[Anonymous]

I recently completed my CPA and received my license. This is also my first tax season. I will have completed 100-125 basic-intermediate individual returns this season.

Is it too early to think about venturing out on my own? There is a small practice that just has 99% individual returns available in my local area that is for sale. Is it worth considering buying the practice prior to next tax season? I would of course meet with the seller and grill them tremendously to make sure the client base was not outside my capabilities.

I have always been eager to work for myself, and would prefer to focus on tax work with maybe some small amount of bookkeeping throughout the year. I have worked on audits one of which I did 75% of the work. Not quite my cup of tea. I enjoyed it, but I like tax work a bit more.

I need thoughts, opinions, etc.!!!

[EuroAddict]

Good points by Lilla.

-----------------------------
BEC - 77, 03/2015 (first try)
FAR - 79, 05/2015 (second try)
REG - 83, 12/2015 (first try)
AUD - 84, 03/2015 (first try)

I got 99 problems but the CPA ain't one.

[Anonymous]

last month I quit my job, and started my own practice! It is sooo scary and getting clients is not as easy as we all think but it's all about taking risks! I am networking my butt off and I know that it will pay off and this is what Ive always wanted to do!

I am 28 and have only 3 years under my belt. I am very fortunate because I have an established CPA partner who is willing to assist me if I have tough questions! Which is huge, since I don't know everything. I also have all the financial support from my husband. The way I look at it is: if you don't do it someone else is.. as long as you have your ducks in a row and have the drive you will be fine!

Life is all about taking risks!

[FIFOisbetterthanLIFO]

To be honest, I'd never consider doing my taxes with someone who had one year of experience. I think that would make a lot of people uncomfortable.

Not to mention with all the tax software out there, simple 1040 returns can be done on Turbo Tax or something like that for minimal cost. I would never pay a one year CPA any amount of money to process my 1040 and schedule A.

FAR - Passed (82)
BEC - Passed (76)
AUD - Passed (89)
REG - Passed! (81)
AICPA Ethics

Licensed CPA

[Anonymous]

@Lilla – Thanks for laying it out.

@FIFOisbetterthanLIFO – That makes sense, but is also a bit naive. One year of being a CPA is not one year of being familiar with accounting, tax code, etc. I have obviously met the education requirement, actually earned my IRS Enrolled Agent license while studying for the CPA exam (because why not), and have my CPA which we all know requires a bit of work in itself. Of course we would all want the most seasoned CPA out there to do our taxes, but you pay more, and they tend to already have a nearly close to full book of business.

I have prepared about 150 returns this season and have not worked much more than 40 hours a week. Sure my returns have not been overly difficult i.e. W-2, Clergy, 1099-DIV, 1099-B, K-1s, etc. Also various adjustments, credits, etc.

Originally I had notes from my reviewers but they were 99% about using the software, not actual tax code. I usually have maybe 1 question every 2 weeks, and I have not had reviewer notes in almost 2 months.

Like I said, that is with only moderately difficult returns, and obviously I would want to gauge the difficulty of the returns in the practice as well as am fully aware that they would want to be comfortable with selling as well. The practice has one employee right now and is primarily used for data entry, office type work.

[mhueycpa]

EagerCPA may I inquire as to where you are located? Also, how did you find the local business for sale? I'm currently looking to purchase practices with the NY,NJ,CT region, and also looking in MI, I am currently looking at accountingpracticesales.com for practices for sale, but they really don't have any new listings. Any other places to look for practices for sale?

As to your original question, I feel like people that are responding are under the assumption that just because a taxpayer comes to you to prepare a return that you are required to prepare it. If you are smart enough to take on the kind of returns you are used to doing then why not go for it? Whereas if a client were to come with such a complicated return you can turn them away, yea your losing potential income, but the possible liabilities associated with inaccurate returns as well as potential negative word of mouth isn't worth it. I've been in public accounting for 8years now and will soon receive my CPA license. I took am looking to start my own practice. That being said if a client asks How many years have you been licensed, I will tell them 1year, however, I have 8years of fulltime experience prepping a wide variety of returns (simple W-2 to 1 client who files in almost every state due to investments that produce k-1s). So I say go for it, just know your limits.

THE 300 CLUB WILL DO JUST FINE!

[makiu]

@EagerCPA :
With some research, I would analyze the transaction and will make an offer. I said go for it!!
Worst case scenario: all clients may sue at once and you loose all the money, and at least you try!!!

I agree with some previous poster: DO not let the emotions influence your decision. Please see below my suggestions. I was a real estate broker for a long period of time and here and my .02 cents

Things to consider
1) why is he/she selling; how long has he or she been in the market
2) does he has any relative doing taxes; if so … Red flag …clients may go to them…..
3) agreement not to compete must be in place
4) research the PTIN with the IRS to find out percentage of accepted vs rejected return.
5) you can use leverage from him; installment sale transaction , let's said 3 years.
6) you must have an agreement to discount any client that leaves the company
7) you state that 99% are individuals return, and I agree with @EuroAddict … his charging a TON of money or this is a high Net Worth area. Where is the practice.
8) based on average Net Income of $140,000, chances are that he has between 700 and 900 clients.
9) what is your location. Does he has state tax return as well.
10) I'm in the DMV area and I love it. there is tax everywhere, Virginia, DC, MD, International tax,

Finally, please put a team of handy advisors to help you with your business venture. Attorneys, Financial planners, bankers, insurance agents, etc. the sky is the limit.
Wish you good luck and again GO FOR IT!!

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty”
by Winston Churchill

[Author]

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