[T-rex]

Are any of y’all interested in running your own CPA show at some point? I know I am. My days as an employee are numbered. I’m simply not employee material.

I’ll be licensed in CA once I pass the exam, but because I live in TX, I’ll need to get licensed here in order to practice here. The TX requirements differ substantially from those of CA, so it may take me awhile to get reciprocity in TX. In the interim, I figure I can start a side bookkeeping business since I don’t need a CPA license for that. I’ll fire it up once I’m certain that I’ve passed the exam. I actually had a small bookkeeping business long ago, so I have some idea of what I need to do.

If anyone else is interested in starting his or her own CPA practice or bookkeeping business, maybe we can exchange ideas here on how to round up clients, how much to charge them, how to protect client information, what the best software programs are, etc.

AUD - 95, BEC - 85
REG - 85, Rawrrrrrr FAR - 88
Used Becker for all sections.
CA candidate not residing in CA

[Anonymous]

So I was thinking of doing some contracted tax work this tax season as a registered tax preparer since I probably wont have my license until after the start of tax season. My friend has done this for the last few tax seasons, and she's made relationships with two CPA's who gave her the Lacerte software for her home computer. She works a regular full time job too, so after work she stops by the CPA's office and picks up the paperwork to do the returns, and then drops off the completed returns later in the week. She charges one CPA an hourly rate, and another one pays her a percentage of the return amount.

I was thinking of doing something like this too, as well as posting on craigslist and doing taxes for family and friends. Im wondering if I should just be self employed, or if I should get a business license. But then if I were to make a business, would I need to incorporate to protect my personal assets? I would be bonded (in CA you are required to have a min $5,000 bond) but I dont know if that is enough to protect myself?

[T-rex]

@diane, Thank you! I had clients over the years who wanted me to do unethical things so I dropped them. Including items that are clearly personal is a common one, and so is fudging payroll taxes and sales taxes. I actually worked on a case once in which a guy ended up in jail for sales tax evasion. It was interesting and stupid.

I spent some time looking into the QB Pro Advisor last night and came across a great website that you might find helpful in making a decision on that: https://www.longforsuccess.com/ I'm still torn myself on what to do about the QB Pro Advisor, so I'm going to keep researching.

The lady who owns Long for Success has two books out on QB consulting and starting your own home-based business. You can read about them on her site or on Amazon. They seem like quality pieces, so I ordered both.

As far as income taxes go, I really don't know what the best software is, but there were different ones that people seemed to like mentioned in this thread. I'm starting to think that I might be better off skipping tax preparation altogether and focusing on litigation/forensic accounting support (bankruptcy, divorce, etc.). I have a fraud background that I might be able to leverage. Of course, it's possible that the forensic work will require tax preparation know-how. I need to keep exploring my options. I'm sure I'll change my mind 100 times before I finally settle on something.

@CalCPA, I think that your best bet is to get a book or two on starting your own tax practice. Incorporating isn't a guarantee that your personal assets won't be at risk. For example, I have an LLC, but if I were to try to borrow under it, I'd be ask to personally guarantee the loan since the LLC doesn't have enough assets. Go on Amazon and do a search for starting your own tax practice. Read through the reviews of the various books to separate the quality ones from the crap. I did this last night for bookkeeping practices, and it was helpful.

Good luck to you both!

AUD - 95, BEC - 85
REG - 85, Rawrrrrrr FAR - 88
Used Becker for all sections.
CA candidate not residing in CA

[T-rex]

I'm taking a baby-steps approach. Through today I've completed Baby Step 1.

Baby Step 1–

Came up with clever business name (clever to me anyway)

Set up LLC

Secured domain name (having to use .net rather than .com–Grrrrr!)

Opened up business checking account

Obtained business credit card (need to establish credit for the business)

Here are the next steps:

Baby Step 2:

Read the two books I ordered on how to launch my business

Narrow down my target market

Create brochures

Order business cards

Set up my website

Purchase QuickBooks and get up to speed on it (I haven't used it in quite some time.)

Set up cellphone and Internet in business name (Yay for tax deductions!)

Pass the damn CPA exam!

Baby Step 3:

TBD, but it will likely relate to marketing.

AUD - 95, BEC - 85
REG - 85, Rawrrrrrr FAR - 88
Used Becker for all sections.
CA candidate not residing in CA

[Anonymous]

I actually started my bookkeeping business a couple of years ago, at around the same time I started studying for the CPA exam which I thought I could do (launching my business and studying). I soon realized that I can not focus on both at the same time. So, I kept my two clinets that I had, and focused on studying. So far, I have passed FAR and AUD and I am waiting for BEC and REG results in a couple of weeks. Once I pass the two parts, I am thinking to get a consulting job while continue expanding my business. I just so anxious to get these two parts passed. I am in CA. Let's bounce some more ideas around for marketing.

[T-rex]

@cpa4now, That's great that you started your own bookkeeping business! Congrats on passing FAR and AUD, and I hope you also pass BEC and REG! I get that it's hard to focus on the business and the CPA exam. Heck, it's hard to focus on anything in addition to that exam. If I didn't pass FAR, I'll have to put my business on hold until I do.

I'd love to share marketing ideas. At the moment, I'm thinking of creating brochures and business cards, putting on a suit, and going around to certain local law firms and forensic accounting firms to introduce myself and offer up my services. I'm also considering joining some trade associations, but I don't know which ones yet. I don't know how well any of this will actually work, but it's worth a shot.

I used to do bookkeeping for small businesses and the ways I found clients were through part-time bookkeeper job ads, a teaching stint that I did, referrals from clients, and referrals from a small CPA firm I used to work for.

