I’m guessing that if you’re reading this post, you’re looking for the answer to this question: “Do tax preparers make good money?”
Maybe you just finished your own taxes, or still need to get them done. Or you spent money to have someone to do them. And maybe realized that you could be the one who does tax preparation, instead. Then you could be earning the money rather than paying it.
But you don’t know how to become a tax prep professional. And you’re still wondering if tax preparers make good money. Also, do tax preparers work year round? Would you be able to handle the intensity of tax season? What do tax preparers do after tax season? Is there enough work to make a decent income? Can you find tax prep remote jobs that fit into your life without taking you away from your family?
First, let’s answer the question “Do tax preparers make good money?” I found this ZipRecruiter entry that lists the US national average annual salary for self-employed tax preparers as over $68,000. And Recruiter.com reports that there will be over 25,000 new tax preparation opportunities by 2029. Vacancies are growing faster than they’re being filled, so if being a tax preparer is something you’re interested in, there’s room for you!
Re-Introducing Tax Prep and Bookkeeping Expert Kim Erick
After 16 years in the banking industry, Kim Erick was looking to start a business of her own when she enrolled in Ben Robinson’s Bookkeeper Business Blueprint (renamed Bookkeeper Business Launch and now Bookkeeper Launch). When Tax Business Launch (now TaxBiz) opened just two months after she started, she wondered if tax preparers make enough money to justify the expense. She and her husband decided that they needed to spend money to make money. Kim was one of the first students to enroll in the new course in October 2017. At the time, she had only two bookkeeping clients for her brand-new business, Home Time Business Services.
So, did her decision to add tax prep classes pay off for Kim? In my first interview with Kim, she talked about how her tax prep business had changed her life for the better. By being able to offer both bookkeeping and tax preparation services, she opened the door to a new life for herself and her husband.
Do tax preparers make good money?
With the right training and a willingness to work, the answer is yes! I followed up with Kim in 2021. She had doubled her income each of the previous two tax seasons. She was making more than she had in her full-time banking job -working part-time.
Recently, I caught up with Kim again. She's now a tax preparer who makes good money working less than 30 hours a week. And her business has grown to the point where her husband works with her. They’ve built financial security. Now they have more time to pursue their goal of volunteering. They’ve relocated to another state, and the move was funded by Kim’s business.
Do you want to be a tax preparer making good money, too? What could you do if you knew you had a solid income that could grow with you and your family? Would it allow you time with your kids while they’re young? Family vacations? A bigger house? College funds? A secure retirement?
All of these are possible with a tax business. If you’re interested in changing your life and learning why tax preparers make good money, which tax services to offer, and how to do virtual tax prep online, I’ll share some information on that after I catch up with Kim.
Want to learn more about Kim's journey? Read our previous conversation!
So do tax preparers make good money? Yes! And you can be one of them. Let’s check in with Kim to learn more.
Hi, Kim! Thanks for taking the time to share this update!
In our previous interview, you told us About how you left banking to start your own business after 16 years. What led you to that choice?
Ability to have time freedom, better working hours. I was working in an in-store environment and we were open 7 days a week and late hours.
You took Ben Robinson’s bookkeeping and tax preparation courses at the same time. Would you recommend pairing them up to others?
Honestly, it was a lot of information and new stuff to take in at the same time. It would depend on the person and if they have any starting knowledge of either industry. Preparing taxes has made me a better bookkeeper and vice versa. Understanding both go hand in hand. Learning and being able to immediately implement it was key to being able to do both.
Do you feel the course material and support in TaxBiz have evolved with the needs of students, or are there areas where there could be improvements?
TaxBiz course material is updated annually because frankly the tax code changes every time Congress convenes and passes new laws. In 2021, there were over 30,000 changes to the tax code. It’s not realistic to expect a single source of all information, and you have to choose which area to focus your knowledge on.
Tax Biz focuses on business returns and personal returns for those business owners. It doesn’t teach non-profit or trust returns, and there isn’t much on international tax issues either. These specialized areas are not necessarily needed to run a successful business, but you do need to know how to turn away clients that you don’t have the training and knowledge to serve.
You mentioned in our pre-interview chat that your husband has joined your business. Do tax preparers make good enough money to allow for other changes?
Honestly, that has been a huge change! He’s currently working more on our business than in the business, but we hope to have him go through the most current version of Tax Biz to be up to speed for the upcoming season.
