Author Topic: Potential side hustle - seasonal tax preparation  (Read 8929 times)

mousebandit

  • Bristles
  • ***
  • Posts: 316
Potential side hustle - seasonal tax preparation
« on: May 13, 2016, 09:38:06 PM »
Anyone do this?  What are the various avenues to do it?  I know that I can take a course at my local H&R Block and get hired by them as a seasonal employee, and make a little over minimum wage, with high likelihood of lots of overtime. 

What are the other options?  In the past, I have done taxes for others on a very loose basis - I didn't sign them as a preparer or anything.  I just plugged into Turbo Tax on my end, looked things up in IRS publications as needed, and gave the filled-in forms back to the guys to sign and mail in themselves.  That was extremely lucrative, but I got worried about the liability, and then I had a stroke, which obliterated my math skills for a few years, LOL.  (I'm fully restored to excellent health, and back to my previous capabilities!)

What state and federal licensing requirements are there to hanging your shingle out as a tax preparer?  (I'm in Oregon.) 

If I'm going to go this route, I'd like to get on track to make it as lucrative as possible, which would probably be to do it on my own, especially since the H&R Block avenue would only be a seasonal job anyways.

THANKS!

MouseBandit


retiringearly

  • Bristles
  • ***
  • Posts: 363
Re: Potential side hustle - seasonal tax preparation
« Reply #1 on: May 14, 2016, 01:23:19 PM »
This is something I am very interested in as a gig for retirement

kpd905

  • Handlebar Stache
  • *****
  • Posts: 2029
Re: Potential side hustle - seasonal tax preparation
« Reply #2 on: May 14, 2016, 05:08:44 PM »

mhlavac

  • 5 O'Clock Shadow
  • *
  • Posts: 7
Re: Potential side hustle - seasonal tax preparation
« Reply #3 on: May 14, 2016, 09:41:07 PM »
My wife works seasonally at H&R Blocks and for the most part, likes it.  In order to make it really worthwhile, you'll want to certify up so that you get more pay per return that you complete.  Your first year, you won't make much, but as you get more returning clients and certify up, $10k is possible depending on the office that you're in.  Block also offers 10-month employment for seasoned tax pros in metro areas in some of their larger offices to support audits, IRS letters, late filers, trusts, businesses, etc.

When I finally decide to jump ship from my IT job, I might do something similar.

MDM

  • Senior Mustachian
  • ********
  • Posts: 11477
Re: Potential side hustle - seasonal tax preparation
« Reply #4 on: May 14, 2016, 09:53:05 PM »
For anyone interested in doing this on a volunteer basis, see http://www.aarp.org/money/taxes/info-2004/about_aarp_taxaide.html.

retiringearly

  • Bristles
  • ***
  • Posts: 363
Re: Potential side hustle - seasonal tax preparation
« Reply #5 on: May 16, 2016, 06:21:04 PM »
My wife works seasonally at H&R Blocks and for the most part, likes it.  In order to make it really worthwhile, you'll want to certify up so that you get more pay per return that you complete.  Your first year, you won't make much, but as you get more returning clients and certify up, $10k is possible depending on the office that you're in.  Block also offers 10-month employment for seasoned tax pros in metro areas in some of their larger offices to support audits, IRS letters, late filers, trusts, businesses, etc.

When I finally decide to jump ship from my IT job, I might do something similar.
What does "certifying" entail?
Thanks

mhlavac

  • 5 O'Clock Shadow
  • *
  • Posts: 7
Re: Potential side hustle - seasonal tax preparation
« Reply #6 on: May 16, 2016, 11:02:12 PM »
Certifying up involves taking a series of classes and taking tests to show that you have mastered that knowledge.  Block puts on incremental classes, but you can also enroll in outside classes, through training companies like Gleim, and take the IRS certification exams (theres 3) that automatically count towards Block certification.  My wife studied one full offseason fairly diligently and was able to take and pass all 3 exams and achieve "Enrolled Agent" standing, the equivalent of a CPA.

slappy

  • Handlebar Stache
  • *****
  • Posts: 1453
Re: Potential side hustle - seasonal tax preparation
« Reply #7 on: May 17, 2016, 06:13:05 AM »
I would love to do this! I doubt my day job would allow it, but maybe as a transition to ER sometime in the future.

dkaid

  • 5 O'Clock Shadow
  • *
  • Posts: 84
Re: Potential side hustle - seasonal tax preparation
« Reply #8 on: May 17, 2016, 09:03:47 AM »

catccc

  • Handlebar Stache
  • *****
  • Posts: 1906
  • Location: SE PA
Re: Potential side hustle - seasonal tax preparation
« Reply #9 on: May 17, 2016, 09:49:06 AM »
Certifying up involves taking a series of classes and taking tests to show that you have mastered that knowledge.  Block puts on incremental classes, but you can also enroll in outside classes, through training companies like Gleim, and take the IRS certification exams (theres 3) that automatically count towards Block certification.  My wife studied one full offseason fairly diligently and was able to take and pass all 3 exams and achieve "Enrolled Agent" standing, the equivalent of a CPA.

