One of the first questions people ask about tax preparation as a career is how much money they can expect to make. The honest answer is: it depends entirely on whether you work for someone else or run your own practice.
Working for Someone Else
If you take a job at H&R Block, Jackson Hewitt, or a local CPA firm, you’re typically earning $15 to $25 an hour during tax season. Annualized, that works out to roughly $30,000 to $55,000 depending on location, experience, and whether you work year-round or just seasonally. The upside is stability. The downside is a ceiling. You’re generating far more revenue for the firm than you’re being paid.
Running Your Own Practice
The math changes when you keep the full fee. Independent tax preparers typically charge $150 to $400 per individual return, depending on complexity and market. A preparer who averages $250 per return and files 200 returns in a season grosses $50,000. At 400 returns, that’s $100,000. Your overhead is low: software, insurance, maybe a small office. Net margins of 60% to 80% are common.
The Real Variable: Year-Round Services
The preparers who earn the most aren’t the ones filing the most returns. They’re the ones offering services beyond preparation. Bookkeeping at $200 to $500 per month for a handful of small business clients adds $15,000 to $30,000 in annual recurring revenue. Tax planning consultations at $500 to $2,000 each add more. Payroll services, estimated tax calculations, and IRS notice response work fill the calendar between April and January.
Some independent practitioners who’ve built year-round practices earn $150,000 to $250,000 or more. That takes time to build, usually three to five years. But the path is clear.
First-Year Reality
Your first season will not make you rich. A realistic first-year range for a solo preparer working from a home office is 30 to 75 clients, generating $7,500 to $18,750 in gross revenue. This is side-income territory, not a salary replacement. Most successful practices take two to three seasons to reach full-time income levels. The second year is easier because returning clients are already on your calendar, and they bring referrals.
What Drives Higher Fees
The more complex the work, the higher the fees. A basic W-2 return pays $150 to $250. A Schedule C return for a self-employed client pays $300 to $500. An S-Corp return (Form 1120-S) pays $800 to $1,500. Moving up the complexity ladder means moving up the fee ladder, and those clients are stickier because they’re harder to serve well.
The Comparison That Matters
Compare this to other low-cost businesses. A tax prep practice can be started for $2,000 to $5,000. A franchise costs $50,000 to $100,000. Most service businesses require inventory, equipment, or a storefront. Few businesses offer this combination of low startup cost, recurring annual revenue, and scalable income.
If you want to learn how to build a tax practice that reaches its income potential, MuseSpring’s attorney-led training covers everything from your first return to year-round advisory services. Visit musespring.com.