Looking for an Inexpensive Home Business? 4 Tips to Start Preparing Taxes

Are you looking for a little extra income from a side business you can run at home? One great idea for anyone who's good with people is to do seasonal tax preparation. Depending on how much time and effort you want to expend in the venture, you could start your new business with only a minimal investment.

Here are four tips to become a tax preparer on a small budget.

Get Trained

The first thing you'll need in order to prepare taxes is training in how to do it. You can find many online courses that offer the basic education needed to start doing personal tax returns (Forms 1040) in only a few months. You may be able to get free or low-cost training from a large tax preparation chain, but you'd likely have to work for them for a period of time.

Most states don't have additional licensing requirements (Oregon and California are notable exceptions), so you may only need to obtain a Tax Preparer Identification Number from the IRS in order to start your business.

Share Office Space

Certainly, one of the biggest expenses of a client-based business like tax preparation is office space. You can avoid this expense by being a little more creative. One growing trend among entrepreneurs is called "co-working" or "office hoteling." Both methods involve partnering with other small businesses to rent a shared work space. You can either have a large enough space to have a separate desk space or you may want to share a smaller space in shifts. Either way, you get a physical work address, a place to meet with clients, and a reduced office expense. Keep extra files and equipment in a rented commercial storage unit if needed. 

Store Everything off Season

Tax preparation is largely done between January and April of each year, so you can store most of your business and client files off-site the rest of the year. Find a secure, climate-controlled commercial storage unit for rent, which is likely to meet IRS regulations about safely maintaining client files. Renting a commercial unit that keeps files at the same temperature all year long will generally cost less than keeping an office space and keep your business from intermingling with your personal life.

Advertise Cheaply

When you start any new business, free or cheap advertising is key. Look for cheap advertising options, such as local organizations, free online marketplaces, and community bulletin boards. If you spread the word among your own network of friends and acquaintances, you're likely to find that many people are looking for help doing their taxes. Order basic business cards that you can hand out throughout the year.

While setting up a seasonal home tax preparation business on the cheap may involve some additional effort, it can be rewarding as your profits go up and your expenses stay low.