How do tax preparers make money?

Tax preparers make money in a few ways. Namely, they make most of their earnings by preparing tax filings for individuals, businesses, and other entities such as estates and non-profit organizations.  The cost of preparation and the filing of the returns will vary greatly. Preparation fees for an Individual tax return for the current year might range anywhere from $100 and upwards depending on complexity and additional forms.  Prior year tax filings and amendments may also make up a larger portion of their tax prep workload.

Most tax preparers make money by using “forms based pricing” which means that there will be an additional fee for each form that your preparer has to fill out.  This is an objective way to charge for tax preparation services. Some preparers earn money as a tax professionals by charging a flat rate based on hours.

Preparers may also offer tax planning or representation services. Those services are typically higher dollar services and come with specialized educational requirements to maintain those abilities. Others may offer insurance, payroll services or bookkeeping services in addition to tax preparation. 

Another type of specialization would be ITIN application tax filings. Any person who is not eligible for a SSN would be eligible for an ITIN. The application is completed and sent with the tax return.  ITIN services are also a higher dollar service when done by a specially designated professional.

If you are interested in becoming a tax professional or have any questions about how to make money as a tax preparer, please speak to one of our friendly representatives. Give us a call at 1 (866) 357-2052.