8 Reasons Why You Should Add TAX PREPARER to Your Bookkeeping Services
Becoming a tax preparer is a GREAT add on for your bookkeeping business. Plus, it’s actually not too difficult to get certified to prepare taxes. In this article, I will share 8 reasons why you should include tax preparation to your bookkeeping services.
Watch the video here, or keep reading!
8 Reasons to Become a Tax Preparer
Not only can you increase your income almost immediately, but this service is essential, so business owners are looking for help with it. Because of this, you can really use tax preparation as a launching pad for finding more bookkeeping clients. Let’s dive into all 8 ways tax preparation can be a beneficial service for you to add to your bookkeeping offerings.
#1 - Increased Income as a Tax Preparer
The number one reason to become a tax preparer is that you have the potential to make more money. It’s an essential service that clients want, so you can charge a premium for it.
Tax preparation is a specialized skill set, and you have to get certified in order to become a tax preparer. Therefore, you become even more valuable, and you can charge more by offering this service to your clients.
#2 - Tax Prep is an Essential Service
As I mentioned earlier, tax preparation is an essential service. Everyone has to pay taxes and a large majority of clients want help doing so, especially if their business is more complicated with multiple products and services or includes a team of employees or contractors.
#3 - Get More Bookkeeping Clients
Tax preparation services are a great way to market for potential bookkeeping clients. I have found that business owners are more likely to need help around February when they realize they need to file their taxes. If you offer both bookkeeping and tax preparation services, you could turn many of your tax preparing clients into new year-round bookkeeping clients around tax time.
#4 - Increased Efficiency
Now your client doesn’t need to hire two different people; a CPA and a bookkeeper. They can have you do both their bookkeeping and their taxes. This will save your client time, and they will only need to communicate with one person.
I have found that every year at tax time, I spend a good amount of time communicating with my client’s accountant. They often have questions about why I did things a certain way or they may want additional information regarding part of the books.
However, if you are the one doing both the bookkeeping and taxes, you would already know the answers to these questions, so it saves you time as well.
#5 - Accurate Quarterlies
Similarly, being both the tax preparer and the bookkeeper makes your quarterly taxes more accurate. Typically, my clients don’t reevaluate the amount of their quarterly taxes throughout the year, unless there is a major increase or decrease in revenue.
However, if you offer both services, you can adjust the quarterly tax payment throughout the year. You will know right away if your client needs to pay more or less in taxes for each quarter.
#6 Fast Start-up
Getting certified as a tax preparer is relatively quick and easy. My friend Amy did this a couple years ago and shared her experience with me.
After you are certified you can start offering the service through your bookkeeping business right away, so you don’t have to completely start over.
#7 Flexibility
I watched a YT video by Life in the Kash Lane and she feels that being a tax preparer offers flexibility to her life. She likes that tax preparation is a seasonal business.
In her experience, she can work really hard, earn a ton of money, and then she can take a break and use some vacation time the rest of the year.
#8 Useful Knowledge for Your Own Business
Being a tax preparer will help teach you how to save money on your own taxes. I own a small business, my husband owns a small business, and we feel like we are paying taxes all the time.
As a bookkeeper, taxes are still a mystery to me. I rely on someone else to tell me the best way to spend my money and what to use as a tax write off. But does my accountant care about my taxes as much as I care? Probably not.
If you are a tax preparer and you have the knowledge, you could save money by dialing into all the possible tax savings available to you.
Why I Don’t Prepare Taxes
Even though I know that adding tax preparation as a service to a bookkeeping business is beneficial, I chose not to go this route. There are a few reasons for this, including that it is seasonal and I don’t have the time to invest in additional services.
Tax Prep is a Seasonal Business
One reason why I personally haven’t pursued becoming a tax preparer is, as mentioned before, tax preparing is a seasonal business.
Tax time is a very busy time of year, and accountants barely have time to eat, sleep, and function. It causes a lot of stress during that one time of year, and, even though I could earn a good chunk of extra revenue, that’s not something I want to take on.
I Don’t Have the Time
My second reason for not adding tax preparation to my bookkeeping business is because my schedule is completely booked. I have the number of bookkeeping clients I want, I’m working on my YouTube channel, and I have a full life outside of work with my family.
Any time you start something new, it takes you a bit longer at first. You have to take into consideration the learning curve of trying to figure out what you are doing and not succumbing to impostor syndrome.
Therefore, I have not prioritized learning the skills I would need in order to offer tax preparation services to my bookkeeping clients, but it’s a great option if you are interested!
Let me know if you have become a tax preparer and what has been your favorite part of adding this service to your bookkeeping business.
