Kim Erick worked crazy long hours in the banking industry for 16 years before deciding to make the leap into launching her own business, Home Time Business Services. In this work-at-home spotlight, we interview Kim, who answers the question “Is being a tax preparer worth it?” and shares her story on how she started a virtual tax prep services business and why she loves it.
If you’re curious about how to start a tax prep business, you’ll be interested in Kim’s journey and her advice on the characteristics and skills required to be effective in the business.
Over to you, Kim!
Tell us a bit about yourself! How did you get started working from home?
I have always been encouraged by my husband to start a business, but I never knew what type of business to start. My background in banking helped me decide to get into Bookkeeping and Taxes.
I started in Bookkeeper Launch August 21, 2017. Four days later I secured my business name of Home Time Business Services LLC. Then, October 19, 2017, I purchased TaxBiz (previously known as Tax Business Launch) with just 2 bookkeeping clients. By the end of my first tax season, I had 10 bookkeeping clients and over 20 returns submitted to the IRS.
A little of my history, I graduated from university with degrees in Political Science and Public Administration, and later obtained a Masters in Public Administration with a focus in Budget and Finance Management. From there, I went to work for the State of Ohio’s Performance Audit Division.
After a little over a year at the Auditor’s Office, I realized I missed working directly with people and took on a few odd jobs to figure out what I wanted to be when I grew up. Ultimately, I landed in the banking industry for the next 16 years.
This prepared me for many of the aspects of bookkeeping and tax that I love. I enjoyed educating clients, reviewing tax returns for business loans, and giving advice to business owners starting out their dreams. I realized that I find my greatest happiness when I help others achieve their dreams and goals.
What made you decide to take TaxBiz?
It was a simple decision when Ben Robinson rolled out TaxBiz in October 2017 and I’d only been around for 2 months. His programs really teach you to run a business. I’d barely got started with the bookkeeping side of my business and didn’t know if financially it made sense at the time.
In discussing it with my husband, we decided you have to spend money to make money and paid for the course that day. I was one of the first students into the inaugural launching of TaxBiz (then known as Tax Business Launch).
It fit very naturally with my business and skill set. I’d been helping friends answer tax questions and self-file their taxes for years it seems. Now, I get to do it as a paid preparer. Of course, I’m happy to still help friends, but with TaxBiz I’m able to truly appreciate the amount of knowledge that goes into the preparation of a “simple return” and not rely on the software to do it for you.
Honestly, I didn’t think I would be prepared to do a return come January, but I knew that I would have the whole year to do the course if I wasn’t. There is some red tape to getting through the IRS’s process to be able to submit returns to them and TaxBiz walks you right through that process.
How does your business fit in with your schedule? Does it allow for flexibility?
While tax season is a bit busier than the rest of the year, I have relatively full flexibility with my schedule. I work with clients virtually and so I don’t have to wait to meet them or anything like that.
I like waking up early and working as that is my productive time of day.
What is your favorite aspect of providing virtual tax prep for small business?
I love that there are clients I have never met face-to-face, but I know I’ve saved them a lot of money by making them go back and do the work to find receipts and think back on things they have done.
Business owners are the worst when it comes to keeping track of all their expenses! Think about your mileage, tolls, picking up just this little thing for the office. All those add up quickly and can be a savings on your taxes if you are diligent with tracking.
Even more, I love making sure clients don’t pay the IRS one dime more than they need to. Tax planning is where I truly seem to geek out in the business.
Are there any drawbacks to running this kind of business?
Some clients are just technologically challenged, so trying to explain to them how to log into a portal and get returns, or how to electronically sign the returns can be difficult – especially when the software doesn’t cooperate!
The other drawback is you have to exude confidence when working with people’s taxes. This is something that is very personal to individuals and they are opening up their entire financial life to you. Trust is of the utmost importance!
What skills or characteristics make a great tax preparer?
The most important characteristic is integrity. You are dealing with a lot of sensitive information from Social Security numbers to Driver’s License numbers to their entire financial picture.
