Penny Arcade Forums› Help / Advice Forum
As was foretold, we've added advertisements to the forums! If you have questions, or if you encounter any bugs, please visit this thread: https://forums.penny-arcade.com/discussion/240191/forum-advertisement-faq-and-reports-thread/
Options

Starting a tax preparation "business"

LailLail Surrey, B.C.Registered User regular
edited November 2009 in Help / Advice Forum
Ok, so I'm thinking of starting a business where I do other people's tax returns. I'm in school for accounting. I've learned how to do personal and corporate tax returns. I want to do this more for the experience and less to make money (I may offer my services for free).

I know a lot of people my age (early-twenties) who get their taxes done by H&R Block and pay ~$35 for something that takes a whole fifteen minutes. Most of the people I know have their one T4...maybe a T5...and maybe their T2202a (tuition), so doing their taxes would be pretty simple.

I wouldn't want to do anyone's taxes who is dealing with RRSPs or anything more complicated because of my lack of experience.

I plan on setting up a simple website where people can make an appointment with me, learn about exactly what I do, etc. And then just pimp out the website on facebook, as I figure I'd only offer to people I know...or friends of friends, to start.

So I have two questions:

a) Do you think people will be comfortable having their taxes done by someone who isn't a "professional"? Are people uncomfortable letting others know how much they make?

b) Does this plan sound reasonable? Any ideas/suggestions? Am I way out to lunch with this?

Lail on

Posts

  • Options
    RUNN1NGMANRUNN1NGMAN Registered User regular
    edited November 2009
    Don't you have to be licensed to prepare people's taxes for a fee? I can't imagine that it's something a person can do without some sort of license, given the legal issues involved (access to personal information, ability to get someone in a lot of trouble if you mess up, etc.)

    edit: huh, apparently in the vast majority of states you don't need a license...but the IRS is considering new rules that would require one.

    RUNN1NGMAN on
  • Options
    LailLail Surrey, B.C.Registered User regular
    edited November 2009
    Whoops! Sorry, I'm in Canada. Forgot to mention that.

    Lail on
  • Options
    4rch3nemy4rch3nemy Registered User regular
    edited November 2009
    This is something I'm also interested in.

    Calgary, AB, Canada here.
    I'll keep a watch on this thread. Sorry for no new info.

    4rch3nemy on
  • Options
    khainkhain Registered User regular
    edited November 2009
    A) I think I'd be uncomfortable with college student doing my tax return. I'm unsure of the penalties if you accidentally screw up a return, but at least to me it really wouldn't be worth the potential hassle when all I'm saving is $35 and it's less convenient since I have to make an appointment and go somewhere to get it done.

    I personally do my taxes online with H&R Block now, I used another program before, and it's not so much that doing them by hand is difficult, but that the programs remind you about anything you might have missed and eliminate a lot of potential mistakes combined with the convenience of doing it whenever you want and being fairly quick.

    khain on
  • Options
    SpherickSpherick Registered User regular
    edited November 2009
    In the US, anyone can prepare your tax return for you, but only CPAs or tax attorneys can represent you to the IRS in the event they call your bullshit.

    Spherick on
  • Options
    DeadfallDeadfall I don't think you realize just how rich he is. In fact, I should put on a monocle.Registered User regular
    edited November 2009
    The reason so many people pay so much money for businesses like HR Block (myself included before I learned to do it on my own) is because they guarantee their work. If there's any error with the IRS, they'll fix it for free, making the process very simple. Like what happened to me in 2002 when the IRS apparently decided they didn't believe I was a real person.

    Deadfall on
    7ivi73p71dgy.png
    xbl - HowYouGetAnts
    steam - WeAreAllGeth
  • Options
    ImprovoloneImprovolone Registered User regular
    edited November 2009
    I'd feel more comfortable with an accounting student walking me through doing it myself rather than doing it for me.