I'm sorry, I have to say that an EA is not the equivalent of a CPA.  At all.  You don't need a 4-year degree to be an EA (you need 150 credit hours to be a CPA), pass rates for the SEE are something like 80% (v. less than 50% per section for the CPA, and only 30% for passing all 4 sections in the first sitting.)  No work experience requirement for the EA (depends on the state, but typically a year working with an active CPA are required for the CPA license.)  Not to mention that an EA is tax focused, while a CPA hits tax as well as many other areas of accounting/finance/business/legal.

Yes, I'm a CPA, and studying and passing that exam (all four parts the first time!) was really tough, so if someone says that the EA is the equivalent of a CPA, I just have to say "hell, no!"

At any rate, EA is a viable option to increase your potential to be successful in seasonal tax prep if it is something you want to do.
« Last Edit: May 17, 2016, 09:52:09 AM by catccc »

VaCPA

  • Bristles
  • ***
  • Posts: 270
Re: Potential side hustle - seasonal tax preparation
« Reply #10 on: May 17, 2016, 12:25:44 PM »
Certifying up involves taking a series of classes and taking tests to show that you have mastered that knowledge.  Block puts on incremental classes, but you can also enroll in outside classes, through training companies like Gleim, and take the IRS certification exams (theres 3) that automatically count towards Block certification.  My wife studied one full offseason fairly diligently and was able to take and pass all 3 exams and achieve "Enrolled Agent" standing, the equivalent of a CPA.

I'm sorry, I have to say that an EA is not the equivalent of a CPA.  At all.  You don't need a 4-year degree to be an EA (you need 150 credit hours to be a CPA), pass rates for the SEE are something like 80% (v. less than 50% per section for the CPA, and only 30% for passing all 4 sections in the first sitting.)  No work experience requirement for the EA (depends on the state, but typically a year working with an active CPA are required for the CPA license.)  Not to mention that an EA is tax focused, while a CPA hits tax as well as many other areas of accounting/finance/business/legal.

Yes, I'm a CPA, and studying and passing that exam (all four parts the first time!) was really tough, so if someone says that the EA is the equivalent of a CPA, I just have to say "hell, no!"

At any rate, EA is a viable option to increase your potential to be successful in seasonal tax prep if it is something you want to do.

He probably meant equivalent in terms of the ability to be a paid preparer of tax returns. It's definitely not the equivalent in stature as a CPA. But then again a CPA will charge far more than H&R Block.

jwright

  • Bristles
  • ***
  • Posts: 269
Re: Potential side hustle - seasonal tax preparation
« Reply #11 on: May 17, 2016, 01:07:46 PM »
Certifying up involves taking a series of classes and taking tests to show that you have mastered that knowledge.  Block puts on incremental classes, but you can also enroll in outside classes, through training companies like Gleim, and take the IRS certification exams (theres 3) that automatically count towards Block certification.  My wife studied one full offseason fairly diligently and was able to take and pass all 3 exams and achieve "Enrolled Agent" standing, the equivalent of a CPA.

I'm sorry, I have to say that an EA is not the equivalent of a CPA.  At all.  You don't need a 4-year degree to be an EA (you need 150 credit hours to be a CPA), pass rates for the SEE are something like 80% (v. less than 50% per section for the CPA, and only 30% for passing all 4 sections in the first sitting.)  No work experience requirement for the EA (depends on the state, but typically a year working with an active CPA are required for the CPA license.)  Not to mention that an EA is tax focused, while a CPA hits tax as well as many other areas of accounting/finance/business/legal.

Yes, I'm a CPA, and studying and passing that exam (all four parts the first time!) was really tough, so if someone says that the EA is the equivalent of a CPA, I just have to say "hell, no!"

At any rate, EA is a viable option to increase your potential to be successful in seasonal tax prep if it is something you want to do.

Ditto.  The EA route is significantly easier and less labor intensive; do that so you can get a PTIN and register with the IRS.

mousebandit

  • Bristles
  • ***
  • Posts: 316
Re: Potential side hustle - seasonal tax preparation
« Reply #12 on: May 17, 2016, 02:04:19 PM »
Thank you guys!  The EA is an option that I had figured might be available, but didn't know what it would be called or how to learn more about it.  I will be checking on that! 

MouseBandit

kpd905

  • Handlebar Stache
  • *****
  • Posts: 2029
Re: Potential side hustle - seasonal tax preparation
« Reply #13 on: May 17, 2016, 06:43:23 PM »
Does anyone have any numbers for what you get paid for this?  Including after all of the training?

jwright

  • Bristles
  • ***
  • Posts: 269
Re: Potential side hustle - seasonal tax preparation
« Reply #14 on: May 18, 2016, 07:57:57 AM »
Does anyone have any numbers for what you get paid for this?  Including after all of the training?

