Income Tax Preparation

[wilkin]

How many of you do income tax preparation along with selling insurance products?

My main business is health insurance for under and over age 65 individuals and business groups of ten and under.

I'm thinking of adding income tax preparation for it's direct revenue as well as cross selling opportunities and I'm thinking of running it as a separate business entity.

Has anyone owned or worked for a Liberty Income Tax franchise or one of their competitors? What are your thoughts of starting from scratch versus buying a franchise?

-Bill

 

[GreenSky]

How many of you do income tax preparation along with selling insurance products?

7 of us.

Rick

 

[padthaiforlunch]

How many of you do income tax preparation along with selling insurance products?

My main business is health insurance for under and over age 65 individuals and business groups of ten and under.

I'm thinking of adding income tax preparation for it's direct revenue as well as cross selling opportunities and I'm thinking of running it as a separate business entity.

Has anyone owned or worked for a Liberty Income Tax franchise or one of their competitors? What are your thoughts of starting from scratch versus buying a franchise?

-Bill

How familiar are you with tax law and accounting? If you don't have a good handle on accounting, you better watch out if you plan on doing any business returns, including sked c. The irs can hold the preparer liable for "unreasonable" deductions on a return, unless you submit a statement with the return identifying what you belive to be unreasonable. Penalty - $10k per occurence.

I started my own tax business form scratch, but I have two mentors who have been in the business over 20 years. They are also a source of referrals. Insurance was my add-on.

It takes me until June to recover from tax season. Very intense time of year. If you do med supp, you will find tax season conflicting with open enrollment.

 

[djs]

I think tax prep and estate planning go hand in hand.
I think tax prep and financial planning have some coorelation.
I think accounting and business insurance go hand in hand.

Tax prep and auto insurance is oil and water.
Tax prep and health insurance have little relationship.

Doesn't mean you don't get some benefit of cross marketing, but the synergy isn't there the way you want it to be.

In my office, we have a tax preparer, an estate attorney, a realtor, a mortgage broker, and the worlds greatest P&C agent. Totally unrelated businesses, but yet related in many ways. It works well for many of the clients, though they all realize we are separate (actually separate offices inside the same building).

Dan

 

[wilkin]

I would say I have a better than average knowlege of the most common tax prep situations. Tax preparation does not scare me at all like it does most people. It has always amazed me how many people pay way too much for simple tax returns.

Several years ago I took the H&R Block course and did taxes for them for a season. What a rip off they are for the consumer. However, I would not do the tax prep myself but would have a partner or more likely employee(s) who are experienced and trained doing the work.

I would not be taking complex cases away from CPAs - that would not be my market. If a complex case came in the door I would turn it down or refer it out.

I would look to expand my insurance business into cross selling annuities when the appropriate opportunities arise.

 

[MichaelJM]

Unless you are licensed for securities, AND have a degree in accounting or tax law...I recommend you steer completely away from offering tax advice to clients. Period.

One mistake on that and it can cost your entire business.

 

[padthaiforlunch]

If you decide to do taxes, you will need to offer e-filing. Submit your fingerprints to the irs and be liable for your employees, or pay another tax preparer to e-file for you. I don't agree that you need to be securities licensed to prepare tax. You will want to create a separate business and try to build a wall between them, but this is near impossible to do if you are making annuity recommendations bsaed upon the return.

The only way I would sub out the work to an employee is if I was personally reviewing the return and the client docs. Kinda dicey.

HR Block training may give you some basics, but you will need to create your own library and be prepared to spend $$$ on software each year. If this is truely something you want to do, pm me and I can walk you through what you need to buy.

As for complex cases, you would be surprised how complex some personal returns can be. Many small business people out there - some llc, others s-corp. Are you prepared to advise them on which corp structure is best for them and do a compare and contrast? Business owners expect their tax preparer to advise them beyond retirement planning. What about RAL's? Do you really want to deal with a bunch of low-rent mf's that are trying to scam eic tax credits? Are you prepared to walk your clients through an audit?

Tread carefully.

In my office, we have a tax preparer, an estate attorney, a realtor, a mortgage broker, and the worlds greatest P&C agent.

Anyone we know?

 

[wilkin]

padthaiforlunch, thank you for your insight and suggestions. Is your business more taxes or insurance? What type of insurance do you sell?

Thanks

 

[padthaiforlunch]

Tax has been my mainstay, but I'm looking to change that. I have been cross-selling di, health, annuities and a little life to existing clients.

I also cross-sell the tax service to my insurance clients. My insurance marketing has mostly been b2b. I was leading with di, but now am focusing more on annuities.

Lately I have been looking at the individual market and retirement planning.

I was able to grow my tax business without cold-calling, just low-cost, guerilla marketing. Insurance marketing is certainly more challenging.

 

[thewold]

I was looking at doing the tax preperation thing as well but I just got an email from USA Tax and Insurance Services www.usataxadvisorsinc.com and was wondering if anyone knew anything about them. It looks kinda like an EJ opportunity where they set you up with an office in an exclusive territory. Don't know if you have to build up to a certain point or not before they do this. Has anyone seen this around where you work or live?