AUD - 95, BEC - 85
REG - 85, Rawrrrrrr FAR - 88
Used Becker for all sections.
CA candidate not residing in CA

[Shanti]

Trying to study and start your own business is hard! I started my bookkeeping & tax prep business 2 years ago. I became a QB proadvisor and I can tell you that I haven't received a call off the website yet! I'm not even that far down on the search list. What I've found the proadvisor does for me is new clients feel more comfortable with me sooner. The exams are easy (you have 6 times to take the tests and the questions don't change). You do get enough free software that makes it worth it to me.

Since I've been at the business for 2 years now, it seems that it is just now growing fast (right when I want to study the most). I subcontract with a local CPA and a Cybertary office and keep getting asked if I can handle more clients. While this is great for my pocketbook, it's not so great for study and family time. Not to mention I have to balance their needs with my clients needs. I think I get to see more variety of clients since my network is pretty small. Today I was in a dry cleaners setting them up on QB and getting ready to do their tax return because QB remote access was having issues on their computer.

If anybody has any questions, feel free to ask.

[Anonymous]

@T-Rex

Sounds like a great plan!

So I was thinking if I just do personal income tax and maybe small business returns (thinking small for now), and I have professional liability insurance, then wouldnt that protect my personal assets? at least up to the insured amount? so if im insured for $1 million, then I would have to get a judgement against me of more than $1 million before they can sue for my personal assets?

Then is incorporating really necessary?

In addition to books, score.org is also a great resource. Its retired professionals who offer free small business and advice. I haven't used it much before, but I would love to talk to an old pro about this stuff.

[Anonymous]

@Shantik1

Do you find that most of your business comes from bookkeeping or tax services? Are the bookkeeping services recurring services, or more one-time set up or special projects?

[Shanti]

@Cal

I do mostly monthly bookkeeping, right now. So it's recurring. I find that a lot of clients have a mess as far as their QB goes and need a good clean up or start over completely. Knowing how the end product is going to be used and needs to be set up, makes you wonder how some other bookkeepers have been able to keep their clients!

The CPA I sub with has plans for me to be his per diem person during this tax season and mentioned 50-60 hours/week. So, I'm thinking my focus is going to change a bit in the coming months.

[Anonymous]

T-Rex, I hope you pass FAR and be done with it. Your marketing plan is very similar to what I did when I started out. One of the best networking groups I found was BNI groups. It's very structured and they are all small business owners helping each other by referrals. The more you are out there, the better it is. I have not done much marketing since I dedicated my time to study, but can't wait to get back into it. By the way, what type of attorneys were you thinking to target? I didn't approach any law firms, but might do so.

[Anonymous]

So for those of us in California, looks like you can't form an LLC if you offer professional services (like accounting).

This is from sos.ca.gov, Form LLC-1

A domestic or foreign LLC may not render professional services. (Corp. Code § 17375.) “Professional

services” are defined in California Corporations Code sections 13401(a) and 13401.3 as:

Any type of professional services that may be lawfully rendered only pursuant to a license,

certification, or registration authorized by the Business and Professions Code, the

Chiropractic Act, the Osteopathic Act or the Yacht and Ship Brokers Act.

If your business is required to be licensed, registered or certified, it is recommended that you contact the

appropriate licensing authority before filing with the SOS’s office in order to determine whether your services

are considered professional.

[Anonymous]

CalCPASoon, what if you are in California but incorporate in another state where accountants can form an LLC for their company.

[Anonymous]

Good question! I don't know, Im still researching and trying to figure it all out. I didn't even know that some states prohibit professional services from forming LLC's.

btw nolo.com is a pretty good site for legal research.

[T-rex]

Thanks for sharing tips and resources, everyone! Awesome!

@Shanti, Thank you and good luck with your business!

@CalSoon, I think you should be fine in CA as a sole proprietorship with professional liability insurance. That's how the CPA I used to work for set things up, and it's the way many do things.

I'm originally from So. Cal. In CA, you can incorporate as a professional corporation or a professional limited liability corp (PLLC). My guess is that the difference pertains to how you would be taxed; i.e., as a corp or partnership. It looks like both could offer more personal protection than a sole-proprietorship, but I still think you'll be fine as a sole proprietor.

@CPAfornow,

Thank you! You might need to be licensed in whatever state you incorporate in, so you might want to look into that. I plan to target law firms that handle bankruptcy and divorce cases.

Boy, we really could use an attorney here! I'm hoping that my new books cover some of this stuff. I'll report back if they do.

AUD - 95, BEC - 85
REG - 85, Rawrrrrrr FAR - 88
Used Becker for all sections.
CA candidate not residing in CA

[Anonymous]

This is a great thread! So many good ideas.

I'm wondering what everyone's experiance has been with professional tax software? Lacerte and Drake seem to be the biggest names out there, and both offer unlimited or pay per return licenses. Since this year Im just trying to get my feet wet and do this as a side business, Im thinking the pay per return is my best bet and I would build the extra cost into my rate strucucture. The unlimited license seems like it would be best for more established practices with higher volumes. Enough to where the intial licensing fees and annual renewal fees would pay for itself over time.

Also, my hair stylist that Ive been going to for years actually approached me about doing her tax planning and preparation. She was mentioning that the CPA she had been using for years has grown so big that her account got passed off to another staff person, and she really didn't like having someone she didn't know looking at all her financials. It really brought to light the importance of that relationship, and the trust that goes along with someone opening up their personal financial information to you.

It also got me thinking that hair stylists (and other similiar professions), people selling at craft fairs, maybe even the other people I know who do computer repair on the side, all these people have self employment income but may not know how to account for their business income and expenses. They could be a target market because their returns wouldnt be overly complex, and they could probably use the expertise of a tax professional.

[Author]

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