Tax Preparation Service

Prepare individual and business tax returns providing seasonal tax services to individuals, self-employed, and small businesses

Startup Cost
$2,000-$8,000
Difficulty
Intermediate
Time to Profit
1-2 tax seasons
Profit Potential
$5,000-$15,000/month

Overview

Tax preparation businesses prepare tax returns for individuals and small businesses - gathering information, preparing returns, ensuring compliance, and filing with IRS and states.

Tax prep is seasonal (January-April primarily) with high demand during tax season.

Per-return pricing ranges from $150-$500 for individuals to $500-$3,000+ for businesses.

Preparing 200-400 returns annually generates $60,000-$180,000 with 60-80% margins.

Target clients include individuals with complex returns, self-employed and freelancers, small business owners, rental property owners, and anyone needing tax preparation.

Services include individual tax returns, business returns (S-Corp, C-Corp, partnerships), self-employment tax, rental property returns, state returns, and potentially amended returns and tax planning.

Success requires tax knowledge and staying current with tax law, attention to detail and accuracy, efficiency preparing returns at volume, client service during stressful tax season, and potentially PTIN, EA, or CPA credentials.

Many tax preparers operate seasonally, use tax software (Drake, Lacerte, TurboTax), potentially offer year-round bookkeeping, work long hours during tax season, and build recurring client base returning annually.

Required Skills

  • Tax Preparation
  • Tax Software
  • Tax Code Knowledge
  • Client Service
  • Attention to Detail

Pros and Cons

Pros

  • Recurring annual clients
  • High seasonal demand
  • Can start part-time during tax season
  • Tax software automates calculations
  • Clear value proposition for clients

Cons

  • Highly seasonal income
  • Intense workload during tax season
  • Liability for return errors
  • Annual tax law changes
  • Competition from H&R Block and online services

How to Get Started

  1. Learn tax preparation thoroughly
  2. Obtain PTIN and consider EA or CPA
  3. Invest in professional tax software
  4. Get EFIN for electronic filing
  5. Start with friends/family returns
  6. Market before tax season begins
  7. Build recurring client base

Explore More Accounting & Bookkeeping Ideas

Discover additional business opportunities in this category.

View All Accounting & Bookkeeping Ideas →