higher dividends to save for retirement, invest for their children’s college fund, or simply take a few more vacations. Understanding both tax laws and stocks is a great financial benefit to your clients.
Considerations
Getting your Series 6, 7, or 63 license is a serious investment of time and energy. You must memorize the laws, and even then there is still the chance you do not pass. It’s not to say don’t try, but getting your securities licenses is an investment that should not be taken lightly.
6. Sell insurance and other financial products
Many financial services companies help consumers with debt relief, life insurance, and many other products to provide financial assistance and security. Selling these services can be an excellent income source for tax preparation specialists.
Benefit
You can work with as many or few people as you wish, and grow your income with residual income from past sales and monthly fees that the sale of financial services can provide you.
Considerations
You must find your clients and you are limited to those you can personally help. The inability to leverage your time and knowledge truncates your income potential. Like any sales job, your income is a direct reflection of the amount of financial product you sell.
7. Run a financial service business
If you run a financial services company, like a credit repair company, you have built-in credibility that resonates with clients. You can increase your Tax Preparer income while helping clients build a substantial financial base with better credit.
Best of all, you can expand your business beyond who you can sit down with one-on-one by training a team to do credit repair. No licenses are required, no continuing education credits needed, and you give people a very niche service that tax preparation clients will trust you to do well for them.
Benefit
People come to you for credit repair services and usually fall into one of three categories:
- Someone in debt and in need of relief
- A family in mid-range income and mid-range score who wants to qualify for a home or car loan
- A person with a high credit score who understands the benefit of paying less over the life of a large, financed purchase
Credit repair works for almost everyone. Most of your tax preparation clients already fit into one of these three categories and are a natural fit for help throughout the year. If you structure your business so that you collect an affordable monthly fee for your services, you can build a steady stream of income for doing great work to further serve your existing clients.
Considerations
Building a credit repair business in addition to your tax preparation income means that you will need an expert that can help you keep everything in order.
That’s why Credit Repair Cloud developed our intuitive credit repair business software with easy integrations to your existing lead generation, CRM, and bookkeeping software. Our software is designed by credit repair experts and automates the busy work so you can serve more clients.
Some of our software users that make millions of dollars every year in their credit repair business alone. Of course, we won’t limit you to credit repair. There are many examples of people who built a credit repair business while keeping their other income source.
Trying to live the whole year on only three or four months of consistent income can be really taxing.
Learn how you can keep your Tax Preparer clients and run a profitable credit repair business today!
