How to Become a Successful Tax Preparer | Step-by-Step Guide for 2025

If you’ve been wondering how to become a tax preparer or even how to start a tax preparation business in 2025, you’re in the right place. Tax preparation is one of those careers that never goes out of style. People and businesses will always need help filing correctly and saving money where they can. Whether you’re looking for a flexible side hustle, a new career path, or a way to build your own tax preparation business from the ground up, the opportunities are wide open. In this guide, we’ll walk through what a tax preparer does, the exact steps to get started, how much you can make, and even how to attract clients so you can turn your tax skills into a profitable business.

Why tax preparation is a solid career in 2025

Why tax preparation is a solid career in 2025 comes down to two simple truths: taxes aren’t going anywhere, and most people don’t want to deal with them on their own. Every year millions of Americans scramble to figure out tax rules, forms, and deadlines, and many end up stressed, confused, or making costly mistakes.

That’s where tax preparers step in, offering clarity, saving time, and helping clients avoid penalties while often getting them bigger refunds. On top of that, the IRS reports steady growth in the need for qualified tax professionals, and with new tax law updates, more self-employed workers, and the rise of small businesses across the U.S., demand is only increasing.

Add the flexibility of working seasonally, remotely, or running your own firm, and it’s clear why tax preparation is not just a job, it’s a career path that can lead to stability, freedom, and even six-figure earning potential if you choose to build a business around it.

Demand for tax professionals (backed by data/stat)

The demand for tax professionals across the U.S. in 2025 has never been more robust, and the numbers tell a compelling story. According to the IRS, there are 831,932 individuals holding valid Preparer Tax Identification Numbers (PTINs)—a clear signal of the sheer volume of professionals ready to meet Americans’ tax needs year after year IRS.

Meanwhile, the IRS processed more than 266.6 million federal tax returns and supplemental documents during the 2024 fiscal year—161 million of which were individual income tax returns IRS. With the majority of those filings handled electronically, the need for expert preparers who understand both the paperwork and technology remains high.

From a market perspective, the industry continues to grow. In 2025, U.S. tax preparation services generated approximately $14.5 billion in revenue, marking steady expansion in response to rising demand for expert tax help IBISWorld. On the global stage, this market is poised for further growth, expected to reach $50 billion by 2031, driven largely by the complexity of tax regulations and the desire to reduce risk Precision Business Insights.

What does it all mean for aspiring tax professionals? More taxpayers filing especially complex returns and an expanding services market mean that becoming a tax preparer is not just a viable option; it’s in-demand, future-proof, and filled with opportunity. Whether you’re building a seasonal side gig, launching a full-time business, or scaling a firm, now is the perfect time to step into this growing field.

Quick overview of the steps

Getting started as a tax preparer doesn’t have to feel overwhelming. At a high level, the steps are simple: make sure you meet the eligibility requirements, apply for your PTIN and EFIN if you plan to e-file, decide whether you want additional certifications like EA or CPA, get trained on tax software and filing procedures, and start taking clients. Later, you can expand your skills, automate processes with AI, and grow your business for long-term success.

What Is a Tax Preparer?

A tax preparer is a professional who helps individuals and businesses prepare and file their tax returns accurately and on time. They make sense of complicated tax laws, identify deductions and credits, and ensure clients comply with federal and state regulations. Essentially, they take the stress out of tax season by handling paperwork, calculations, and electronic filings so their clients can avoid mistakes and penalties.

For example, imagine Sarah, a small business owner who runs an online boutique. She earns income from multiple sources and struggles to keep track of expenses, deductions, and quarterly tax payments. A tax preparer like you would review her financial records, ensure all deductions are claimed, file her return electronically, and even provide guidance on how to reduce her tax liability in future years. By doing this, you not only save Sarah time and stress but also provide peace of mind that her taxes are done correctly.

Difference between preparers vs. tax advisors vs. CPAs

While all three professionals—tax preparers, tax advisors, and CPAs—work with taxes, their roles, expertise, and responsibilities are different, and understanding these differences is key for anyone looking to start a tax career.

Tax Preparer

A tax preparer focuses primarily on preparing and filing tax returns for individuals or businesses. They make sure all forms are completed correctly, deadlines are met, and eligible deductions and credits are applied. For example, a tax preparer might help a freelancer file their federal and state returns each year, ensuring nothing is overlooked.

