My Tax Season Wrap-Up & Outlook for Tax Profession

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Introduction: 2024 Tax Season Wrap Up

Tax season has finally wrapped up and I can finally relax a bit. This was my ninth tax season working for myself, and I have to say it was the most successful tax season to date. This is in terms of the amount of money I made and that it was mostly stress-free.

I'll explain why this was and how you can use this knowledge in your own job or life.

Later in this blog post, I wanted to also share my outlook on the tax profession industry. If you ever wondered if it was still a good profession to get into, I've got an answer for that.

Read on!

How to Survive Tax Season As a Tax Pro

Hi, I'm Noel Lorenzana. I'm a CPA, and I absolutely love doing taxes. So this last tax season, I have to say, was pretty easy, relatively speaking.

Why was this?

Well, I did a few things that everybody should do:

  • I got organized. For example, I got my tax software set up properly.
  • I got my computers just set up and optimized.
  • I made sure my office space was neat and tidy and organized.
  • I made sure that I had all the supplies that I would need.
  • I also made sure that my website was updated along with my new client tax organizers.

These are all online.

Basically, I prepared properly for the upcoming tax season, and I made sure that I did this well in advance. So when tax season eventually rolled around, I was good to go and I was able to hit the ground running, so to speak.

So what are some other things that I did differently this year?

February: Not the Time for Bookkeeping!

Okay, I implemented a rule that said, "I would not do any bookkeeping after February." Because bookkeeping is great and all, but it does take up a lot of time.

And in previous years, I would probably do bookkeeping, maybe all through March, maybe a little bit into April, but this was a huge mistake. I could have been spending that time working on 1040 individual tax returns.

Now, I did have one unhappy client who hoped I would do his business tax return, which did require bookkeeping. This was in March. The deadline for filing his return was March 15th, but I held to my rule, didn't make an exception, and I told him I would do it after tax season.

He ended up going somewhere else, and that was actually fine with me. His return was not a return that I looked forward to doing, so let's call that a win.

Saying "NO MORE" is a Game-Changer

Another thing I did was saying, "NO MORE".

Often in previous years, I might have bent over backwards to accommodate client request and new client request. But this year, I held fast to my policies and procedures, let's call them.

I encouraged virtual tax preparation only, which entails having clients uploading their tax documents to my client portal. This eliminates the need for in-person appointments, which are great and all, and I like them. But after the pandemic, I let my office space go, and I'm not really set up for in-person appointments anymore.

And for me, that's great.

I don't have that rent or office expense to worry about. But on the other hand, it does turn some people off because some people still want that old-fashioned sit-down, face-to-face meeting.

Now, I understand that, and I'm willing to do that over a Zoom or virtual call, but if that's not good enough, that's okay. Goodbye.

I was also a lot quicker about saying no to potential clients I deemed not a good fit right from the start.

Know Your Own Limits

Another thing I did was to be very aware of my own limitations and the limitations of my tax software.

Now, for me, my strong suit is small business taxes, small business bookkeeping & accounting, and individual tax preparation for, let's say, mid to high-income individuals.

I'm not a big fan of trust or estate tax returns. I prefer not to do those. So whenever those come around, I would just politely decline.

In the past, I might have said yes to those returns, but since I don't do those often enough, it might take me twice as long. So from a cost-benefit point of view, it's just not there.

For most individual tax returns, I can do those all day long.

Regarding my tax software, the one I use is called DRAKE, and it's not the Cadillac of tax software by any means. If anything, it's more like the Ford or the Chevy. It's a fine option, but it doesn't have all the bells and whistles that higher-priced tax software have.

There are certain things that it cannot do well, such as complex tax returns or tax returns that require multiple states. So if I would get those types of request or if an existing client just got too complicated for my tax software, I would have to politely decline the engagement, and they would appreciate the honesty.

I would be remiss not to mention my favorite tax practice productivity software, and that's called, Taxdome. It's not just for tax practices, it's also for bookkeeping and accounting firms. The best part of it is you can actually lock the tax return until the invoice is paid.

Think about it. No more unpaid invoices.

They do have a free trial. I'll link my affiliate link here. You can try it out for free. If you do decide to buy it, I would get a small commission, but at no additional cost to you. Check it out.

Leverage Technology

The last thing I did, which was very effective, and I've always done this, but that's to leverage technology.

Some people are good with technology, some people don't like technology, on the other hand.

I love it. I embrace it, and if anything, it helps me attract clients who also like technology, especially, let's call them younger clients. Maybe that's under 40, and for me, that's perfect.

