Any tax preparers here? Or, managing side gigs, esp. in winter

NeilDH

Recycles dryer sheets
Joined
May 9, 2024
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Location
Schaumburg, IL
I did bookkeeping and taxes for a sole proprietor on the side for virtually all of my working years, and since FIREing, I've studied to get officially credentialed (AFSP) to prepare taxes. Now I'm ready to dabble this winter. "Dabble" being the operative word, because I'm fortunate enough not to need income (hopefully that lasts), so I can do this on my own terms. And my terms are, I don't want to commit to schedules, such as by working for H&R Block or an accountant, and I want to do the work as I please -- which is to say, as many hours as I wish on a given day (from zero to 10), and if DW and I want to pick up and go someplace sometime, we go.

I was ready to be an Intuit TurboTax Verified Pro, where I'd essentially become a franchisee of Intuit (yes, understanding they'd get a good cut), as a good way to get started, get the software and get some clients. But it turns out they won't offer that to Illinoisans (or to people in about 10 other states). So if I don't want to work for someone else, I'm starting my own business.

Anybody else doing this? I'm intimidated by the set-up required, including possibly establishing an LLC. The value of paying for the LLC and the software is also a question (gotta get the business to make it worth it). I have to keep reminding myself that I'm not in a hurry and I can do what I want.

Which is true about any side project I undertake. (I'm also building a website on bicycling.) I'm early in FIRE life, so I'm still trying to shake the workaholism. I like to do a little work, especially in the winter when the outdoors isn't always accommodating, but I really like not committing to anybody's schedule. A high-class problem, to be sure, but I find it still tricky to manage this.
 
It's a tough road. My brother had a tax business, as did my son-in-law. I did the winter thing in both of those businesses.

it's a long story...
 
If you're looking for something unscheduled, tax might not be the right area for you. It's got those pesky filing deadlines and you have to schedule meetings with your clients before you start their returns and after you finish them. Plus you'll have people who need to get back to you with more info before you can finish their returns; people who will have questions before or after they file; people who got a letter from the IRS about the return you prepared and need your help responding; etc. I think you'll find there are a lot of external forces controlling how much time you spend working during a tax season.
 
I concur with Cathy63. I dabbled in taxes a bit and it’s just not something you can dabble in. It’s a lot of work to keep current in the tax laws/changes. I know, you’ll just do simple returns. Sure, many of them are simple, but you’d be surprised how many have little nuances that you need to understand. Oh, you’ll rely on the software? First, you should essentially be able to do the taxes without the computer in order to know if it’s doing everything right. Second, you can’t just pick up Turbo Tax and use it. Even if you did, you can only e-file 5 returns. Professional tax software is not cheap.

I gave up doing them on the side and the last one I gave up was the wife of a long time family friend (who passed). There were royalty payments for a gas well and the brother didn’t think I did the return correctly. Of course he didn’t actually do the return and couldn’t answer any questions I had to clear the matter up. I’m pretty sure I did the return correctly but I wasn’t going to try to defend my work that I was doing gratis.

As for doing things on your own time - LOL. Once you accept an engagement to do a return, people expect them done quickly. When you get around to it won’t cut it.

Now add that if you make a mistake and they need to pay a penalty, who do you think is going to pay that? What if you didn’t actually make a mistake but they get audited? You did sign that return - right?

I could go on. I’m a CPA who worked mostly in a financial capacity but did my time at a CPA firm - trust me, it’s not an easy side gig, even with the background I had. Generally, I concluded that if I wanted to do gig work, I should have just kept my job. If you want to volunteer for something like VITA, that’s entirely different.
 
The volunteering route is excellent. I have done it the last three years, and I am looking forward to doing it again. I enjoy talking to the clients, and I can manage expectations of the coordinators so that I work as much or as little as I want, and I set the hours. In Canada, we can do it by phone, so I have total control. I have had several clients in shelters who need to get their returns done to qualify for social housing. I have helped many people who have just arrived in Canada file returns for the first time. Getting their returns done takes a huge weight off their shoulders, and they qualify for income assistance (like EITC in the U.S.)
 
I would echo some of Jerry and Cathy's views.. After starting my career in public accounting in tax, I managed to keep my hand in tax throughout.

One thing I have tried to do in retirement is help people with taxes, especially those dealing with life changes who may be in hardship. One lady allowed me to volunteer to do her taxes for free, and only later did I learn that her returns would report gross income approaching $500k. I ended up doing 8 returns for her and her kids, including state returns and barely got a thank you. But as far as the tax I did enjoy the work itself. And other gigs have worked out better, thankfully

I'm still committed to doing this as I felt I was right to offer and the issue more on her. But every issue Jerry and Cathy mentioned applies, as well as people dangerously confused about their tax situations and tax law in general.

But I would never do it except on a volunteer basis since I don't have interest in deadlines, like to travel in winter and and am not seeking pay.
 
I really appreciate these reality checks. A lot of this involves the general question many FIRErs face about doing a little work again, but how much exactly. I’m lucky to be in a position to be very fussy. So I’m heeding this advice and proceeding very cautiously. The volunteer route is appealing. I have the couple of “clients” that I’ve always had (I do get paid a little). Maybe I pick up a couple more, maybe I don’t, while I lean against starting a whole-hog business or even working PT for one of the chains. I have my AFSP credential and PTIN, and don’t mind keeping up on the code for yucks.
 