The other change is we moved states this year and relocated the business to the new state. Having a virtual firm allowed us to confidently make the move, knowing we could maintain our household financially with the business. Everyone has their own definition of success and financial security, but yes being a tax preparer has allowed us to make good money, working fewer hours. In our previous W2 positions he worked 50-70 hours a week and I was working 40+. Since settling into the business and developing processes, we make enough to confidently say we will be debt free within the next 2 years and that includes the mortgage of our new home (our last debt).
Where do most of your clients come from these days? Do you work mostly with long-term clients, or are you still building?
Initially, I grew through joining a chapter of BNI (Business Networking International). I still have many of my first year clients. These days, we grow from referrals from current clients and bookkeepers we have partnered with who don’t want to learn taxes. We have agreements to not solicit for any services they provide, and we get well-maintained books with which to prepare their tax returns. This past year, while some clients didn’t return, we still grew by 13 more returns over last year, which is a nice growth rate. We know which businesses won’t be returning when we file their final returns, but typically we keep their personal tax return business.
Which TaxBiz lessons, tools, or resources have been the most helpful to you in your business? Are there any that haven’t been especially useful to you?
The BEST lesson was in research. Tax truly is about being able to research versus having all the knowledge in your head. You can imagine with all the changes to the law that you might forget which year something started/stopped being a deduction.
There are also resources around pricing our services. Especially when starting out, many new to the profession will underprice themselves and then you end up losing those initial clients who were only with you because you were inexpensive. I lost a few when I started to raise my prices for them.
The only lessons that I never opened in Tax Biz were the marketing ones, they are very similar to the ones found in Bookkeeper Launch so there wasn’t a need to retake them. Personally, the Linked In lesson was least useful since I grew using in-person networking and referrals.
When you graduated, did you feel ready to make good money as a tax preparer? If not, what do you wish had been included to help you get ready to launch your business?
Absolutely! I started getting clients right away! As a matter of fact, I hadn’t even finished the bookkeeping course when I had 3 bookkeeping clients. I had finished the tax skills lessons prior to having clients though.
I would recommend completing the skills modules prior to attempting to complete a tax return for compensation. Most who don’t feel ready, have what is called imposter syndrome. They feel like they are going to be found as a fake or imposter in the industry.
The support of the community that has been created along with the prosper help desk is truly the biggest safety net one can receive when starting a business. You are definitely not in it alone. The prosper help desk is staffed with fellow bookkeepers and tax professionals who have become employees of bookkeepers.com (alongside their own businesses) to help others navigate through issues with clients.
My first bookkeeping clean up was a nightmare. The client was recording returns of merchandise as sales income and it was truly overstating his income by over $100,000. That saved him over $18,000 in taxes! But I couldn’t figure it out. I was so green (I hadn’t even finished the course completely) that I needed help. Having the tax knowledge along with the bookkeeping knowledge really does make you better at both!
They walked me through and helped me in a way that you won’t get in other courses. I would have had to tell the client I messed up your books even further, refunded their money and probably would have quit the business then and there. The safety net of them helping mentor me through the process was worth more than you can imagine.
You mentioned that I Love Bookkeeping, the bookkeepers.com podcast, is your favorite. Can you share some of your favorite a-ha moments or episodes?
I have to say, I loved the first ones of other bookkeeping professionals and hearing what challenges they were facing and Ben Robinson’s advice to help them talk through it. For example, I was on the show for one of the earlier episodes and was trying to decide whether or not to grow and hire/contract out work. Ben asked me “How many clients could you serve if you were working 40 hours a week?” And without even thinking I blurted out that I don’t want to ever work 40 hours a week. Well that sealed it for me and gave me so much clarity. Today I have 4-5 contractors working for me doing most of the bookkeeping work while I have been able to focus on just the tax side of the business. I still don’t work 40 hours!
Do you still find TaxBiz useful, or have you outgrown it with experience? If you’re still involved, what parts are most valuable to you at this point in your business? Can you explain why?
While I don’t necessarily go into the course regularly, I do take advantage of the community to post about oddities and challenging situations with clients. Additionally, I take advantage of the continuing education to get my Annual Filing Season Program courses completed. .
Do you feel tax preparers can make good money? How long did it take before you met your financial goals? Have these goals changed over time?
