Tax Preparation Business Plan: Free Template, Sample Plan and Startup Costs (2026)

By The Zarla Team · Updated October 2026

Typical startup costs of $5,295–$14,898, what owners really earn, the licenses you'll need in the US, how to write every section, and a complete sample plan for Northbank Tax & Bookkeeping — free to download as a Word template or PDF, or make it yours in five questions.

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Tax preparation business plan at a glance

Starting a tax preparation business in the US typically costs $5,295–$14,898. Typical monthly costs run $493–$1,317 before owner pay and tax. The average fee for a basic Form 1040 in NATP's 2025 fee study — $185 from a non-credentialed preparer, $228 from an enrolled agent, $280 from a CPA: $185–$280.

Licenses and permits in the US (5 in all): the PTIN and the EFIN; state preparer registration; and due diligence, the security plan and the IRS's rules — the rules vary by state.
The plan: eleven sections, from the executive summary to what a lender, a landlord or an investor will ask for, written from five questions — free, no sign-up to write it.
The sample plan on this page: Northbank Tax & Bookkeeping, Columbus, OH — a fictional tax preparation business, individual and small-business tax returns prepared in person or online, year-round bookkeeping, and a preparer who picks up the phone in April.
The first 30 days: 9 steps, starting with “Get the PTIN, apply for the EFIN and book the fingerprinting; check your state's preparer rules”.
Downloads: the fill-in template as Word and PDF, and the sample plan as PDF — free, no email address.

Facts checked October 22, 2026. Every figure is a published US range, not a quote; the sources are listed on this page, which covers how to write a tax preparation business plan, the complete sample plan and the free template.

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The numbers first

$5,295–$14,898to start a tax preparation businessTypical US range, required lines

$185–$280the average fee for a basic Form 1040 in NATP's 2025 fee study — $185 from a non-credentialed preparer, $228 from an enrolled agent, $280 from a CPA

$54,920the May 2025 US median pay for employed tax preparers (BLS) — a survey that leaves out the self-employed, who own most one-person practices

$650the IRS's penalty per failure to do the due diligence on a credit — up to $2,600 on one return filed in 2026

Startup costs

What it costs to start a tax preparation business

Typical US ranges, whole dollars. Optional lines are marked and left out of the total. The struck-through lines are what a Zarla plan covers, with the reason beside each; the generator turns this table into your own list.

Tax preparation business startup costs
Item	Low	High
A PTIN from the IRS, and an EFIN (free, with free electronic fingerprinting)The IRS's PTIN fee is $18.75 for 2026 and 2027 ($19.75 a year from 2021 to 2025); the EFIN application is free, takes up to 45 days, and the IRS's vendor fingerprints you at no charge.	$19	$19
The IRS Annual Filing Season Program: 18 hours of continuing educationSequoia CPE's 18-hour AFTR package is $79.50 and Gleim's $89.95 — the six-hour refresher course and exam, two hours of ethics and ten of tax law. The IRS charges nothing for the program itself.	$80	$90
State preparer registration, where your state has oneMost states have none. California's CTEC registration is the most: a 60-hour course ($399 self-study at Pronto Tax School), the $100 application plus $2, the $33 registration plus $2, and a $5,000 surety bond ($25 a year at SuretyBonds.com), plus a Live Scan background check. New York charges $100 a year once you prepare ten returns; Maryland $65 for its exam and $100 for two years; Oregon $60 and $50 for its exam, $85 for the license; Connecticut $100 for two years.	$0	$561
Professional tax software with every state (unlimited individual returns)Drake Tax 1040, single user, unlimited individual returns, is $2,075 through November 30, 2026 ($2,195 list); Drake Tax Pro, single user, unlimited individual and business returns, is $2,695 ($2,845 list). Drake's pay-per-return is $379.99 for the first ten returns, then $49.99 an individual return and $74.99 a business return — the price for a first, tiny season.	$2,075	$2,695
A computer, two monitors, a scanner, a printer, a shredder and a file cabinetA planning range.	$1,200	$3,000
The written security plan, encryption, a password manager and backupsA planning range — the plan itself is Publication 5708's template; the tools are subscriptions.	$100	$400
Insurance (first year): errors and omissions, liability and cyber at the topInsureon's tax-preparer medians: errors and omissions $34 a month ($411 a year; $500,000 per occurrence), general liability $29 a month ($350 a year), cyber $53 a month ($636 a year; June 23, 2025).	$411	$1,397
A secure client portal with e-signature (first season)A planning range.	$200	$700
Business registration (LLC) and EINAn LLC is $40 in Kentucky and $300 in Texas; the EIN is free. California adds an $800 yearly LLC tax on top of its filing fee.	$40	$300
Launch marketing: signage, a neighborhood mailer and January adsA planning range — the Google Business Profile is free.	$300	$1,500
The enrolled agent exam, if you sit it: three parts and the enrollment fee (optional)Optional — typically $1,091–$1,591. PSI's Special Enrollment Examination is $317 a part (three parts; PSI took over from Prometric on March 1, 2026) and the IRS's Form 23 enrollment fee is $140; a review course is a planning range of about $500.	$0	$0
A seasonal office or a shared desk for the filing season (four months) (optional)Optional — typically $1,200–$4,800. A planning range — $300 to $1,200 a month for a shared desk or a small room from January through April.	$0	$0
Website with the services, the secure upload link and Google Business ProfileIncluded with ZarlaYour Zarla plan includes the website — the services and prices from, the document checklist, appointment booking and the link to your secure upload — and walks you through your Google Business Profile. Having one built typically costs $1,000 to $2,000 from a freelancer.	$0	$2,000
Working capital: two months of running costsTwo months of the monthly lines below other than card fees — software, insurance, the portal, continuing education and renewals, the phone, marketing and supplies — because the season's money arrives from February to April and the software is paid in the fall.	$870	$2,236
Typical total (required lines)	$5,295	$14,898

