Are you on the hunt for a side hustle that can bring in some extra cash? Well, have you considered tax preparation? It's a great option for those who have a knack for numbers and enjoy paying close attention to detail.
Let's dive into the world of tax prep and explore how you can get started, what certifications you might need, the expected returns, and whether you can work independently or need to apply at businesses.
Getting Started in Tax Preparation
The best way to start is to get familiar with the tax code. There are various ways you can do this, like reading IRS publications, attending tax seminars, or even taking online courses. If you're eager to get hands-on experience, you could consider working for a tax preparation company to learn from experienced tax preparers and gain invaluable experience.
Necessary Training and Certifications
While it's not a requirement to have a certification to work as a tax professional, many clients prefer to work with someone who has one. Certifications like Enrolled Agent (EA), Certified Public Accountant (CPA), and Registered Tax Return Preparer (RTRP) are all commonly recognized. Different certifications have different requirements, so it's important to find out which one might be best for you.
So, what can you expect in terms of returns? The amount you can earn as a tax preparer depends on several factors, including your level of experience, the complexity of the tax returns you're preparing, and the fees you charge.
According to the ProConnect Institution, the average fee for preparing a Form 1040 without itemized deductions is $220, $323 for an itemized Form 1040 with Schedule, and $903 for Form 1120S—S corporation for the year 2023.
Keep in mind that this amount can vary greatly depending on your location and client base.
Working Independently or at Businesses
Tax preparation offers you the flexibility to work either independently or for a tax preparation business. If you choose to work independently, you'll need to market yourself to potential clients, set your prices, and handle all aspects of the business. But if you work for a tax preparation business, you'll have a steady stream of clients and the support of a larger organization.
Tips for a Successful Tax Preparation Side Hustle
If you're thinking of starting a tax preparation side hustle, staying informed on tax laws and regulations is crucial. As an advanced-level professional, stay up-to-date by regularly reviewing the IRS website, consulting with peers in the field, and attending conferences. By keeping up with the latest changes, you can provide your clients with the best advice possible and ensure your success as a tax preparer.
In conclusion, tax preparation is an excellent option for a side hustle. It requires strong organizational skills, attention to detail, and a passion for numbers.
To get started, you'll want to familiarize yourself with the tax code and consider obtaining a certification. The amount of money you can earn can vary, but it can be a lucrative side hustle if done right. Additionally, you have the option to work independently or for a tax preparation business, depending on your preferences.
With hard work and dedication, tax preparation can be a successful and rewarding side hustle. So, go ahead and explore this exciting option to earn some extra cash on the side.