What do you get paid for tax preparation?  I charge $125/hour as a CPA.  I do try to employ a $300 minimum outside of close friends and family, so on some returns I am making a higher hourly rate.  I don't do it full time any more so I don't know how it works out over the course of the year.  In my area first year associates are making around $50K with benefits with a 2200 hour expectation so that's only about $22/hour that they pocket, but you have the security of being an employee with growth potential. 

mousebandit

  • Bristles
  • ***
  • Posts: 316
Re: Potential side hustle - seasonal tax preparation
« Reply #15 on: May 18, 2016, 09:07:52 AM »
My buddy from high school owns the local H&R Block franchise in our town, and I am going to go in and talk to him about this and a few other tax issues.  I will update here with any firm details that he gives me.  Basically, I am trying to decide whether to do the simple H&R Block course they offer this summer, and work as employee next year, or to do the EA and do taxes on my own (or do like I used to, and simply "help" friends prepare, and give them their own paperwork to sign and send in, with no credentials).  It's also possible that my buddy would hire me seasonally with the EA credential for more pay.  So, I will ask him what he thinks, and update back here. 

Thanks, guys, for all the awesome ideas!

MouseBandit

zephyr911

  • Magnum Stache
  • ******
  • Posts: 3619
  • Age: 45
  • Location: Northern Alabama
  • I'm just happy to be here. \m/ ^_^ \m/
    • Pinhook Development LLC
Re: Potential side hustle - seasonal tax preparation
« Reply #16 on: May 18, 2016, 12:06:12 PM »
I did tax prep one season for money, with a very small company in Brooklyn, after being hired based on my three or four years of volunteer experience. I would not recommend trying to go in with 0 tax knowledge, get the quick cert and jump in headfirst, because you could make a mistake that causes someone real trouble. If you're pretty conversant with tax code and have done your own for years, you might be OK.

kpd905

  • Handlebar Stache
  • *****
  • Posts: 2029
Re: Potential side hustle - seasonal tax preparation
« Reply #17 on: May 18, 2016, 07:13:16 PM »
Does anyone have any numbers for what you get paid for this?  Including after all of the training?

What do you get paid for tax preparation?  I charge $125/hour as a CPA.  I do try to employ a $300 minimum outside of close friends and family, so on some returns I am making a higher hourly rate.  I don't do it full time any more so I don't know how it works out over the course of the year.  In my area first year associates are making around $50K with benefits with a 2200 hour expectation so that's only about $22/hour that they pocket, but you have the security of being an employee with growth potential.

I meant the people that just start at H&R Block and do their training, not a real CPA.

catccc

  • Handlebar Stache
  • *****
  • Posts: 1906
  • Location: SE PA
Re: Potential side hustle - seasonal tax preparation
« Reply #18 on: May 19, 2016, 10:19:24 AM »
This was many moons ago, but in college I worked for Jackson Hewitt.  It was 2001-2002 or so, and my pay was something like $7.50 hourly, plus we got an end of season bonus based on volume (dollars of revenue generated in return prep fees).  I would guess the bonus got me to something like $10/hour total.

It must be up from that, but a lot of the revenue these types of stores would get from Refund Anticipation Loans has dried up due to new laws.  I just did a quick google search and it looks like $9-$12 hourly at H&R Block.  At that rate, you might have more fun practicing latte art at your local coffee shop...

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1686
Re: Potential side hustle - seasonal tax preparation
« Reply #19 on: May 19, 2016, 01:36:56 PM »
I explored this as a side hustle the smart way:  Avoiding H&R Block and the like where they charge you for a training course, then might hire you for peanuts.

My thinking was I would learn the trade, then somehow open my own business where I was thinking I could earn at least $50 per hour (since on a salaried basis, the pay is peanuts, but fees for tax returns can be pretty nifty).

I opted to explore this for free by training to become a VITA tax preparer (Volunteer Income Tax Assistance).  While I enjoy doing my own taxes, I quickly realized that learning all the rules for ACA (Affordable Care Act), various filing statuses, various credits along with the rules, etc, etc, is NOT something that I want to spend my time doing.  I dropped out and will not return.  NOW i know...

mousebandit

  • Bristles
  • ***
  • Posts: 316
Re: Potential side hustle - seasonal tax preparation
« Reply #20 on: May 19, 2016, 03:08:40 PM »
I do anticipate that H&R Block will pay base-rate just above minimum wage.  My thinking on the benefits of this as a side-hustle, would be that there is a lot of overtime available, and it's a 4-month gig, with no damaged relationships or reputation from just keeping it to the tax season.  I am also hoping, from what I'm reading here and my google research, is that it will be possible to bump that base-pay amount up pretty easily with extra "certifications".  I am torn between whether I think it's a benefit to work as a W2 employee here (no records, very limited liability, no insurance and bond, etc.) vs on my own (higher pay, more room for overall personal/business tax advantages, more time flexibility). 

For me, I do have quite a bit of tax prep background already, and have a pretty natural inclination that way.  My buddy has been encouraging me to get into tax prep for him since I was first out of college, LOL.  The learning curve probably won't be incredibly difficult or uninteresting for me, so that's not a big turnoff. 

MouseBandit