Who Is Your Ideal Tax Client?

Tax business owners who are just starting out often get fatigued when it comes to acquiring new clients. When asked who their ideal client is, the answer tends to be “everyone!” While it’s true that everyone has to pay taxes, casting that wide of a net is not the best practice. Here are some guidelines to follow that I’ve learned from my 30+ years as a tax business owner.

Reach out to Family and Friends

If you’ve just opened your business, start with people you know. Announce it on Facebook and LinkedIn, and reach out to family and friends who may need your services and feel comfortable going to someone they know. From there, ask for referrals. This is always the first place we suggest you start.

Target Businesses 

While it’s great to offer tax services to the general public, it may be more profitable to gain business clients with more complicated returns. Target small business that are profitable (so they will be able to pay you), but not large enough to employ their own bookkeeper.  The type of business doesn’t matter much, but a sole practitioner (with no employees) might not have enough complexities to justify hiring you.  However, almost all small businesses will need tax preparation services even if they don’t need bookkeeping help.   

Look Our for These Industries

If you want to get more specific, the following industries generally have 1 to 10 employees and do not have a in-house professional bookkeeper.

• Restaurants
• Contractors
• Professionals
• Fully funded startups

Offer More Than Tax Preparation

Providing accounting services (bookkeeping and payroll) is also a great way to provide value and gain year-round income. You should be Proficient in Quickbooks since it is the standard used by most small businesses, and, ideally, you should become a Quickbooks Certified ProAdvisor. Being a one-stop shop for tax preparation, bookkeeping and payroll services, will ensure that your clients stick with you – and not leave you for a competitor that offers a service that you do not.

Consider Specializing 

As you learn and develop your skills, consider specializing in a specific area of tax law. Finding a niche market like retiree taxes, hospitality, military, C-Corp, returns for low-income taxpayers, or returns for resident aliens and then focusing your marketing efforts there, can help growth tremendously. Rather than marketing to a wide audience, focus on one specific niche and push for referrals. Learn more about that here.

Learning tax preparation is one thing. Navigating the ins and outs of being a business owner is another. If you’re looking for more guidance on building your tax practice, check out my new book, Guide to Start and Grow Your Successful Tax Business. It was recently named a 2018 Top New Product by Accounting Today.

source https://www.theincometaxschool.com/blog/ideal-tax-client/

Marriage penalties & bonuses remain under new tax laws

Latest tax scam twist: crooks deposit fraudulent refunds into real taxpayers' bank accounts

IRS fiscal 2019 budget proposal substantially the same, both in dollars and recommended tax priorities

Tax system now 3 pages more complex; yet more will claim standard deduction

Annually, the Joint Committee on Taxation releases a report entitled - "Overview Of The Federal Tax System As In Effect For [current tax year]." The report for 2018 (JCX-3-18) was released February 7, 2018 and is 38 pages long. The last report for 2017 (JCX-17-17; 3/15/17) was only 35 pages long! And the 2018 report was issued two days before more tax legislation was enacted that mostly affects 2017 - the Bipartisan Budget Act of 2018 (H.R. 1892; P.L. 115-123 (2/9/18)). This new legislation mostly is the concurrent budget resolution but also extends 33 tax items that expired at 12/31/16, mostly through 12/31/17 (retroactively that is!). These expiring provisions are generally not covered in these 30+-page overview reports by JCT. P.L. 115-123 also includes some disaster relief tax provisions and several miscellaneous items such as regarding whistleblower awards and the user fee for installment agreements to pay taxes.

Why is the 2018 report longer? It appears to be due to brief descriptions of new items added by the Tax Cuts and Jobs Act P.L. 115-97; 12/22/17) such as half a page for new Section 199A on the qualified business income deduction that is a 7-page long, temporary provision in the law, plus a few more data tables. These overview reports include interesting data and graphs, such as on sources of revenue, the make-up of income reported by individuals, and distribution of income and taxes.

A few interesting items from the reports:

• Projected for 2018, 1% of individual filers have income over $500,000. For this purpose, AGI is increased by tax-exempt interest, employer contributions for health insurance, employer share of FICA tax, worker's comp, nontaxable Social Security benefits, AMT preference items, Section 911 foreign earned income exclusion and a few other items.

• For 2017, JCT estimates that 31.7% of individual filers will itemize deductions rather than claim the standard deduction. For 2018, their estimate is that 13.1% will itemize.  This is a significant drop due to the increase in the standard deduction by the TCJA as well as removal of several itemized deductions.

What do you think?



source http://21stcenturytaxation.blogspot.com/2018/02/tax-system-now-3-pages-more-complex-yet.html

IRS criminal agents had another good year

IRS cops going after tax evading cryptocurrency accounts