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[email protected]
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Mon - Sun: 9:30 AM - 7:30 PM
[email protected]
Mon - Sun: 9:30 AM - 7:30 PM 
Talk with us: 639-318-6125
The journey of starting a tax preparation business in Canada is an exhilarating entrepreneurial endeavor that mixes the expertise of being a professional with the added benefit of flexibility from running your own practice. Whether you are using the skills you gained in the ProFuture Academy’s formal training programs or building from your prior financial knowledge, your journey from professional certification to securing your first client requires you to take the necessary steps to prepare yourself to serve future clients.
The tax preparation industry is an integral sector within Canada’s economy and represents a bona fide business opportunity. Thousands of individuals and businesses require professional assistance each year during the tax season, and there is always a high demand for skilled and qualified preparers. Ultimately, the success of your practice is dependent upon how you develop your client’s trust in you to be that credible and knowledgeable professional with Canadian tax law who provides effective service and value.
Step 1: Finalize your certification and CRA registration
First things first, before you start your practice, make sure you have the right credentials and registrations.
The certification you earn from programs like you received at ProFuture Academy gives you great foundational knowledge on how to prepare individuals’ taxes (T1), corporations’ taxes (T2), accounting basics and payroll. This training gives you a solid foundation to perform taxes with services like TaxCycle Software and QuickBooks Online specifically designed for your anticipated practice to serve your clients.
You cannot prepare and file tax returns for your clients until you register with Canada Revenue Agency. You need to do several important steps:
Business number (BN): You will need a business number identifier for your business so you can identify yourself should CRA need to verify your tax preparation business. You can obtain this BN by registering through Business Registration Online, by phone, by mail or by fax at 1-800-959-5525.
Representative Identifier (RepID): You need to apply for a RepID identifier to represent clients for CRA communications. You’ll be able to access clients tax information to see what they filed, support your clients on CRA communications they have and you will be able to assist your clients in communications with CRA.
EFILE registration: Apply for your Electronic Filing Identification Number (EFIN). Once you receive EFIN, you will be able to electronically file tax returns. CRA approval can takes up to 30 business days after the E-file application is received by CRA. Once you are registered as E-file you will be required to adhere to compliance standards if you decide to keep your E-file status.
Step 2: Set Up Your Business
Structure Choose a Business Structure Most solo part tax preparers in Canada choose a sole proprietorship or become a corporation. Decide on a structure based on some considerations:
Open a separate bank account for the business; this ensures a clear separation of business and personal money. Having a separate account sets a professional tone and makes it easier for you to track your income and expenses and keep accurate records for your own tax purposes.
Make sure to have professional liability insurance coverage for your practice. Professional liability insurance is an important aspect of working in the tax preparer sector, as one mistake can cost your clients a lot of money.
Step 3: Develop your service offers and pricing structure
Define your service offer Based on your training and your expertise define the services you will offer:
Consider a three-tiered pricing structure that offers choices for clients of different needs and maximizes your earning potential:
Basic Package: The simplest tax prep available for uncomplicated returns
Standard Package: Complex returns with multiple income streams, deductions, and credits
Premium Package: Total service including tax planning, year-round advice, and prioritized service
Check local publication to ensure your prices are unique enough to earn business while also being competitive in your space and reflective of your value to the service.
Step 4: Build Your Client Acquisition Plan
Start with your networks
Your first clients will most likely come from your personal and professional networks. Reach out to family, friends, former colleagues, and connections who may be looking for tax prep services, as those clients are valuable in terms of referrals and testimonials.
When those clients find you, they’ll need to have a professional appearance of your services, your competencies, and your differentiation from other firms. Get a professional website that clearly shows.
Ensure that your website is developed as a local search engine optimizer, so potential clients can find you when they search for an available tax preparer, in your area.
Participate in all local chamber of commerce/networking events to build relationships with entrepreneurs and private service providers such as financial advisors, lawyers, and bookkeepers that can partner with your business direction.
Create a presence with places such as LinkedIn, Facebook, etc. Share valuable tax tips, reminders of upcoming deadlines, and industry news as a way to show your expertise and remain top of mind with your potential clients!
Step 5: Get to Know the Client Onboarding Process
Carry Out Detailed Client Interviews
Your initial consultation with a client prepares the groundwork for the entire client experience, so make sure you ask all the right questions and gather all the necessary information about their financial situation, prior tax history, and what they are looking for:
Make sure that you have made clear expectations around things like:
Set up a standardized process for the collection of documentation for clients and the organization of documentation. Only use secure means of sharing documentation. In addition, ensure you have well-organized files (physical or electronic) setup for each client.
Step 6: Focus on Building Client Relationships
By providing a timely and accurate service, being proactive in identifying opportunities to save them on taxes, helping them understand complicated tax issues, be responsive to any questions or concerns that come up, and following up after you have completed the service, will create loyal clients who will come back to you again and again.
A satisfied client is your best advertising. Ask your satisfied clients to leave you a Google review or a LinkedIn recommendation. If you can get a few written testimonials, then you can easily add those testimonials to your website and marketing material.
Establish incentives to have your existing clients refer you new business. A great referral program can be as simple as paying a referral fee of $20-50 in exchange for having a firm refer you a new client. These small investments can pay of dividends in new business.
Step 7: Plan for when the business grows and sustainability
Track the business metrics that are important to you, such as the:
When your practice grows, consider expanding your range of services to include things such as:
A larger services portfolio can result in a more balanced workload, and consistent year-round revenue.
As tax laws change, keep your knowledge current by:
Tax preparation is inherently seasonal, with the busiest season running from January through until the end of April. Develop a plan to manage the seasonal nature of the practice, such as:
Use quality software and other technology, which will improve your capability and professionalism, for example:
A successful tax preparation business takes time and hard work, a commitment to constantly bettering yourself through learning, and a commitment to customer service excellence to meet your client expectations. If you put in the work to become properly certified, register with CRA, create a plan, and identify an appropriate way to acquire clients, it is possible to develop a successful practice that gives you professional satisfaction and financial success.
Understand that the training you receive at ProFuture Academy, combined with your application of TaxCycle and QuickBooks Online, have you set up for success in this rewarding field. Keep in mind that every successful tax professional started the same way – with their first client. Focusing on delivering value, trust, and reputation, you’ll leave a good impression on any potential first client of your own.
Your experience with Canadian tax law, your application of basic business principles, and sourcing your client’s success and profit will be the building blocks that help you create and lead a practice that can grow and prosper for many years.
