How to Price Tax Preparation Services: Fee Schedules, Per-Form Pricing and Profit

New tax preparers usually set prices one of two ways: copy the nearest chain office or undercut it. Neither tells you whether you will make money. A better approach is to know how long each type of return takes you, what your business costs to run, and what local clients will pay for expertise and year-round access. Here is how to build a fee schedule that works.

Typical tax preparation fees in 2026

These ranges are for independent preparers and small firms. They vary widely by region, credentials and client type, so check local competitors' published prices too.

Choose a pricing model

Whatever you choose, never base fees on the size of the refund. Contingent fees for original returns are generally prohibited under Circular 230, and they reward the wrong behaviour.

Step 1: Find your target hourly rate

Target hourly rate = (desired income + annual costs) ÷ realistic billable hours

Annual costs include professional software, per-return e-file charges, insurance, continuing education, research tools, your secure portal, marketing, office rent, seasonal staff and your own accountant. Billable hours are fewer than you think: most solo preparers bill 800-1,200 hours a year, concentrated between late January and mid-April.

Step 2: Time your returns

During your first season, log the full time for each return type, from the first appointment to e-file acceptance:

• ☐ Booking and intake
• ☐ Interview, including due diligence questions
• ☐ Data entry
• ☐ Review and diagnostics
• ☐ Client walkthrough and signatures (Form 8879)
• ☐ Transmission and reject handling
• ☐ Follow-up questions

The time for a simple W-2 return might be 60-90 minutes all in; a Schedule C return with messy records can easily take four hours or more.

Step 3: Price each return type

Minimum fee = hours × target hourly rate List price = minimum fee + margin for risk, judgement and value

Credits with due diligence requirements (EITC, child tax credit, AOTC and head of household) add interview time and record-keeping. Price that time in; do not absorb it.

A worked example

Priya runs a solo practice. She wants $75,000 a year from it and her annual costs are $20,000. She expects 1,000 billable hours.

($75,000 + $20,000) ÷ 1,000 = $95 per hour.

Her time logs from last season:

Last year she charged a flat $350 for any Schedule C return. With 60 of them averaging 4.5 hours, she was effectively earning $78 an hour on her most demanding work. Moving to $495 plus an organising charge raises that segment's revenue by at least $8,700 even if she loses a few price-sensitive clients, and frees time for higher-value work.

A sample fee schedule

``` INDIVIDUAL RETURNS (one federal + one state) Basic (W-2, standard deduction) $195 Family (dependents, credits, education, HSA) $325 Itemised deductions +$125 Investment sales (per 25 transactions) +$100 Self-employed (Schedule C, organised) +$275 Rental property, each +$175 Additional state +$95 Organising unsorted records $95/hour

BUSINESS RETURNS Partnership / S corporation from $1,200 C corporation from $1,500

OTHER Amended return from $225 Notice review and response from $175 Representation $175/hour Rush (under 48 hours, Feb 15 - Apr 15) +25% ```

Publish "starting at" prices on your website. They filter out bargain hunters and make phone calls shorter.

Pricing tactics that protect your season

1. Charge for disorganization. An hourly organising fee rewards clients who bring tidy records.
2. Use a deadline premium. Add a rush fee in the last weeks before April 15, or close new-client intake by a fixed date.
3. Raise prices every year. 5%-10% for returning clients is common; most will not notice.
4. Bundle year-round help. Offer self-employed clients an annual package with the return, quarterly estimates and notice support.
5. Disclose bank product fees separately. If you offer refund transfers, make the extra fee clear in writing before the client chooses.

Should you offer refund transfers?

Many clients, especially families expecting a refund, prefer to have the fee deducted from their refund rather than pay at the appointment. A refund transfer through a partner bank makes that possible. It also adds a bank fee for the client, and some states regulate these products and the disclosures you must give.

If you offer them:

• Quote your preparation fee first, then explain the transfer as an optional extra with its own fee.
• Give the fee disclosure in writing before the client chooses.
• Keep your preparation fee the same whether or not the client uses the product.
• Never set your fee as a percentage of the refund.

Pricing off-season work

Off-season services keep cash flowing from May to December and often pay better per hour than returns:

Common pricing mistakes

• Matching discount chains instead of competing on expertise and availability.
• Charging the same for a tidy Schedule C and a shoebox.
• Giving free notice help all year with no fee.
• Forgetting per-return software and e-file charges in costs.
• Never reviewing which return types are actually profitable.

Your next step

Pull your time logs (or estimate them honestly), calculate your target hourly rate, and fill in the minimum-fee column for each return type. Any service where your list price is below the minimum is losing you money. Fix those first, then publish your new schedule on your website before returning clients start booking.

The full guide, Starting a Tax Preparation Business, covers the rest of the practice: PTIN, AFSP and EFIN steps, state rules, engagement letters, due diligence, data security, workflow checklists, marketing and building year-round revenue, for $0.99.