Professional Tax Software
The best strategy with tax software is to pick good quality software and stick to it. Switching (upgrading) is a pain because you'll have to export all your clients' data from the old software and import it into the new software. Data is always lost somewhere in the process. This can cause embarrassing errors, but would not be a big factor with simple returns.I use ProSeries, from Intuit (the same company that makes TurboTax and Quickbooks). Other top-rated professional tax software packages are:
- ProSystems fx from CCH
- Taxwise and ATX, also from CCH
- Tax Act
- Drake Software
- GoSystems from Thomson Reuters
- UltraTax CS, also from Thomson Reuters
Windows-Based Computer
Professional tax software is written for Microsoft Windows operating systems. Yes, you could probably use it on a Mac with an Intel chip running Windows, but why screw up your Mac with Windows? You don't need a super computer, but get a decent one because you'll find yourself doing tax research on the web, watching tutorial videos, and you'll most likely be multi-tasking with several programs open at once. I often have Proseries open along with Excel and Word and a DVD-based tax reference and an internet browser window with 20-30 tabs open at the same time.Lots of tax preparers like laptops. I used laptops for tax prep work for about 10 years. Now I've switched back to a desktop. Why? With a desktop you get a lot more computing and graphics power for a lot less money. Also, I really don't care to take all my client tax files with me when I travel. It's a security risk. Laptops also tend to get bloated and slow down a lot more easily than a good desktop. I like a powerful desktop with a large display.
Absolutely pay for an extended service contract/warranty on your computers, scanners, and printers. You are stupid if you do not. I learned the hard way. Yes, I was stupid.
Productivity Software
I recommend that you purchase Microsoft Office (not the home version). You'll need Excel and Word. They are the industry standard and most all of your clients will have them and will send you files in those formats. If you are really short on cash, you can use Open Office for a while. It works fine. I used it for five or six years before I got MS Office.You'll also need a good PDF file editor. I recommend PDFill. It's cheap and has all the basic functions you'll need. It comes in several pieces of software. One is free, the other is about $20. This suite will allow you to merge PDF files, delete pages, reorder pages and make limited edits to a PDF file. For instance, if I have to file a 2014 tax form, but the 2014 software is not available yet, I can use 2013 forms and use the PDFill Editor to change the date on the forms. Unless there was a significant change to the form, the IRS won't know the difference.
You'll need the capability of sending and receiving faxes, particularly if you are communicating with the IRS. They don't use email. I use E-fax. Yes, it's too expensive, but it works. The IRS uses it too.
Tax Research Subscription - you won't need this if you are just starting out. Heck, you don't even know how to do tax research yet! Get a copy of "The Tax Book" or of "J.K. Lasser's Your Income Tax" Professional Version."
Don't go crazy spending a lot of money on software. Just get what you absolutely need.
Laser Printer
Printing tax forms requires a laser printer. Fortunately you can get a pretty good laser printer for about $150. I had a $750 HP Laserjet 2300DW that lasted me 10 years. They don't make them to last that long anymore, sadly. I recently replaced it with a $140 Brother HL-2280DW laser printer that also has a copier and scanner (but no document feeder). I am quite happy with it. You don't have to spend a ton of money.Some CPA's are no longer providing their clients with paper copies of their return. They email a password protected PDF instead. This cuts down on printing costs and storage costs. I still prefer to print a paper copy of the return for review before filing it with the IRS. Reviewing a return on-screen just doesn't cut it for me. I'm less likely to catch a mistake or omission.
Document Scanner
As I mentioned above, my laser printer has a copier and scanner function. They are adequate, although they do not have a document feeder for scanning or copying multiple pages at once and they won't scan or copy legal size documents. My next purchase will be a Fujitsu ScanSnap as I make a move to a more paperless office.Without a doubt, the best document scanner on the market is a Fujitsu ScanSnap. You can get one for less than $300. It comes with the professional version of Adobe Acrobat. That's a great deal. Get it if you can afford it. It scans multiple documents, both sides of the document, very quickly.
Business Cards
Vistaprint has great deals on business cards. Use one of their templates and keep it simple. Zazzle has better business card templates, but they charge more. Start out with 250 cards.Website
You should get a website as soon as you can. Keep it simple. Use it as an online brochure. I recommend that you use Weebly.com. If you want to have someone else build you a website, do NOT, I repeat DO NOT pay any more than $500 (unless you have plenty of startup cash). You don't need an expensive website to start out. You can use Google's Blogger for free and it makes a fine website. I started this website for free.Even if you don't get a website right away, I recommend that you reserve your domain name if it is available. Let's say your name is Henry Bigspender. You should probably register the following domain names:
www.henrybigspender.com
www.henrybigspender.net
www.henrybigspender.biz
www.henrybigspender.us
If you are an Enrolled agent, then you should also register:
www.henrybigspenderEA.com
www.henrybigspenderEA.net
etc.
By registering all those domain names, it prevents someone else from taking them if they haven't already done so.
Office Supplies
Fancy folders for delivering tax returns - you don't need these. If you provide paper copies of returns, use the cheapest folders you can get from the Dollar Store or Walmart. Use laser-printed file labels on the cover with the client's name and the tax year. Once you have an established base of clients and are making your estimated tax payments on time to the IRS each quarter, then spring for nicer folders if you must. If a client complains, tell them your low fee is based on your cheap folders.Fancy stationery - no way. Open up Microsoft Word, create a document and save it as "tax-prep-letterhead.docx". Put your name and address and phone number in a header. Put any other info--such as a tag line--in a footer. That's your letterhead. It's worked for me for ten years. Use regular #10 security envelopes for mailing. Hand address them. Use the cheapest paper you can unless you are dealing with very high-end clients, which you should not be if you are just starting out.
"Sign Here tags" - these are expensive, but keep your clients from getting confused. You'll need them if you are mailing documents to your clients to sign. Depending on your business model, you may not need them.
