Pros:
1. Low startup cost: Setting up shop as a tax preparer requires minimal upfront investment, with software programs like TurboTax running on a laptop or desktop computer and printer being the only required equipment in most cases.
2. Flexible work hours: Tax preparation is a seasonal business, and you can pick the hours that are most convenient for you.
3. Access to tax law information: With access to updated tax law information, you will be able to give your clients more accurate advice on filing strategies and ways to minimize their tax burden.
4. Increased potential for income: As you gain experience and expertise in the field of tax preparation, you can command higher fees for your services, as well as offer additional services such as financial advice and investment planning.
Cons:
1. Seasonal business: Tax season is a very busy time, but there will be a significant slowdown in your client base during the rest of the year.
2. Strict regulations: Tax preparers are subject to laws and rules imposed by the IRS, and it pays to be knowledgeable about them in order to avoid costly fines.
3. Limited scope of services: As a tax preparer, you won’t have access to the same wide range of services that accountants may offer, such as audit services or financial advice.
4. Stiff competition: With the advent of online tax filing and free software programs, there is a lot of competition in the tax preparation industry. You will need to be knowledgeable and efficient in order to win clients.