You must be an ERO – Electronic Return Originator, and in order to do this you must be registered with the IRS and request you’re EFIN (Electronic Filing Identification Number). This process is cost free but takes a long time to process, anywhere from 7 to 14 weeks. Because of the time involved you must apply for it immediately. The process includes finger prints in a format specified by the IRS and an FBI investigation procedure. Tax Processor Plus will provide support to you for this and will help you in the process.
You and each person that will be preparing taxes in your business must have a PTIN number (Preparer Tax Identification Number) that will require an IRS registration process and fee of $63, and also an examination to be taken in one of IRS approved providers with a cost of $116. Each year there is a renewal for the PTIN where you will pay $63 and complete 15 hours of continuing classes with an IRS Training Provider. Tax Processor Plus will train you for the exam and will also provide the necessary classes to simplify your IRS training requirements.
You need to decide on the software package and the training to use. There are numerous possibilities out there but just few will provide the support needed, especially during the critical peak of the tax season. Support is a factor to consider when deciding on the software; also what the training offers because it is crucial to the success of your venture. Tax Processor Plus utilizes a state of the art software program that will assist you with not only the tax preparation know-how but also with the office managing operation.
You will need to select a site, and hire staff for your office. Our business model targets the lower to middle income tax payer who wants, or needs, the cost of preparation to be taken out of the refund and who are willing to pay a premium for the service (we average around $325 per return on that taxpayer). As such, you need to identify prospective locations in areas where this target demographic lives. Your location should be a retail store-front, with lots of windows, clearly visible from the street with plenty of space for large signs or banners. It should not be located within an office building or on a second level. Ideally it should have ample parking (densely populated urban areas with high foot-traffic are an exception). The amount of preparers will be directly related to the amount of clients you expect to handle during the peak of the season, once the peak is over you will reduce the amount of preparers. The average amount of returns performed by a single preparer is 1 every 30 minutes; in a 10 hour day one person will be able to do at least 20 returns. Based on this standard and the amount of possible candidates you might have surrounding your office, you should be able to determine the amount of preparers you will need. Tax Processor Plus will also provide you with marketing analysis and territory tax data to evaluate your potential and strategy.
The equipment for your office will need to include these items: One main desk computer with enough capacity to become the server for your business and a good laser printer. Each preparer should have a workstation with a lower capacity desk computer (or laptop) and a desk. Depending on the volume of returns prepared during the day one printer may be sufficient, but you could have as many printers as you do preparers. Also it is imperative to have a high speed internet connection.
order to target the community in a very effective manner. This kind of business is more about location and marketing than it is about taxes. The software will do the taxes; however, you must do all that you can to drive traffic to your location(s) and that’s the key to success. You must know your community and it will help a lot to have an idea of how many returns have been filed in the past; this information will give you an idea how to attack the market. Tax Processor Plus will assign a Office Director to you that will help you, and walk you through the development of your strategy to penetrate the market in your area. Well, now that you have a pretty good idea of what takes to do this; the crucial question comes out: Do you want to take all the risk on yourself or do you want to reduce your risk by partnering with an already established and successful business? Partnering is by far the best way to start venturing in a type of business you do not know a lot about, but it could also be a challenge, there are many options in the market today; but just a few are really good and solid businesses.