Yes, you can definitely make good money. I have exceeded my goals each time I have set one. I think you need to have goals in life and in business. To measure progress, they have to be SMART goals (Specific, Measurable, Actionable, Realistic, and Time Bound) Initially, I just wanted to replace my bank manager salary and cover health insurance costs. This took 23 months. Then it changed to replacing my husband’s income too. That happened in year 4. Now that we’ve exceeded these goals, we are working on goals to become more efficient by improving our processes and procedures. This will allow us to reach our personal goals of volunteering more.
You mentioned in a previous interview that you now do tax work year-round, and that 2020 changed things. Are things still impacted by the shutdowns?
We are still doing tax year-round. Business return extensions are due by September 15th and personal return extensions are due by October 15th. Then there are quarterly tax planning meetings. January will start up 1099 and W2/W3 preparation.
The biggest impact of the shutdowns was actually business owners realizing they needed bookkeeping and tax returns to take advantage of the governmental assistance offered.
What’s your favorite part of owning a tax biz? Has that changed over time?
My favorite part is helping business owners figure out how to pay less in taxes through tax planning. Taxes are stressful for so many business owners and when we are working together year-round through tax planning, it allows everyone to be on the same page and understand where they stand financially.
What would you change about your profession if you could instantly change anything?
Clients would have all their paperwork together in one place at one time. We have tools and portals for our clients, but it seems like they forget one and email it, or a vendor takes a while getting them a tax form and that means that they have almost everything. It’s a balancing act and having that attention to detail to ensure you don’t miss anything!
Can you share what a typical day in your business looks like? What does your work look like?
Truly there isn’t a typical day. We have certain days where we go into client’s books to classify and reconcile. Then there are other days where we are preparing taxes or tax plans. I don’t feel like there is ever a true routine. The nice part is, if a client hasn’t scheduled a meeting, my starting or ending time is up to me.
Do you have opportunities as a tax preparer you didn’t have when working in banking?
My business has changed my personal life by making time for the more important things! We are both able to volunteer more time in our ministry. In banking, we were living from paycheck to paycheck and had very little savings to fall back on for emergencies. Now, we have a nice cushion of savings and are able to set things aside. We typically are able to volunteer 30 hours a month. Increasing this time is our goal.
In one of your previous interviews with me, you mentioned that you always like to have goals. What are your current goals for your biz? Do you have an idea when you might achieve them?
Like I mentioned earlier, our goals for the business are to improve our efficiency in processes and tasks. So we are reviewing things as my husband is learning them. He’s really good at identifying redundancy and asking questions which allow us to revamp processes to improve. We’ve done a LOT of videos to be able to document these processes. As for when we might achieve this goal, I would say within the next 3 months we will have a new client portal with much automation deployed. My husband really enjoys the programming world, so he may even branch out and help others deploy the same software and automate their businesses too.
Are there any other points that you think would be valuable for someone interested in becoming a tax preparer who earns good money to be aware of?
They should like doing research!
Conclusion: Do Tax Preparers Make Good Money?
Something that impressed me about all three of my conversations with Kim Erick was how her business has grown to allow her and her husband financial security and the freedom to do the things they value. As a tax prep expert, she’s built her tax prep and bookkeeping biz using the skills she learned through TaxBiz and Bookkeeper Launch. You can read Kim's third interview here.
But can I become a well-paid tax preparer?
What Kim shared with me isn’t an isolated thing for graduates of Ben Robinson’s courses. I first learned about Ben when he contacted me about becoming an affiliate when he started Bookkeeper Business Launch. My team and I have reviewed each new version.
You can find all of our bookkeeping and tax prep posts here, gathered into one convenient place!
If you’re wondering how you can become a tax prep expert, TaxBiz provides a clear path. From the introductory videos that will let you know whether it’s a good fit for you, Ben has your success in mind. The course is thorough and the support is exceptional.
Ready to Make Good Money as a Tax Preparer?
Does the chance to build a new life alongside a business you love sound great to you? Now that you know the answer to “Do tax preparers make good money?” can be a big yes, are you ready to get started?
TaxBiz can show you how to provide tax prep for small businesses, to find a niche where you can become a tax prep expert with as many (or few) clients as you want. And it will show you how to do this without sacrificing your family life, too.
Do tax preparers make good money? If you still have questions after reading this interview, please ask away! My mission is to be sure you have the information you need to choose a work-from-home career that works – for you!