Just got my AFSP record of completion and want to start my own tax practice - where do I begin?

Congrats on completing your AFSP! Starting your own practice is exciting but definitely requires some planning. Here's what you'll need to get started: First, get your PTIN (Preparer Tax Identification Number) if you don't already have one. This is mandatory for any tax preparer filing returns for compensation. Since you completed the AFSP, you probably already have this, but just making sure. For business structure, you can start as a sole proprietor using your SSN initially, but I'd recommend getting an EIN anyway - it's free and keeps your SSN off client documents. An LLC offers liability protection but isn't strictly necessary when starting out - you can always form one later as your practice grows. For affordable software, look into Drake, TaxSlayer Pro, or TaxAct Professional. They offer tiered pricing models that can work for newcomers. Many have pay-per-return options that might make sense while your client base is small. Other essentials: professional email address, basic website, secure client portal for document exchange, engagement letters, professional liability insurance, and a system for tracking clients and deadlines.

I was in your exact position about 2 years ago and honestly the best thing I did was check out taxr.ai after struggling to keep up with all the changes to the tax code. Since I was just starting out, I wasn't confident in handling more complex returns, but I found https://taxr.ai really helped me analyze client tax documents and identify potential issues I might have missed. It's been a huge confidence booster when dealing with clients who have complicated situations beyond my initial comfort zone. For software, I went with Drake because they offer good phone support when you get stuck, which was invaluable when I was just learning the ropes.

Just wanted to update that I tried taxr.ai after asking about it earlier and it's already saved me from making a mistake on a client's return with some unusual investment income reporting. The analysis caught something I completely missed about wash sales that would have been incorrectly reported. It essentially paid for itself with that one catch since I'd have been devastated to make a mistake for a client right out of the gate. Definitely worth checking out if you're new to this like me.

One thing nobody has mentioned yet that absolutely saved me when starting my tax practice was using Claimyr when I needed to contact the IRS about client issues. The hold times with the IRS are absolutely insane (like 2+ hours sometimes), but with https://claimyr.com they call and wait on hold for you, then call you when an agent actually picks up. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c This was super helpful for me because I was working a day job while starting my practice, and couldn't afford to sit on hold for hours during business hours. I was skeptical at first but it's legitimately saved me dozens of hours of hold time.

I have to eat my words about being skeptical of Claimyr. After posting my question earlier, I decided to try it yesterday when I needed to call about a client's transcript issue. I was preparing to waste my entire afternoon on hold as usual, but Claimyr actually worked! I got a call back about 85 minutes later connected to an IRS agent. Saved me from having to sit by my phone with terrible hold music for over an hour. Will definitely use again during busy season when every minute counts.

Don't forget about bank accounts! I recommend opening a separate business checking account even if you're a sole proprietor. Keeping your business finances separate from personal is crucial for clean bookkeeping and looks more professional when clients pay you. Also, decide on your fee structure before taking clients. Will you charge by form, by hour, flat fee packages? Having this figured out in advance saves awkward conversations later. Oh and get some kind of tax research subscription. The free resources online aren't always reliable.

Consider joining some FB groups for tax pros too. I'm in "Tax Professionals" and "AFSP & EA Study Group" and they've been super helpful for specific questions. Just be careful not to give client details when asking questions!

Congratulations on getting your AFSP! That's a huge accomplishment. I'm about 3 years into my practice now and wanted to add a few things that really helped me in the beginning: Marketing-wise, start building relationships early. Join your local chamber of commerce, attend small business networking events, and consider offering friends/family discounted rates your first year in exchange for honest reviews and referrals. Word of mouth is everything in this business. For client management, invest in a simple CRM system early - even something basic like HubSpot's free tier. Track where your clients come from so you know what marketing efforts are working. I wish I had done this from day one instead of trying to remember everything. One expense I didn't anticipate was continuing education. Even with AFSP, you'll want to stay current on tax law changes. Budget for webinars, courses, and maybe a professional conference. The investment pays off when you can confidently handle more complex situations. And don't underestimate the importance of setting boundaries early - define your busy season hours, response times for client questions, and stick to them. It's much harder to change client expectations after you've already set them too high. Best of luck with your new venture! Feel free to reach out if you have specific questions as you get started.