Items/Number Needed for Practice

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#1
Posts:
260
Joined:
20-Sep-2020 2:59pm
Location:
US
Hey guys,

Wanted to make sure I wasn’t missing anything for a new tax practice:

Entity
EIN
Firm license with state board
State unemployment number
State withholding number
FIRE for 1099s
Social security administration for w2s
ERO for tax returns
8655 for each client I do tax deposits for
EFTPS login for the above

Anything else that I am missing?
 

#2
Posts:
8152
Joined:
4-Mar-2018 9:03pm
Location:
The Office
Not sure if you mean EFIN by "ERO" but that's a pretty big necessity.

PTINs as well for those who will be signing returns, but you probably already have that covered.

CAF number. If you don't have one, they'll issue one after you send in your first POA.
 

#3
Posts:
2887
Joined:
21-May-2018 7:50am
Location:
Northern MI and Coastal SC
What state are you in? Some states have very good portals that practitioners can use to gain access to client records, notices, etc. South Carolina has one of the best I have ever seen for both the Department of Revenue and Department of Employment and Workforce. You'll want to look into what options exist for the state(s) you will be working with. Some do not require a POA to gain access (you just need verifying information to identify you work with the entity) while others do require a POA.

If you file in some states and are not a CPA or hold another exempt credential, you will need to register. NY is an example.

And word of advice, go paperless. Scan all docs and buy Tic Tie Calculate to work with tax documents in Adobe Acrobat.
 

#4
Posts:
2468
Joined:
24-Apr-2014 7:54am
Location:
Wisconsin
You might not need to set up FIRE for 1099s. I use an online filing system (Track1099, but there are plenty of other ones out there) which take care of the filing without you needing to worry about it.
 

#5
Posts:
2611
Joined:
24-Jan-2019 2:16pm
Location:
North Shore, Oahu
Tax Software, possibly on a network

Cloud storage / portal / means of delivering sensitive docs

E&O/Professional Liability Insurance

General liability if you are renting space

appointment system, or just Google calendar

Covid related protective items and procedures, if this is something you believe in (or out of concerned for employees)

website

e-signature service with KBA

written security policy
 

#6
Posts:
523
Joined:
24-Jun-2016 4:01pm
Location:
Working Remotely
ADP gives out free things plus no one actually wants to do payroll no money in it
 

#7
Posts:
1174
Joined:
21-Apr-2014 7:09pm
Location:
NC
Treetopclimes wrote:ADP gives out free things plus no one actually wants to do payroll no money in it


I learned a long time ago…. Don’t get involved in payroll or bookkeeping
 

#8
Posts:
260
Joined:
20-Sep-2020 2:59pm
Location:
US
I don’t mind the bookkeeping, I can price that well enough to make money on it, payroll is definitely not the same, but sometimes you have to do it to keep the other business and try to make it up elsewhere
 

#9
ATSMAN  
Posts:
2094
Joined:
31-May-2014 8:34pm
Location:
MA
I am not sure where I saw, there was a good white paper about Starting A Tax Prep business. May be it was NATP.
 

#10
Eduardo  
Posts:
206
Joined:
28-Apr-2014 1:27pm
Location:
Midwest
TaxMan2020 wrote:I don’t mind the bookkeeping, I can price that well enough to make money on it, payroll is definitely not the same, but sometimes you have to do it to keep the other business and try to make it up elsewhere


Agree - bookkeeping is fine but I absolutely hate payroll. We do a few, but it's only inputting hours into our software and sending the client the payroll journal so they can write the checks, and these only have a few employees each so it's not a big deal. We do run W-2's and quarterly payroll taxes for a couple others, and those are a PITA, but we get nice fees for the accounting work so we'll do them.
 

#11
Posts:
679
Joined:
30-May-2014 1:43pm
Location:
MA
Bookkeeping can be very profitable but put me in the stay away from payroll at all costs. Even if a client tells us they are the only employee we send them to a payroll service.

I can not not imagine trying to stay on top of all those new covid payroll laws that were coming out. It seems ilke payroll is where congress turns to to put instant $$$ in taxpayers pockets. And you can not afford to not stay current

Too much risk, not enough reward and it it has almost gotten to the point where none of the small guys even offer it anymore so there are not a lot of options because your competitors will say we do not do payroll.
 

