Many tax preparers discover that their passion lies in assisting others, going beyond and beyond ensuring that families in their society have the most favorable tax result possible. This drive sometimes causes them to follow their own independent tax business, but it can be daunting to ask where to start.

If you are an experienced tax preparation specialist interested in starting your own business, UnWrap Success Tax & Business Solutions can help guide you through the process from start to finish. To start with, here is a checklist of basic measures to establish yourself as a professional independent tax preparer. More information on each below.

  • Register your tax practice with your state
  • Obtain your PTIN
  • Apply for your EFIN
  • Take measures to protect your data and your clients’ information
  • Get your name out there!

State, Local and IRS Requirements

First, register your business with your state. This can be accomplished relatively easily; simply file a name for “Doing Business As” with the state of your practice. If you prefer, establishing a limited liability business — more frequently referred to as an LLC — will remove the registration step with the state, as this is already included in the process. As you take the first steps towards registering, your state government can also provide you with invaluable resources.

Preparer Tax Identification Number (PTIN)

Individuals charging any fee are needed to acquire a PTIN or Preparer Tax Identification Number for tax preparation services. Just register and apply online to get your PTIN. It is important to remember that your PTIN is unique to you as an individual, and each worker must also receive a valid PTIN if you employ someone else to prepare returns as part of your company. Every year, your PTIN needs to be renewed, but doing so is a fast and easy method.

Electronic Filing Identification Number (EFIN)

If you have previously worked as part of a tax preparation franchise or private practice, this specific requirement is likely already familiar to you. If you plan to file 11 or more tax returns, you must do so electronically as determined by the IRS.

To do this, you must first successfully obtain an EFIN and become an Authorized e-File Provider. Fortunately, this process is straightforward and free of cost. Simply submit your application and follow the provided steps to complete any necessary suitability checks. This process may include a:

  • Tax compliance check
  • Criminal background check
  • Credit check
  • A check for prior IRS e-File non-compliance

While this step in founding your tax preparation business does require a substantial amount of your time, the reward of establishing your successful practice is well worth the initial commitment. Once your request has been approved, you will obtain your EFIN and IRS letter of acceptance.

It is also recommended that you confirm whether or not your state needs distinct eFile apps to prepare returns for individuals or companies. Again, government agencies are a resource that is often untapped to answer questions that you may have during this stage.

Depending on the size and type of your business, the IRS may require that you obtain an EIN as well. Fortunately, doing so is easy online or by mail, fax or phone.

Establishing Your Business

Another significant step in the process of starting your own business is selecting the proper tax preparation software. UnWrap Success makes it easy to find exactly what you need based on a variety of factors, including the number of clients you expect to serve, which forms you’ll be using, how many countries in which you’ll file, and more.

Whether you recently chose to follow your own business as a tax preparer or this career was a professional objective for a long time, you’ll discover that UnWrap Success Tax & Business Solutions offers everything you need to get your practice off the ground. UnWrap Success has covered you throughout the lifetime of your business, from advice on continuing education and certifications to invaluable instruments and time-saving resources at your fingertips.

Get Your Name Out There

If you’re like many people who have left a tax preparation franchise lately, you already understand a lot about how to serve the requirements of your clients. However, if you’re not marketing yourself in an impactful way, in an already competitive industry, you may discover it hard to gain traction.

The first step to attaining the awareness of potential clients is building a website. Nearly everyone searches for tax preparation services online, and your name must be visible to those in need of the services you offer.

Be genuine and straightforward in your explanation of your business model and your connection with your clients. People seek out and choose a CPA based not only on experience and licensure but also on trustworthiness and approachable, personable nature.

Protect Your New Business

Like any other field serving the public, tax preparation experts must be sure to be protected in the event of any unexpected responsibility. Regardless of your skill, dedication, and experience, there is always a margin of potential error to be considered, and it is invariably wiser to err on the side of caution.

Malpractice insurance serves as an invaluable safety net in situations involving claims of error, omission or alleged negligence performed during the preparation of a client’s return. And, whether you’re working from a home office or choosing to own or rent an office, you’re advised to buy an insurance policy to cover the space’s contents as well.

Helpful Resources

It’s a complicated method to start your own company, but assistance is available. Remember to reach out with issues as they occur to your state’s CPA community and visit www. for helpful advice and resources from the U.S. Small Business Administration.

Getting Started

Establishing yourself as an independent tax preparation professional is a great way to acquire financial independence, whether you’re practicing full time or supplementing your income from another source. With the right tools, experience, and an entrepreneurial drive, you can become one of the many tax return preparation businesses that help 80 million Americans file each year.

Learn more about how UnWrap Success Tax & Business Solutions helps individual tax filing professionals like yourself earn a living doing what they love every day.

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