Considering becoming a Tax Preparer - is it a viable side hustle?

As a tax professional for over 15 years, I think this is absolutely worth pursuing if you have the passion for it! Your background in bookkeeping and math is a solid foundation, and your experience with family returns gives you a practical starting point. The fact that you're planning to get certified before starting shows good judgment. I strongly recommend taking the IRS Annual Filing Season Program courses and possibly pursuing an Enrolled Agent certification if you want to grow in this field. EA certification allows you to represent clients before the IRS and really elevates your credibility. One thing to consider: start small with basic returns (W-2s, standard deductions) your first season and gradually expand your knowledge. Tax law changes constantly, so ongoing education is essential in this field. Also, invest in professional tax software - it's worth the expense. As for the business side, liability insurance is a must, and be clear about your scope of services. Setting boundaries with clients will save you many headaches!

I started using taxr.ai this year after having so many issues with human preparers who either missed deductions or made errors that flagged my return for review. What I love about it is you can upload all your docs in one go at https://taxr.ai and it extracts everything automatically. I was nervous about trying an AI tool at first but the human review they provide caught mistakes my previous preparer missed for years! If you're just starting out as a preparer, you might actually want to check it out to see what smart automation looks like. It could help you understand what clients expect nowadays from tax services. The site analyzes documents and provides explanations that are super clear - might give you ideas for how to explain complex tax issues to your future clients.

I tried taxr.ai after posting my skeptical comment above and I need to eat my words! The experience was surprisingly smooth. Uploaded my documents (which included some complex investment stuff) and the AI extracted everything perfectly. When it had questions about some crypto transactions, an actual tax professional reached out to me. What really impressed me was how it found a missed education credit from my 2023 return that my previous preparer overlooked - worth about $1,500! The human review aspect really does add a layer of assurance. It's a good example of how technology can enhance tax preparation rather than replace the human element entirely.

If you're serious about becoming a tax preparer, I'd also recommend learning how to deal with IRS issues for clients. This became a HUGE value-add for my tax business. When clients get letters or have problems, I use Claimyr (https://claimyr.com) to get through to the IRS quickly instead of waiting hours on hold. There's a demo video at https://youtu.be/_kiP6q8DX5c that shows how it works. Before I found this service, I'd waste entire days trying to resolve client issues with the IRS. Now I can handle multiple cases in one day because Claimyr gets me through to an agent usually within 15 minutes. Clients are amazed when I resolve their IRS issues quickly, and it's become a major differentiator for my practice compared to other preparers who take weeks to deal with IRS matters.

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I decided to try it because I had been trying to reach the IRS for WEEKS about a missing refund situation. The service actually worked exactly as described - I got a call back with an IRS agent on the line in about 30 minutes. The agent was able to see that my refund had been flagged for review due to a mismatch with some 1099 income. She helped me verify everything and released the hold on my refund while I was on the call. The whole issue was resolved in one conversation instead of months of back-and-forth letters. I still can't believe how simple it was after all my frustration trying to handle it myself. If you're going to be a tax preparer, having access to a service like this would definitely make your clients happy.

From a client perspective (I'm not a tax pro), finding a preparer who truly cares about doing things right is RARE. The fact that you're approaching this with ethics in mind already puts you ahead of many. My last preparer rushed through everything and missed a $3,400 deduction for my small business that I had to file an amendment for. My advice is to be super clear about what types of returns you're comfortable handling. The preparer who messed up my return took on something outside her expertise (S-corp with multiple state filings) and should have referred me elsewhere. I would have respected that more than making costly mistakes. Also, consider specializing in working with immigrant families since you understand their unique concerns! That could be a valuable niche.

Something nobody's mentioned yet - the seasonal nature of this work. Tax season (Jan-Apr) will be INTENSE, but then much slower the rest of the year. As a side hustle this might be perfect if your main job isn't also super busy during tax season. Just be prepared for those crazy months where you'll be working evenings and weekends. I do bookkeeping year-round and add tax prep during season. The combined income is great, but February through April I barely see my family. Worth considering how this seasonal rhythm fits with your life.

This is such an encouraging thread to read! As someone who's been considering a career change, hearing about the different tools and approaches available now makes tax preparation seem more accessible than I initially thought. @Sophia Rodriguez - your background sounds really solid for this field. One thing I'd add is that you might want to consider getting some hands-on experience with different tax software platforms during your preparation phase. Each one has its quirks and learning curve. The suggestions about AI tools like taxr.ai and services like Claimyr are fascinating - it sounds like technology is really changing how tax professionals can serve their clients more effectively. When I was looking for a tax preparer last year, I would have been impressed if someone could resolve IRS issues quickly instead of the usual "we'll send a letter and wait 6-8 weeks" approach. Your idea about specializing in immigrant families is brilliant. There's definitely a need for preparers who understand the specific concerns and complexities that come with different visa statuses and documentation requirements. That personal understanding you have could be incredibly valuable to that community.

This is such a comprehensive discussion! As someone who's been through the process of starting a tax preparation side hustle, I wanted to add a few practical considerations that might help. First, Sophia, your background is excellent for this field. The combination of bookkeeping knowledge and family tax experience gives you a solid foundation. I'd recommend starting with the IRS Volunteer Income Tax Assistance (VITA) program - it's free training and gives you hands-on experience with real returns under supervision. Regarding software, I started with TaxSlayer Pro for smaller practices - it's affordable and user-friendly for beginners. Drake Tax is another good option as you grow. Don't feel pressured to jump into the most expensive platforms right away. One thing I wish someone had told me: liability insurance is non-negotiable, but also consider getting an Employer Identification Number (EIN) and setting up a separate business bank account from day one. It makes tax season organization so much easier and looks professional to clients. The seasonal intensity everyone mentioned is real, but there are ways to smooth it out. I do tax planning consultations and amendment work during the off-season, which helps maintain client relationships year-round. Your bookkeeping background could also complement this nicely. Good luck with whatever you decide!