Tax Advisor

A tax advisor provides broader guidance on tax strategy, planning, and minimizing liabilities. They help clients make decisions throughout the year, not just at tax time, such as advising on retirement contributions, business structuring, or investment strategies to reduce taxes.

Certified Public Accountant (CPA)

Certified Public Accountants (CPAs) have the most comprehensive training and licensing requirements. They can perform all the duties of a preparer and advisor but also offer auditing, financial planning, and consulting services. CPAs often handle more complex tax situations, like corporate filings or multi-state tax issues, and can represent clients in front of the IRS if needed.

In short, a tax preparer is ideal for filing accurate returns, a tax advisor helps clients plan and reduce taxes strategically, and a CPA covers the full spectrum of tax, accounting, and financial services.

What Does a Tax Preparer Actually Do?

A tax preparer helps individuals and businesses navigate the complex world of taxes by preparing and filing accurate returns. They make sure clients meet deadlines, claim the right deductions and credits, and stay compliant with federal and state regulations.

Beyond just filing forms, tax preparers often provide guidance on recordkeeping, estimated payments, and planning for future tax years, making them an essential resource for anyone looking to manage their finances efficiently.

Core responsibilities

A tax preparer’s main job is to help clients complete and file their tax returns accurately and on time. This includes gathering financial documents, calculating taxable income, identifying deductions and credits, and submitting returns to the IRS and state agencies. They also double-check for errors, help clients avoid penalties, and answer questions about tax laws and filing procedures. Beyond filing, some preparers offer guidance on recordkeeping, estimated tax payments, and planning for the next tax year.

Individual vs. business clients

Tax preparers can specialize in helping either individuals or businesses. For individual clients, preparers handle personal income tax returns, claiming deductions, credits, and other benefits such as education or retirement contributions. When working with business clients, preparers manage more complex filings, including payroll taxes, business income, expense tracking, and corporate returns. Many tax professionals choose to work with both, which allows them to diversify income streams and gain more expertise.

Seasonal vs. year-round work

Tax preparation is often thought of as a seasonal job, with the busiest period occurring from January through April. During this time, preparers may work long hours to meet deadlines. However, many tax preparers maintain year-round work by offering bookkeeping services, financial planning guidance, tax planning for the next year, or business consulting. Building ongoing relationships with clients not only provides steady income but also helps establish a stronger reputation and repeat business.

Types of Tax Preparers

Tax preparers come in different forms, each with varying levels of training, certification, and responsibilities. Understanding the differences helps you decide which path fits your goals and the types of clients you want to serve.

PTIN Holders

PTIN holders are the most basic level of tax preparers. Anyone who prepares federal tax returns for compensation must have a Preparer Tax Identification Number (PTIN) issued by the IRS. This allows you to legally prepare and file returns, even if you don’t hold additional certifications.

Enrolled Agents (EA)

Enrolled Agents are federally licensed tax professionals authorized to represent taxpayers before the IRS. They pass a rigorous exam or have prior IRS experience, giving them the expertise to handle more complex tax issues, audits, and appeals.

Certified Public Accountants (CPA)

CPAs have extensive accounting and tax training, including passing the CPA exam and meeting state licensing requirements. They can prepare tax returns, provide financial consulting, and represent clients in complex tax matters, making them the most versatile professionals in the field.

Electronic Return Originator (ERO)

EROs are authorized to electronically file tax returns directly with the IRS. Most PTIN holders, EAs, and CPAs obtain this authorization to speed up filings and provide clients with faster refunds.

Annual Filing Season Program (AFSP) Participants

AFSP participants complete a voluntary IRS program designed to enhance their knowledge of tax law and demonstrate a commitment to continuing education. While they do not have the same representation rights as EAs or CPAs, they are recognized as qualified preparers with up-to-date knowledge.

Step-by-Step: How to Become a Tax Preparer

Becoming a tax preparer is easier than you might think when you know exactly what steps to take. Each stage builds your skills, credibility, and ability to serve clients successfully.

Check Eligibility Requirements

Before you do anything, make sure you meet the IRS requirements. You must have a valid Social Security number and a clean tax record, meaning no recent felonies or tax-related convictions. You also need to be at least 18 years old and legally allowed to work in the U.S. These are simple but crucial steps to avoid problems later.