Humbleness is the next most important characteristic. The more you learn about tax, the more you realize you don’t know about tax! Did you know that the tax code has more words than the Bible, War and Peace and ALL of Shakespeare’s plays combined? With all the tax law changes this past year, the continuing education and keeping on top of the changes was a big challenge. So there has to be a lot of self-motivation and desire to constantly be learning.
I think the number one skill is research ability followed closely by detail-oriented. When you combine the research and humility to ask for help, you will find much success.
Is it a challenge to find clients when you start a tax prep business?
I have joined a Business Networking International chapter and they have provided such great warm referrals that my marketing was non-existent outside of the group for tax leads. When you do a great job at a fair price, the referrals come with additional clients to refer to you.
This year was my 2nd season and I more than doubled what I did in the first year and continue to pick up returns through the year of people who missed filing for the past few years for various reasons.
How many hours do you work a week?
If you count the time I spend networking, some weeks I only do the networking, others I put in a good 30 hours. But this is nothing compared to the hours I worked as a salaried manager at the bank with ZERO flexibility. I feel like I don’t really work anymore, I’m helping others and I don’t watch the clock when I’m working.
When I started out, and was in full learning mode, I was dedicating 40 plus hours each week to be able to get my business going. When I added the tax into it, I was so energized that I was spending 25 hours studying and doing tax exercises and then my networking for 2-3 hours a week and 5 hours doing bookkeeping work (and learning it too).
Is tax prep alone a full-time career, or do you need to supplement your income with other services?
I could make this my primary source of income, and have calculated what I could do during tax season to work really hard for 3 months out of the year, and not as hard for the rest of the year.
I’ve also been able to add tax planning through TaxBiz and this is something that will help to bridge through the remainder of the year as well. It’s a very natural addition to the preparation and bookkeeping.
Unfortunately, many give this information away for free and don’t capitalize on the breadth of knowledge and suggestions we can impart on clients. I will be able to save one client about $3000 this year by making a change to her 401K contribution and that was just one suggestion! All her tax services with me will be paid by these savings alone.
How has starting a home business changed your life?
My life looks NOTHING like it did less than 2 years ago. I was working crazy hours working in an in-store bank which was open 7 days a week and extended hours. Managing people, dealing with customers who didn’t like policies that I couldn’t change, and overall just not enjoying any free time with my mate.
I feel like this opportunity came at the right time, I had just started to discover my spiritual needs and studying the Bible. I feel like this was God’s hand in my life making room to better serve his purpose and still be able to contribute to our household financially.
Additionally, I have grown as a person so much in truly giving more than I receive helping others with their bookkeeping and tax questions when I can. Sharing successes to keep others motivated.
Do you feel that a virtual tax preparation business is a good work-from-home career option for stay-at-home parents?
Absolutely. It definitely isn’t for everyone, but if you think you would enjoy researching and details it might be for you. Owning a business isn’t for everyone. It is a total mindset change moving from an employee to a business owner.
Ben Robinson has some incredible mindset videos to help with this transition in his courses. These, of course, come with exercises and a lot of self-reflection. It’s easy to get bogged down into the work that doesn’t result in clients, but when you focus your efforts there, it can be done. I’m proof of that!
Do you have any advice for someone who’s thinking about becoming a virtual tax preparer?
First, find an awesome support group! TaxBiz has provided that for me. The Facebook group along with the Student Support team will keep your specific questions answered or at least guide you to the right publication to read up on.
Second, know your limitations, TaxBiz doesn’t teach Estate, Trust, or Non-profit taxes. I had a BNI member ask me to do a “simple trust” return. After about 36 hours of research time into the forms and what was needed, I had to swallow my pride and recommend that he find someone who specializes in the return as I truly believed the previously filed ones were incorrect too.
I gained more respect for knowing my limitations and he was able to get great advice from someone who specialized in trust taxes and I was right in the end and the client will be putting a bunch of money back into the trust for the future.
Finally, know that you will never know everything that is in the tax code, but TaxBiz prepares you for the most common issues taxpayers face and research and help can get you through the rest.
Thank you Kim!
Do you have any questions about how to be a tax consultant and work your own, flexible hours? Leave your questions for us below!