As a side note, as much as I love helping our seniors or senior citizens, they typically require a lot of hand-holding. They have lots of questions. They want in-person meetings. They're not very good with computers.

So something as simple as doing something online, making a payment, retrieving documents, can be very difficult for them.

Needless to say, I filter them out with my virtual tax preparation process. But anyway, technology is great.

I utilize a client portal where clients upload their tax documents. I use some apps that automate things that I have to regularly type. I use templates in Gmail for anything that I need to repetitive type. For those, I just create a template for it and use it over and over. I also use ChatGPT, like a personal assistant

Also, I don't know about you guys, but the cost of everything that I need to run my business and to live my life have gone up, I would say about 10 to 20%, this past year alone.

As a result, I've had to increase my prices. So I was using about 5% for easy tax return good clients and 10% for maybe not-so-easy tax return clients. I thought that was fair. And for new client inquiries, they'd be quoted at my higher base price, if you will.

I didn't get any pushback on these. I'd call them modest price increases. I mean, I could have probably raised them even higher, but for me right now, I was fine with this.

So moving on to the outlook for the tax profession.

The Outlook For The Tax Profession

According to my friend and mentor, Joe Cass, whose motto is, "Do taxes. Make money." According to him, a recent NATP, that's the National Association of Taxpayers, the survey says that 67% of professional tax preparers have been in business for over 21 years.

So in 10 years, if you think about it, there'll be a serious shortage of professional tax preparers. There will be consequences from this.

What does this mean for you?

Well, if you have a basic tax return, you might want to start learning how to prepare your own taxes. TurboTax is pretty easy to use.

If you're younger or looking for a new career opportunity, the tax profession might just be the opportunity you've been looking for. It's lucrative and highly profitable.

How to Get Started in the Tax Business

Here's what you need to get started in the tax business:

  • You need knowledge on how to prepare tax returns.
  • You'll need professional tax software, which is several thousand dollars per year
  • You'll need competency and the willingness to work hard.
  • You'll need experience. Now, naturally, this is a little simplistic. You typically can't start off on your own without experience, but you can get experience very easily. You can go to work for one of the franchises like H&R Block or Jackson Hewitt as a seasonal tax preparer. You'll need to take their classes, but those are great places to get experience.

There are no licensing requirements to become a tax preparer. I mean, I wish there were because anyone can hang up a sign and prepare taxes, good or bad, that's how it is.

Career Choice: The Tax and Accounting Profession

Now, if you're a younger person, when looking for a career choice, I would strongly consider the tax and accounting profession. You can skip the CPA license. An accounting degree is recommended but not necessarily required.

I mean, if you wanted to really shortcut this, you could actually skip college, but you'd need to learn bookkeeping either online or via college courses. If you intend to do business tax returns, you must become proficient with bookkeeping and accounting.

Next, you can become an EA or an enrolled agent. This is licensed by the IRS, the Internal Revenue Service. It can be a difficult exam, but it's very doable for most people.

Next, you want to get experience by working under a professional for at least two years, in my opinion. You can even start your own business, and you can even do this from home. That's what I do. Ideally, you'd want to find a mentor, somebody you could reach out to when you have questions.

Also, you want to network with other tax professionals. You can do this simply by joining groups on Facebook. I'm not kidding. This helps tremendously.

By doing what I've outlined, you'd be able to provide a good livelihood for yourself and your family. I think you could be making an easy six figures after a few years, in my opinion.

Now, starting and running your own business, it's not for everybody. There is a lot of work, but then the trade-off gives you the freedom to, I don't know, take your kids to school in the morning, pick them up after school, not worry if you have to stay home because they're sick.

Essentially, you could be around as much as you need to be. But not everybody has the fortitude where you can actually run your own business successfully.

And if that's not for you, that's fine. You can go work for somebody else or with a CPA firm or tax firm, and you can still do very well for yourself.

If you're concerned about AI, well, it may end up taking our jobs one day, all of our jobs for that matter. But for now, I think the tax industry is pretty secure, and one can always pivot to tax problem resolution if all else fails. That's basically handling IRS tax problems.

Anyway, this is my tax season wrap-up and my outlook for the tax profession industry. Let me know your thoughts, feel free to leave a comment on my YouTube video. And while you are there, don't forget to like and subscribe.

I appreciate you reading. See you in my next blog post.

About The Author

Noel Lorenzana is an Illinois-licensed, Registered Certified Public Accountant with over 20 plus years of experience.

Through his online educational content, YouTube videos, easy-to-understand courses and 1-on-1 consulting, he gives you the tools to become tax savvy for yourself. 

Disclaimer: Any accounting, business or tax advice contained in this article, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.