Apply for a PTIN

The Preparer Tax Identification Number (PTIN) is your official license to prepare federal tax returns for pay. Applying is quick and online through the IRS website, and once approved, it’s valid for the entire tax season. Think of it as your professional ID—it tells clients and the IRS that you are authorized to handle tax filings.

Get an EFIN (if e-filing)

If you plan to file returns electronically, you’ll need an Electronic Filing Identification Number (EFIN). The IRS uses this to track who is submitting returns online. Applying for an EFIN involves a short background check and verification process, which can take a few weeks, so it’s smart to get this done early if you want to start accepting clients immediately.

Decide if You’ll Get Certified (EA, CPA, AFSP, etc.)

Certifications aren’t required to start, but they set you apart and allow you to take on more complex clients. Enrolled Agents (EAs) can represent clients in IRS audits, while Certified Public Accountants (CPAs) can handle accounting, auditing, and tax planning for businesses. The Annual Filing Season Program (AFSP) is a shorter, voluntary program that keeps you current on tax law and shows clients you’re serious about your craft. Choosing the right credential depends on the type of clients and services you want to offer.

Choose Your Tax Software

Your software is your workspace, so pick one that fits your style and client needs. Options like Drake, Lacerte, TaxSlayer Pro, and UltraTax CS make preparing and filing returns much faster. Many include built-in error checking, client management, and e-filing features. Spend some time exploring the options and even test a few free demos to see what feels most intuitive.

Get Training & Education

Even if you’re naturally good with numbers, professional training is essential. Training teaches you how to maximize deductions, understand new tax law changes, and avoid costly mistakes. You can take online courses, attend webinars, or use resources from the IRS and software providers. Ongoing learning ensures your services stay accurate and reliable year after year.

Practice with Real or Sample Returns

Before taking paying clients, practice with sample returns or volunteer to help friends or family. This helps you understand common tax scenarios, spot mistakes, and become comfortable with the software. By the time you start working with real clients, you’ll be confident and efficient.

Start Taking Clients (Solo or with a Firm)

Once you’re ready, you can start building your client base. You might begin by joining an established tax firm to learn from experienced preparers, or you can take the independent route and work directly with individuals and small businesses. Focus on excellent service, prompt communication, and accuracy—these will earn you referrals and long-term clients.

To make this process even easier, Kimberly’s ChatGPT Tax Business Planner gives you step-by-step guidance, daily tasks, and AI-powered prompts to launch and grow your tax business with confidence. It’s a hands-on tool designed to turn your skills into a structured, revenue-generating business quickly.

Skills You Need to Succeed

Being a successful tax preparer takes more than just knowing how to crunch numbers. Certain skills make the difference between a good preparer and a highly sought-after professional.

Communication Skills

Clear communication is critical. You need to explain complex tax concepts in a way clients actually understand. From gathering financial documents to walking clients through deductions, the ability to simplify tax jargon builds trust and keeps clients coming back.

Attention to Detail

Taxes are all about accuracy. Missing a deduction, inputting the wrong number, or filing a form incorrectly can cost clients money and damage your reputation. Cultivating strong attention to detail ensures every return is correct and complete.

Tech + Software Knowledge

Modern tax preparation relies heavily on software. Being comfortable with tools like Drake, Lacerte, TaxSlayer Pro, or UltraTax CS saves time, reduces errors, and allows you to handle more clients efficiently. Familiarity with cloud-based systems and secure file sharing is also essential for client safety and convenience.

Marketing & Client Acquisition

Many blogs skip this, but marketing is what turns your skills into a profitable business. You need to know how to find clients, create a professional online presence, and use social media, email, or local networking to grow your client base. Learning simple strategies for outreach can make the difference between a few seasonal clients and a thriving year-round business.

To make mastering these skills easier, Kimberly’s ChatGPT Tax Business Planner includes AI prompts and daily tasks specifically designed to help you improve communication, organize client work, and attract more clients. It’s a practical guide to building both your skills and your business at the same time.

Tools of the Trade

The right tools can make your work as a tax preparer faster, more accurate, and more professional. Using modern technology not only saves time but also helps you provide better service to your clients.

Tax Software

Professional tax software is the backbone of your business. Programs like Drake, TaxSlayer Pro, UltraTax CS, and Lacerte streamline filing, handle complex calculations, and include built-in checks to minimize errors. Choosing the software that fits your workflow and client needs is essential for efficiency and accuracy.