#12
CP Hay  
Posts:
226
Joined:
3-Apr-2019 5:24pm
Location:
NEW YORK (NY)
I offer payroll and I agree that it's definitely not the highest margin service to offer. However, I look at payroll as a chance to provide good customer service and help build a bond with the client. Sometimes the time spent processing the payroll is more than I'd like. With so many changes in the law and possible mishaps I always wonder how on earth these payroll companies like Gusto and the others can provide the service for so cheap and still make a profit ??!!
 

#13
Posts:
1174
Joined:
21-Apr-2014 7:09pm
Location:
NC
CP Hay wrote:I offer payroll and I agree that it's definitely not the highest margin service to offer. However, I look at payroll as a chance to provide good customer service and help build a bond with the client. Sometimes the time spent processing the payroll is more than I'd like. With so many changes in the law and possible mishaps I always wonder how on earth these payroll companies like Gusto and the others can provide the service for so cheap and still make a profit ??!!


While I get it... I try to only do work that I can bill at $250 to $300 an hour or value bill. Payroll keeps you tied to the desk and by it's nature is full of opportunity to make errors. I don't know how the market in NY is although I went to Pace and am a NYer, but the market here in NC is exploding.

I could literally fill my days with 1040's and my minimum fee is $600. So if you can bill out $2,500 a day , why do payroll. You hire someone to help, they quit, now you are fu**ed. Just my thoughts my friends.

What is the market like in NY? What part are you in?
Last edited by southparkcpa on 31-Mar-2022 6:56am, edited 1 time in total.
 

#14
ATSMAN  
Posts:
2094
Joined:
31-May-2014 8:34pm
Location:
MA
Payroll Processing is a nightmare if you are not setup for it. I tried it to keep my tax clients from venturing out and it was a bad decision. Stress went through the roof, making corrections, getting calls from angry workers etc. Now I have build two sources of referral locally and I direct my clients to them if they need payroll support. I know these people will not back stab me on accounting and tax prep work. :|
 

#15
CP Hay  
Posts:
226
Joined:
3-Apr-2019 5:24pm
Location:
NEW YORK (NY)
southparkcpa wrote:
CP Hay wrote:I offer payroll and I agree that it's definitely not the highest margin service to offer. However, I look at payroll as a chance to provide good customer service and help build a bond with the client. Sometimes the time spent processing the payroll is more than I'd like. With so many changes in the law and possible mishaps I always wonder how on earth these payroll companies like Gusto and the others can provide the service for so cheap and still make a profit ??!!


While I get it... I try to only do work that I can bill at $250 to $300 an hour or value bill. Payroll keeps you tied to the desk and by it's nature is full of opportunity to make errors. I don't know how the market in NY is although I went to Pace and am a NYer, but the market here in NC is exploding.

I could literally fill my days with 1040's and my minimum fee is $600. So if you can bill out $2,500 a day , why do payroll. You hire someone to help, they quit, now you are fu**ed. Just my thoughts my friends.

What is the market like in NY? What part are you in?


I agree that it's better to focus on the higher value billing. I'm not far from Pace. The market is good and highly referral-driven.

ATSMAN wrote:Payroll Processing is a nightmare if you are not setup for it. I tried it to keep my tax clients from venturing out and it was a bad decision. Stress went through the roof, making corrections, getting calls from angry workers etc. Now I have build two sources of referral locally and I direct my clients to them if they need payroll support. I know these people will not back stab me on accounting and tax prep work. :|


To clarify, by offering payroll I mean outsourcing it all to the payroll processing companies and then billing the client.
 

#16
ATSMAN  
Posts:
2094
Joined:
31-May-2014 8:34pm
Location:
MA
To clarify, by offering payroll I mean outsourcing it all to the payroll processing companies and then billing the client.


That is all fine and good, EXCEPT if you are billing your client for payroll processing, I think you may have exposure to liability should your chosen back end payroll company mess up.

I don't want any liability, I just refer them two names and they make the deal. I don't sign nothing!
 


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