If you are an experienced tax professional and want to expand your business, consider running a tax service bureau. There’s plenty of demand for professional tax preparation services, and a tax service bureau may be an ideal and lucrative business path for you.
Starting a tax service bureau commonly requires strategic planning and preparation. Let’s discuss the steps needed to start your bureau, legal and licensing requirements, and tips to scale your business.
A tax service bureau provides tax-related services to individuals, businesses, and other tax professionals. The services include:
Tax service bureaus help tax preparers save time, work more efficiently, and scale.
A tax service bureau can help you secure new income sources, grow total revenue, and move away from a tax-season dependent business.
You can generate revenue by reselling tax software to other tax professionals. In some cases, you can use a white label strategy and use your company name and logo to sell software. Resellers can also charge fees for software support and training.
A tax service bureau can onboard additional tax preparers to meet customer demand during tax season. Add other business-related services, such as year-round payroll processing.
These changes shift the market’s perception of your brand. Your business can become a tax service bureau offering multiple services year-round, rather than simply a tax preparation firm.
Create a business plan, meet the regulatory requirements, and decide on staffing needs to start your tax service bureau.
You need a written, well-designed business plan to increase your chances of success. Your plan should include:
The business plan is the roadmap needed to scale your business.
You must comply with legal requirements and obtain the necessary licenses and permits before starting your tax service bureau. The licensing and permit requirements vary by state.
In general, you will need at least a business license and an Electronic Filing Identification Number (EFIN) from the IRS.
While the requirements depend on your location and the services that your business offers, regulations may include:
The tax software you choose impacts your ability to serve clients. The choice becomes even more important when you operate as a reseller.
To make an informed decision, make a list of the features that are most important to your firm. Sigma Tax Pro’s Comparison Chart provides several factors to consider:
Once you determine the features you need, speak with tax software providers.
A tax service bureau needs tax preparers, bookkeepers, CPAs, and payroll specialists. The number of staff and the mix of positions depend on your client base.
Junior-level tax preparers work on less complex returns, and senior-level tax professionals provide tax planning guidance and tax return preparation. Tax laws change constantly, and you need to provide consistent training to serve clients effectively.
Tax preparation firms are required to create a Written Information Security Plan (WISP) to protect client data. Here are some of the components of a security plan:
Security is needed for both office work and remote access. Software should be updated regularly, and your staff must be trained on client data management and security measures.
Tax preparers build trust with clients over time, and tax clients may be interested in other services. You can add value by providing bookkeeping, payroll, financial planning, and tax audit support.
If a tax client is unhappy with the current payroll provider, for example, they may respond to your marketing efforts and sign up for additional services. When you handle the tax return, you already have a base of knowledge about the client’s needs.
Offer more services and leverage your team with technology to get the most out of your business.
Provide an extensive range of services to attract a broader range of clients. If you handle an individual tax return for a client, ask them if they work with another tax firm for business returns, trust returns, etc. Consider adding services to attract more business from existing clients.
You can also launch a niche service, such as sales and use tax returns.
Technology allows you to save time, increase accuracy, and work more productively. Use the latest tax software and tools to streamline processes and improve efficiency.
Clients are price-sensitive, and you should research the prices offered by competitors. Tax clients may be willing to pay higher prices if they perceive that you provide more value and expertise.
Customers see tax preparation ads and promotions as the new year begins. Put seasonal tax promotions in place to drive repeat business. For example, some tax firms offer discounts for early submission of tax documents.
Launching a tax service bureau is a strategy to diversify your service offerings, strengthen relationships with current clients, and drive more total revenue. You become less dependent on seasonal tax preparation.
However, you must commit to hiring and training qualified professionals to provide new services. This means more time managing people and a larger investment in your business.
With proper planning, you can operate a successful tax service bureau.
Tax software sales can be an important revenue stream for your tax service bureau. Generate extra income for your business by becoming a reseller of Sigma Tax Pro software. Sigma offers full training, technical support, sales, and marketing to help you generate revenue.
