Starting income tax prep business: Insurance?

Question

Hi. I'm considering starting a small business where I prepare peoples taxes in the evening out of my home. I'm enrolled to take H&R Blocks income tax course, and have done my own taxes for years. Can anyone point me to any malpractice insurance, in case I make a mistake? It would be best if there was one out there which you "pay by the form" or the like since I don't know how much business I'll be able to drum up.

Answer 1

You should consider taking an Enrolled Agent exam before you start your business...

Answer 2

I have been preparing tax returns as a sole proprietor with an office in my home since 1983. I prepare about 200 returns per year. I also provide Electronic Filing services, which is now mandated by some states for practioners preparing more than a minimum number of returns.
I pay about $1200 per year for professional tax return preparation software. The Turbotax you buy at Staples is probably not going to allow you to prepare multiple returns.
There are other expenses involved, such as having a computer with internet access, and the cost of office supplies and furniture, and advertising.
I worked at H&R for a year after having worked at a public accounting firm for 4 years. The H&R course was valuable in that it taught you how to prepare the most basic return. However, many people who want someone else to prepare their tax returns have a more complicated financial situation. Would you turn people away if you discovered their taxes were too complicated for you? Right now I have a client who does daytrading and had almost 400 stock transactions during 2005. Many of my clients are self-employed. How comfortable would you feel doing that type of return?
Actually I try to do only personal returns although occasionally I do a corporation or a trust.
Good luck!

Answer 3

no longer legally, and not in the event that they seize you, for the TX/OR scheme. And if this is Apple, or another corporation, requiring the million dollar criminal accountability coverage, that has no longer something to do with the state so would be required no remember the place you're.