[Anonymous]

Hey all,

I am starting to research the possibility of opening my own tax practice (really just doing returns myself than anything) to run as a second source of income to my full time job. I was hoping to get some input into the details of running a small business on the side. It’s my hope to test out this side business with my wife (she isn’t a CPA/EA/anything else but is familiar with tax and will soon be able to stay home full-time when our 1st child comes…a big reason why I want to supplement the family income with a side job). I’m not trying to move quickly. I have been preparing returns free of charge for family the past 3-4 years and thought this 2014 tax season could be the first I branch out and take on paying clients.

From the quick research I have gathered so far, these should be my first steps.

Obtain a PTIN and the ability to file electronically

Register a company with the Secretary of State

Get tax prep software and printer

Set up a home office space

Marketing

1. Obtaining a PTIN and E-file ability should be easy enough

2. Registering a company with the State should be no problem but I don’t know what type of business is best. I’d lean towards an LLC at first thought to protect personal assets, but is an LLC enough? I may do as few as only 10-20 returns if I simply don’t get the customers the first year (I would say I would max out at 50 returns if things went well). Is this even this few of returns enough to warrant buying Errors and Omissions insurance? I have no idea the best way to protect myself while working at such a small level

3. I have the printer, but do I really need tax software for operating at a small level? I have used free interactive PDFs from the IRS for my own tax returns and family members tax returns. I feel like I could do without the software until I know this side business is a lasting one.

4. Home office space is already complete

5. I plan on marketing (not using the CPA initials because I heard that can get sticky) with business cards, local signs, friends/family word of mouth, Craigslist, social media, free internet advertising websites. Probably buy a dedicated “go-phone” for business calls only.

Is there anyone who can help me add somethings I will need to do to make sure I have a legit, protected side business? Any critiques or changes?

Like I said this is a starting out as a side job for me. Just a little extra money for my family and maybe the chance to own my own tax prep business one day, but right now I definitely cannot work under another CPA, buy a CPA firms/client list, or anything else like that.

Thanks for any advice and God bless,

CPArkansas