    Improvolone on
    Voice actor for hire. My time is free if your project is!
  • Options
    RUNN1NGMANRUNN1NGMAN Registered User regular
    edited November 2009
    Spherick wrote: »
    In the US, anyone can prepare your tax return for you, but only CPAs or tax attorneys can represent you to the IRS in the event they call your bullshit.

    Apparently by the end of the year that will change, if the IRS gets its way.

    RUNN1NGMAN on
  • Options
    SpherickSpherick Registered User regular
    edited November 2009
    RUNN1NGMAN wrote: »
    Spherick wrote: »
    In the US, anyone can prepare your tax return for you, but only CPAs or tax attorneys can represent you to the IRS in the event they call your bullshit.

    Apparently by the end of the year that will change, if the IRS gets its way.

    Really? Can you provide a source for that? Im very curious about how badly the IRS is screwing with the CPA profession. What with Circular 230 and now potentially this.

    edit: Unless you mean the IRS is changing it so that only CPAs can prepare returns now

    Spherick on
  • Options
    RUNN1NGMANRUNN1NGMAN Registered User regular
    edited November 2009
    Spherick wrote: »
    RUNN1NGMAN wrote: »
    Spherick wrote: »
    In the US, anyone can prepare your tax return for you, but only CPAs or tax attorneys can represent you to the IRS in the event they call your bullshit.

    Apparently by the end of the year that will change, if the IRS gets its way.

    Really? Can you provide a source for that? Im very curious about how badly the IRS is screwing with the CPA profession. What with Circular 230 and now potentially this.

    edit: Unless you mean the IRS is changing it so that only CPAs can prepare returns now

    http://www.irs.gov/newsroom/article/0,,id=209375,00.html

    RUNN1NGMAN on
  • Options
    CycophantCycophant Registered User regular
    edited November 2009
    The thing about H&R Block and all those other tax-preparation companies is that while they say they'll come to your rescue if you get audited, all they'll really do is offer to go over your return again for free, to ensure they didn't fuck anything up. They're not going to pay any of your penalties or interest charges without putting up one hell of a fight first. They wouldn't still be in business if they didn't.

    Plus there's the other fact that a vast majority of the people that I've seen working at these tax places around tax time are generally as qualified, if not less so than the OP, leads me to believe that the OP probably would have a good customer base once they get word out about it.

    Lail: this is about all I could find on RevCan's website about tax professionals, but it looks like there's a bunch of good info there. If there's any limitations about who can prepare tax returns for people, it should be on that page somewhere. It also might not be a bad idea to talk to a tax lawyer (or at least someone at your school) about legal and liability concerns about running such a business. Having a basic waiver to cover your ass in case a customer forgets to give you all his T-slips then comes after you six months later asking to pay his $7000 interest fine isn't such a bad idea.

    Cycophant on
    sig.gif
  • Options
    LailLail Surrey, B.C.Registered User regular
    edited November 2009
    Thank you!

    Yeah, my profs have stayed away from any legalities from doing taxes for others...probably so we don't go out and get ourselves sued then try to turn it on the school.

    I do like Improvolone's idea...maybe I could offer to teach people to do their taxes, as well.

    And thanks for the link, Cycophant :)

    Lail on
  • Options
    PeenPeen Registered User regular
    edited November 2009
    Another thought is that you could contact your local public library and see if you could do volunteer tax-prep work there. We have people do it at some of our libraries here in Philadelphia and you'll by and large get old people or people that aren't comfortable with the online forms, it could be just what you're looking for.

    Peen on
  • Options
    November FifthNovember Fifth Registered User regular
    edited November 2009
    One way tax preparers in the States make their money is by offering customers on the spot tax refunds, which are essentially guaranteed short term high interest loans.

    This might be illegal in Canada though and is part of what the IRS is trying to crack down on.

    November Fifth on
Sign In or Register to comment.
Penny Arcade Forums› Help / Advice Forum