[OneStep]

Hi everyone,

I have a full time job and I want to do few tax returns on the side during the 2015 tax season (primarily for family and friends, I will be happy if I get any other clients from referrals). This is just to get my feet wet, but eventually I would like to have my own tax/accounting business. A little bit about my background – I have about 2 years of experience in public accounting (individual and corp. tax returns, monthly write ups and some payroll) and a CPA license.

I have a couple of questions which I hope someone can help me with. First, do I have to have a business license and register my business with the state in order to prepare tax returns from home? Since I probably wont have much clients this year, I thought initially that it’s not necessary to get one, but I read here and on other websites people talking about getting business/city license and registering with the state etc.

My second question is about a liability insurance. I m looking into getting one since everyone recommends that but I m not sure if I have to have a registered business in order to get an insurance, or can i get one as a tax preparer?

And my last question, am I allowed to do taxes on the side if I work for a CPA firm or is it conflict of interest? I m looking for another job in industry right now, but I may still be at my current position in the CPA firm during tax season if can’t find anything earlier.

Look forward to reading your input and thoughts. Thanks a lot!

FAR - Apr 2013 - PASSED
REG - Oct 2013 - PASSED
AUD - Apr 2014 - PASSED
BEC - May 2014 - PASSED

[leglock]

U will also need a ptin from the irs if u dont have one already

[rzrbkfaith]

My firm does not allow side work. Everything must run through the firm. You will definitely want to check on that.

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[Gatorbates]

I did the same thing. I work full time in industry, so there's no conflict with a CPA firm. I'd definitely check on that. I did create my own S-Corp, for tax advantages. Only want a handful of clients to supplement my income and keep my tax mind fresh. In FL you have to register your S-corp (same way as your individual license) and local biz tax as well.

Licensed Florida CPA:
B: 71, 73, 79
A: 83
R: 78 (expired), 77
F: 74, 74, 80

It's finally freaking over.

[OneStep]

I already have a PTIN. And I will check with my firm if it would be okay to do work on the side.

Can anyone share their experience how they started, or are planning to start an accounting/tax business? What were the first steps you took to make your business legit? I guess it wont be a big hassle for me to register a business and get a business license and anything else I need for the business. I m just not very familiar with these formalities and wanted to avoid them at this point since I dont have any clients established as of right now.

FAR - Apr 2013 - PASSED
REG - Oct 2013 - PASSED
AUD - Apr 2014 - PASSED
BEC - May 2014 - PASSED

[yamar]

I think that as a CPA you will have to register with the Dept of Professional Regulation or something similar in your state.

I also think you will need an efin # in addition to your ptin. The efin wouldn't be necessary if you file fewer than 11 tax returns. efin authorization takes about 45 days so begin the process asap. You might also need a local business license.

What kind of tax software would you use?

FAR: 65,49,61,74,78
AUD: 65,68,64,78
REG: 56,77
BEC: 75

[michaelabs22]

I was wondering much of these same questions. Lilla once posted a great breakdown of everything she did or knew of to get started/set up. Does anyone remember the thread?

A - 10/28/12 - Passed!!!
B - 11/20/12 - Passed!!!
F - 11/12/13 - Passed!!!
R - 02/01/13 - Passed!!!

Work Experience - Done!
Ethics Exam - Boom! Done!

RI Licensed CPA.

[abranaugh]

I believe this is the thread you are talking about : https://www.another71.com/cpa-exam-forum/topic/starting-a-tax-business#post-379616

[leglock]

anyone get e and o insurance and an umbrella policy?

[OneStep]

@yamar, thanks for the reminder about the efin. I will look into that and apply for it if I start getting a lot of requests for tax returns.

I was thinking to use Drake for the tax returns. I have read good reviews about it and also in the most recent issue of the JoA magazine they have a very detailed article about different tax softwares, and it looks like for now Drake would fit my needs.

We use ProSystem fx Tax at work, but that would be too expensive for a start up practice.

@leglock, i was thinking to get E&O insurance. Havent decided which one yet. I have heard of AICPA, CAMICO, and just did a google search and it looks like you can get an insurance from most insurance agents. I m actually leaning towards the AICPA insurance. Just checked the quotes from AICPA insurance for lowest liability (100,000 per claim/250,000 annual aggregate) with $0 deductible and $1000 deductible, and annual cost is $207 and $175 respectively. That's not bad, i guess.

Have any of you decided between the different types of entities for your accounting practice…LLC, S-corp, or LLC electing S-corp status (the best of both worlds)? And why did you choose LLC or S-corp?

FAR - Apr 2013 - PASSED
REG - Oct 2013 - PASSED
AUD - Apr 2014 - PASSED
BEC - May 2014 - PASSED

[Author]

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