Your kitchen table or basement office seem to be attracting enough tax prep clients to keep the cash coming in, so when does your practice need a real office? Does it need one at all?

Opinions vary, especially in this age of technology.

“If the preparer is trying to establish themselves as more than a preparer of a few returns, then that is the time to think about a storefront,” said Twila Midwood, an Enrolled Agent at Advanced Tax Centre in Rockledge, Fla. “A personal decision for sure. But having a storefront does give the appearance of a bit more creditability.”

“The concept of the storefront as an essential requirement for a tax prep practice is dated,” countered EA John Dundon of Taxpayer Advocacy Services in Englewood, Colo, and blogger at www.JohnRDundon.com. “Smart consumers of tax services in this day want quality, reputable, efficient work at a reasonable rate and couldn’t care less about showy storefronts.

“Every aspect of tax prep can now be accomplished using technology in a ‘cloud’ environment,” Dundon added. “Over 70 percent of my customers live in other cities. Aside from three assistants who come to my house, the rest of my employees live and work in their own houses. We’ve been growing at a rate of 40 percent to 60 percent annually for the last eight years with no end to that trajectory in sight.”

“Tabletop preparers or in-home office locations have to overcome the assumption that because they’re working from home they can’t afford commercial space,” said Jennifer Brown, an EA at Implex Tax & Accounting in Clearfield, Utah. “Having a commercial location has served to double my business over the last two years.”


Barking dogs

Business growth is one of the biggest factors in deciding whether to get office space outside the home, preparers said. That, and inconvenience.

Terri Ryman, an EA at Southwest Tax & Accounting in Elkhart, Kansas, started her practice out of her home in 1988. “By 1992 I’d had enough of folks knocking on my door at 6 a.m. or 11 p.m.,” she said. “‘We saw your lights on so we thought you wouldn’t mind…’ So we moved into a building on Main Street. I’m not saying that it wasn’t very convenient having my office in my house: I could squeeze in laundry, making dinner, cleaning, and so on. But with three small children … being with grownups in an official office was presenting a much more professional atmosphere.”

G. Faith Owens, an EA at Grade A Business Services in Glendale, Ariz., operated a tax prep business from home for 12 years. “A home office is a great solution to young families with small children,” Owens said. “I moved to a shared office space when my youngest started high school, and a year ago moved to my first private storefront. In truth, I could go back to my home office tomorrow, but I prefer the work-life balance of being able to leave work at the office.”

“So long as the home office is separate enough that family life doesn't become a distraction to the business, a person could continue to operate from home,” Owens said. “I left my home office because I frequently had to apologize for my dog barking while I was on the phone. Also, once my kids became teenagers it was easier to leave them unattended during the few hours after school before I came home. Lastly, I didn’t have a space suitable at home for my part-time assistant once my workload required the help.”

 

Three months of the year

“We have a more formal office with a front desk, which adds legitimacy,” said Michael Deininger of Deininger & Co., Kenosha, Wis. “While I have remote access, I rarely work out of my home.”

Deininger, in fact, sees storefronts as symptomatic of one problem of commercial tax prep services. “The vast preponderance of American taxpayers can – and, in my opinion, should – have the IRS prepare their tax returns,” he said, “which would eliminate the H&R Block, Jackson Hewitt and others that operate out of storefronts three months of the year and are notoriously lacking in knowledge.”

“But,” Deininger did add, “some of my best clients have come in because of that lack of knowledge.”

Utah’s Brown has office space in a commercial office building. “I do not handle walk-ins,” she said, and “am by-appointment-only. If you’re trying to build walk-in clientele, you’ll want to be a storefront. This multi-faceted question comes down to, ‘What type of clientele do you want to build?’”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access