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!
Part 1: Interview with Kim Erick – 2019
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.
Part 2: Interview with Tax Preparer Kim Erick – 2021
We're following up with Kim to see how she's doing with her tax prep and bookkeeping business. Some of our readers had asked how Kim's doing now. Did Ben's Tax Biz course really help her create a tax preparation business that works for her? How are things going? Is tax prep a work-from-home business that anyone could do?
Kim was more than happy to talk about her experiences so far in this second interview.
Hi Kim! It’s hard to believe that it has been nearly two years since we last spoke! How are things going?
Hi Robin, Things are going incredibly well! This past year was my 3rd tax season and I doubled, again. I am bringing on help for this upcoming tax season.
How has Taxbiz and your tax prep training changed your business these last two years?
While it started with a bookkeeping focus, I have shifted with a name change and rebranding to business services to more fully encompass the tax side of the business. My confidence grows each season with learning more about the tax code through continuing education, reading what others have encountered and researching to find answers, and simply desiring to learn more to help others.
Is it what you expected?
It’s so much better than what I expected. Actually, when I was talking to my husband about my “little business” he realized I’ve surpassed what I was making as an employee previously. He’s considering coming to do what I do!
How do you manage the bookkeeping side of your business during tax time?
Since we last talked, I am now serving 30 recurring clients. I’ve brought on several bookkeeping contractors to help with the bookkeeping side of the business. Now, I provide guidance and quality control over their bookkeeping work, but that takes much less time than fully doing the bookkeeping myself.
In your last interview, you mentioned the ever-changing tax regulations. How do you stay up to date with them?
Tax Biz is now a provider of CE (continuing education) and so we are able to take the IRS Annual Refresher course at no additional cost and meet all the requirements for the Annual Filing Season Program with the IRS. This is a designation that is the first step to providing a professional designation. The next would be obtaining an Enrolled Agent (EA) designation which is a 3 test series.
Do you do tax work throughout the year or only during tax season?
Some clients aren’t ready “during the tax season” so extensions can be filed. Additionally, I have worked with several clients who simply hadn’t filed for several years. This keeps me doing something tax year-round. The goal is to get the majority of the work done in the traditional tax season. 2020 was a challenging year with the IRS shutting down and extending due dates. This made everyone procrastinate!
What are your current business goals for your tax business? Or what are your future business plans for your tax prep business?
Great question! My next goal is to fully have my bookkeepers do all the bookkeeping and bring on a quality control person. With the tax business, the next goal is to double again and then work on becoming more efficient with that group to have all returns completed within tax season! It’s a lofty goal, but we always need to strive for something.
What is your best advice for finding clients (based on your own experiences when you first got started)?
I have a few sources of finding clients, my most used is referral sources. I have joined a BNI Chapter (Business Networking International) locally, and while we moved to Zoom this year, it really has helped me to grow my tax client base. Additionally, I am working with a few bookkeepers who don’t want to do taxes and they refer their clients to me. It’s truly a win-win on that front, the client’s books are well kept because they went through the same bookkeeping program (bookkeeper.com)
Can someone with no experience really learn to be a tax preparer in your opinion?
Yes, I’m living proof of that. My experience was self-preparation of my own simple W2 only returns. The key is great research skills and learning how to say “That’s a great question, let me make sure I’m giving you the right information for tax year 20XX as it has changed so much over the past few years. I want to give you the right information.” Clients really respect that you’ll take the time to make sure it’s right.
Thank you Kim!
To learn more about Tax preparation and TaxBiz, check out How to Become a Tax Preparer Online with TaxBiz and stay tuned for our comprehensive review of the course!
Do you have any questions about how to be a tax consultant and work your own, flexible hours? Leave your questions for us below!