AI Tool

AI tools, such as ChatGPT, can help with everything from generating client emails and reminders to creating marketing content and automating repetitive tasks. These tools allow you to spend less time on administrative work and more time focusing on clients and growing your business.

CRM for Managing Clients

A Customer Relationship Management (CRM) system keeps all client information organized in one place. From tracking appointments to following up on documents, a CRM helps you stay on top of deadlines, improve communication, and maintain strong client relationships, which is key for repeat business.

Secure File Sharing Tools

Security is critical when handling sensitive financial information. Tools like Dropbox Business, Google Workspace, or secure client portals let you exchange documents safely and efficiently. This builds client trust and ensures compliance with privacy regulations.

Using the right mix of these tools, along with structured guidance from Kimberly’s ChatGPT Tax Business Planner, you can run your tax preparation business more smoothly, reduce mistakes, and offer a modern, professional experience that clients appreciate.

Do You Need a License?

To work as a tax preparer in the U.S., there are a few licensing requirements to be aware of. At the federal level, anyone preparing or assisting in preparing federal tax returns for compensation must have a Preparer Tax Identification Number (PTIN) issued by the IRS. The PTIN is your official authorization to prepare returns and must be renewed annually. It’s simple to apply online, and once approved, it allows you to legally handle federal filings for clients.

Some states also have additional licensing or registration requirements. For example, California, Oregon, and Maryland require state-level registration for tax preparers, while other states may have no extra rules beyond the PTIN. It’s important to check your specific state’s requirements before accepting clients to ensure compliance. You can find up-to-date information and links to each state’s regulations on the IRS website or through your state’s department of revenue.

Following both federal and state rules not only keeps you compliant but also builds trust with clients who want to know their preparer is fully authorized. Using Kimberly’s ChatGPT Tax Business Planner can help you keep track of licensing, PTIN renewal, and state-specific requirements so nothing slips through the cracks.

How Long Does It Take to Become a Tax Preparer?

The time it takes to become a tax preparer depends on the path you choose and how much training or certification you pursue. You can start quickly with basic credentials, or take longer if you pursue advanced certifications to expand your services and earning potential.

Quick Start vs. Advanced Certifications

For those just starting out, you can apply for a PTIN, complete some basic tax training, and begin preparing returns in a matter of weeks. This is ideal for seasonal work or getting immediate hands-on experience. If you choose to pursue advanced certifications like Enrolled Agent (EA), Certified Public Accountant (CPA), or participate in the Annual Filing Season Program (AFSP), it can take several months to over a year depending on study time and exam schedules. These certifications allow you to handle more complex clients and increase your credibility and income potential.

Seasonal vs. Year-Round Options

Many tax preparers focus on seasonal work, handling the bulk of returns from January through April. However, those who expand their skills, offer bookkeeping, tax planning, or advisory services can maintain a year-round business. Working beyond the tax season provides consistent income, strengthens client relationships, and creates opportunities for growth.

How Much Can You Make as a Tax Preparer?

Income potential is one of the most appealing aspects of a career in tax preparation, and it varies depending on experience, services offered, and business model.

Average Salary (Entry vs. Experienced)

Entry-level tax preparers typically earn between $30,000 and $45,000 per year, depending on their location and the number of clients they handle. Experienced preparers, especially those with certifications like EA or CPA, can earn $60,000 to $90,000 annually, or more if they manage a large client base or specialize in complex returns.

Factors That Affect Earnings

Several factors influence how much a tax preparer can make. Location plays a role—urban areas often have higher-paying clients than rural regions. Your niche matters too; focusing on small business clients, high-income individuals, or specialized industries can significantly increase fees. Offering additional services like bookkeeping, financial planning, or consulting can also boost revenue.

Income Potential if You Build a Firm

If you expand from solo work to running your own tax firm, your earning potential grows exponentially. Hiring staff, taking on multiple client segments, and offering year-round services can turn your tax business into a full-scale operation capable of generating six-figure income or more.

How Much Should You Charge?

Setting the right price is key to building a profitable tax preparation business while keeping clients happy. How you charge depends on your experience, services, and client base.

