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have to budget wisely throughout the remaining months of the year.

Also, while rare, it is possible you could be held liable if a client suffers a financial setback from the tax return you prepared for him. The proper insurance policy can help ease worries from such occurrences.

*What You Need to Get Started

Your tax preparation office doesn't need to be fancy. You'll need a dedicated office space that is neat and orderly where you can meet with clients. An ideal location would be a room that has a separate, private entrance if you feel uncomfortable with clients trekking through your home.

In addition, you'll need a separate phone line so clients can reach you when family members are using your personal line. You'll also need a basic computer, tax preparation software, general office supplies and tax reference guides. Accounting software that allows you to maintain your own books, print invoices and track receivables will also be necessary.

Many tax preparers seek an "Errors and Admissions" insurance policy to protect themselves from preparation mistakes, or purchase tax preparation bonds, both of which are available through an insurance agent.

Lastly, you'll need to apply with the IRS for the permission to be an e-file provider so that you can provide e-filing services for your clients. You may also choose to take the IRS VITA (Volunteers Income Tax Assistance) training, which is available free on-line.

*Real-Life Example

After five years of working for other tax preparers, Linda Lazaro took a leap of faith and decided to start her own tax preparation business. She has found the best benefit to be the flexibility it provides for her family.

"Public income tax preparation is very rewarding for several reasons," states Lazaro. "But, the best reason of all for a busy Mom is, it's SEASONAL. You start in January, and it's pretty well over by April 15. You have the summer and fall months to be with your children. Even in those first years, I earned in a season, as much as I could have working somewhere else for six months. Now that I have my own business, I earn more in those three months than I could working the entire year anyplace else."

http://online.onetcenter .org/link/summary/13-2082.00
ht tp://www.about-accounting.com/ starting-business/tax-preparat ion-business.aspx
http://www.ir s.gov/pub/irs-pdf/pcir230.pdf
h ttp://www.about-accounting.com /starting-business/prepare-tax -return.aspx
http://www.irs.gov /app/vita/index.jsp
http://www. bizymoms.com/smallbusinesshome office/tax-preparation-busines s.html

Learn more about this author, Starla Ross.
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