Another concern I would have about getting paid to do returns is the need for errors and omissions insurance. I have no idea what it costs or how hard it is to get, but it's just one more thing to think through. Doing taxes as a volunteer for AARP Tax-Aide means I'm covered by the Volunteer Protection Act.

Volunteer work is on a schedule too, since we have to tell people when we're going to be open and we depend on other facilities' hours (libraries close on Fed holidays, Salvation Army closes on Good Friday). We are pretty flexible though, especially for walk-in sites. We setup a sign-in sheet for that day and the number of slots depends on the number of preparers who are working, so if someone's on vacation, we just do fewer returns that day.
 
That’s great intel. I had been intimidated about starting my own business, and I knew there were reasons for that, the possible need for insurance being yet another one of them.
 
generally, I find working for HR block pretty flexible, at least where I am. if i want off i tell them. Obviously, you have a schedule and appointments, but if I say I am out of town on these dates, they deal with it. pay is pretty low to start thou.
 
generally, I find working for HR block pretty flexible, at least where I am. if i want off i tell them. Obviously, you have a schedule and appointments, but if I say I am out of town on these dates, they deal with it. pay is pretty low to start thou.
Just completely me being curious, what is typical starting pay? How about once you have experience?
 
When I retired and had thoughts of doing some side work, the voice in my head kept saying “if you wanted to make more money, you should have just worked longer.” Which made me realize, it would only make sense if it was something I really loved, like a hobby job or volunteer work. It doesn’t make sense that I would do it for the money.
 
I have done VITA tax volunteering for 7 years but I am taking
a break this year. The local Vita(AARP) tax group does not really allow much time in front of the tax payer and after doing the taxes, someone else explains the return. It has lost much of the personal touch and enjoyment for me.
 
I did the volunteer thing with AARP tax preparers for a year. Simple returns so it wasn't a challenge. No need for insurance. But the manager of the volunteers was a pill, so I bowed out the next year. Now I do some VERY part-time business consulting with a non-profit for $. It's not a lot of time or earnings, but it keeps my head in the game and engaged with younger people and generous colleagues. I had to form an LLC to work with the non-profit to protect them on Wage and Hour laws. It was only a minor headache here in Vermont.
 
I concur with Cathy63. I dabbled in taxes a bit and it’s just not something you can dabble in. It’s a lot of work to keep current in the tax laws/changes. I know, you’ll just do simple returns. Sure, many of them are simple, but you’d be surprised how many have little nuances that you need to understand. Oh, you’ll rely on the software? First, you should essentially be able to do the taxes without the computer in order to know if it’s doing everything right. Second, you can’t just pick up Turbo Tax and use it. Even if you did, you can only e-file 5 returns. Professional tax software is not cheap.

I gave up doing them on the side and the last one I gave up was the wife of a long time family friend (who passed). There were royalty payments for a gas well and the brother didn’t think I did the return correctly. Of course he didn’t actually do the return and couldn’t answer any questions I had to clear the matter up. I’m pretty sure I did the return correctly but I wasn’t going to try to defend my work that I was doing gratis.

As for doing things on your own time - LOL. Once you accept an engagement to do a return, people expect them done quickly. When you get around to it won’t cut it.

Now add that if you make a mistake and they need to pay a penalty, who do you think is going to pay that? What if you didn’t actually make a mistake but they get audited? You did sign that return - right?

I could go on. I’m a CPA who worked mostly in a financial capacity but did my time at a CPA firm - trust me, it’s not an easy side gig, even with the background I had. Generally, I concluded that if I wanted to do gig work, I should have just kept my job. If you want to volunteer for something like VITA, that’s entirely different.
 
Agreed . Tax isn’t something to “ dabble in”. I am a CPA too. Moved away from full time work a few yrs ago. At this point I have around 40 of my own clients and work 8 weeks with a firm. Anytime you are responsible for the financial lives of other people, it’s gets involved. Even the simple stuff. And if you want to be a viable asset to your client, it’s an all yr gig. Lotsa questions, complaints, compliance, deadlines, keeping up with tax law. I am even stressing now that I make sure everyone has paid enough in estimated taxes for Jan 15 4th quarter deadline.
Client procurement and retention can be a PIA.
It is a great “ side gig” if you're comfortable with all the above.
As long as brain still works, I make our vacation money plus some fun money .
 
Concur with all other CPAs who posted. It can be LOTS of work.
I have done tax work "on the side" for over 20 years. The follow up questions and issues are WAY more work than the original tax prep. I have gradually deleted clients and am not taking on any new ones. Mostly family + a few widows. Old friends now.
 
That’s great intel. I had been intimidated about starting my own business, and I knew there were reasons for that, the possible need for insurance being yet another one of them.
Side not re: tax software. For my own clients, I use Drake tax software. U can purchase 10 individual tax returns for around $350 with unlimited states. Each additional return is around $35. Entities are around $50 each. A bit more stodgy than the expense professional software but I have been using it for 10 yrs plus. You would need a PTIN number and EFIN for efiling. It has been a cost effective way to keep a lid on what I charge.
 
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