Hourly vs. Per Return Pricing

Many preparers charge per tax return, which is common for individual filings. For example, simple individual returns may range from $100–$300, while more complex returns for self-employed clients or small businesses can reach $500 or more. Hourly rates are also an option, particularly for advisory services, tax planning, or bookkeeping, and typically range from $50–$150 per hour depending on experience and location.

Competitive Rates

IRS surveys and industry data suggest that the average tax preparer charges around $220–$250 for an individual tax return, but rates vary widely based on complexity and region. Research your local market and adjust your pricing to remain competitive while reflecting your expertise and value.

Ways to Increase Revenue

Revenue isn’t just about filing returns. Offering bundled services, like tax filing plus bookkeeping or financial planning, can increase client spend. Serving business clients or specialty niches like real estate or freelancers also allows for higher fees. The key is to provide additional value that clients are willing to pay for while keeping your services organized and efficient.

Marketing Your Tax Preparation Business

Attracting clients is one of the most important steps to growing a successful tax preparation business. A smart marketing strategy combines local outreach with online presence to reach the right audience.

How to Find Your First Clients

Start small by tapping into your existing network. Friends, family, and colleagues can be your first clients and provide valuable referrals. Offering discounts for referrals or a free initial consultation can help you build trust quickly. Volunteer to prepare returns for community groups or nonprofits—this not only builds experience but also introduces you to potential paying clients.

Local Marketing

Traditional local marketing still works. Distribute flyers at community centers, libraries, or coworking spaces. Attend local events, fairs, and business networking meetings to introduce yourself and share your services. Business cards and simple brochures highlighting your expertise can make a strong impression and keep your services top-of-mind.

Digital Marketing

An online presence is essential. Claim and optimize your Google Business Profile so clients can find you easily when searching for tax preparers in your area. Run targeted Facebook or Instagram ads to reach specific client types like freelancers or small business owners. A simple, professional website that explains your services, includes client testimonials, and allows booking or contact forms can convert visitors into paying clients.

Common Challenges for New Tax Preparers

Starting a tax preparation business comes with its own set of hurdles, but knowing what to expect helps you prepare and overcome them efficiently.

Seasonality

Taxes are seasonal by nature, with the busiest period from January through April. Many new preparers struggle with fluctuating income and downtime during off-season months. Planning ahead by offering year-round services, like bookkeeping, tax planning, or advisory sessions, can smooth out income and keep your business active throughout the year.

Staying Up to Date with Tax Laws

Tax laws change frequently, and staying current is critical to avoid mistakes. Missing new regulations or deductions can cost clients money and damage your reputation. Regular training, IRS updates, and using professional resources ensure you remain informed and provide accurate services.

Competing with Big Box Tax Firms

Large chains often dominate the market with aggressive advertising and brand recognition. New preparers can compete by offering personalized service, faster response times, flexible scheduling, and a deep understanding of each client’s unique situation. Personal attention often outweighs generic services provided by big firms.

Client Retention Strategies

Keeping clients year after year is essential for a thriving business. Building trust through transparency, timely communication, and consistent service helps maintain long-term relationships. Sending reminders, follow-ups, and offering value-added services like tax planning can increase loyalty and referrals.

Kimberly’s ChatGPT Tax Business Planner provides strategies and daily action prompts to address these challenges, helping new tax preparers stay organized, attract clients, and retain them while navigating the ups and downs of the tax business.

Continuing Education & Growth

Growing as a tax preparer doesn’t stop after you start filing returns. Continuing education, staying up to date with technology, and seeking mentorship are key to long-term success.

IRS Continuing Education Requirements

The IRS requires certain tax preparers, such as those participating in the Annual Filing Season Program (AFSP), to complete continuing education (CE) each year. These courses cover updates in tax laws, ethics, and preparation techniques. Meeting CE requirements not only keeps you compliant but also enhances your credibility with clients.

AI and Automation for Scaling

Technology can transform your business by automating repetitive tasks, streamlining client communication, and generating content for marketing. Using AI tools like ChatGPT allows you to create workflows, reminders, and templates that save hours each week. By leveraging automation, you can handle more clients without sacrificing quality.

Coaching and Mentorship Opportunities

Learning from experienced professionals accelerates growth and reduces mistakes. Kimberly offers coaching and mentorship to guide you through building and scaling a tax business efficiently. With personalized advice, practical tips, and strategies to attract clients, her guidance helps you reach your goals faster.