Startup ranges: the IRS's PTIN top FAQ ($18.75 for 2026 and 2027; $19.75 from 2021 to 2025) and "Become an authorized e-file provider" page (no fee; up to 45 days; Livescan fingerprinting through the IRS's vendor at no charge for non-credentialed principals), Sequoia CPE's AFTR package ($79.50) and Gleim's AFSP 18-hour bundle ($89.95), CTEC's "How to become a tax preparer in California" (60-hour course; $5,000 bond; Live Scan; $100 application plus $2; January 29, 2026), SuretyBonds.com's California tax preparer bond guide ($25 for one year; $33 registration plus $2), Pronto Tax School's 2026 CTEC 60-hour course ($399 self-study early bird), New York's tax return preparer registration page ($100 for commercial preparers of ten or more returns), Maryland's Board of Individual Tax Preparers ($65 exam; $100 registration for two years), the Oregon Board of Tax Practitioners ($60 exam application; $50 proctoring; $85 initial license; $110 renewal), Connecticut's Department of Revenue Services ($100 permit for two years; the AFSP record required), Drake Software's pricing page (Drake Tax 1040 single user $2,075, list $2,195; Drake Tax Pro single user $2,695, list $2,845; pay-per-return $379.99 for ten returns, then $49.99 individual and $74.99 business; through November 30, 2026), Insureon's tax preparer insurance cost page (errors and omissions $34 a month, $411 a year; general liability $29 a month, $350 a year; cyber $53 a month, $636 a year; June 23, 2025), the IRS's enrolled agent pages and PSI's exam fee ($317 a part from March 1, 2026; Form 23 enrollment $140), Kentucky's Secretary of State fee schedule ($40 for an LLC), Texas Business Organizations Code §4.154 ($300) and California's $800 annual LLC tax (Revenue and Taxation Code §17941) — checked October 22, 2026. Ranges are what a small operation typically pays in the US; replace them with real quotes as you get them.

Monthly costs

What it costs to run each month

Typical monthly operating costs for a small operation, before the owner's own pay.

Cost	Typical monthly range
Professional tax software, by the month	$173–$225
Errors and omissions, with general liability and cyber at the top	$34–$116
The client portal, e-signature and the security tools (included with Zarla)	$20–$60
Continuing education, the PTIN and state registration renewals, by the month	$8–$17
Phone, internet and the e-fax	$60–$150
Ads, signs and the mailer, averaged over the year	$100–$400
Paper, toner, folders, envelopes and postage	$40–$150
Card fees (on about $5,800 of returns and bookkeeping)	$58–$199

Typical total: $493–$1,317 a month. Monthly ranges: Drake Software's pricing page, Insureon's tax preparer insurance cost page, the AFSP course prices, the IRS's PTIN fee and New York's registration fee (above), and Square's pricing page (ACH bank transfer 1%; card invoices 3.3% + 30¢; October 2026) — checked October 22, 2026. Lines marked (included with Zarla) are what those tools cost separately — with Zarla they are part of one monthly plan.

How much a tax preparation business makes

A tax preparer earns per return in a twelve-week season, so the fee schedule and the number of returns are the whole model. NATP's 2025 fee study puts a basic Form 1040 with Schedules 1 to 3 at $185 from a non-credentialed preparer, $228 from an enrolled agent and $280 from a CPA, a Schedule C at $123 to $135 and a Schedule A at $53 to $61 on top, business returns at a $634 average minimum, and the hourly rate at $182; 83% of preparers raise fees every year or two. Two hundred and forty returns at $200 on average — between the non-credentialed and the enrolled-agent fee — is $48,000 in the season, and six bookkeeping clients at $300 a month is $21,600 across the year: $69,600, about $5,800 a month averaged over the year, and about $4,500 to $5,300 a month before the owner's own pay once the monthly lines below are paid, because the preparer's February-to-April is the cost. Employed tax preparers earned a May 2025 median of $54,920 (BLS), in a wage survey that does not include the self-employed — who own most one-person practices and earn what their fee schedule and their client count say.

$185–$280 — the average fee for a basic Form 1040 in NATP's 2025 fee study — $185 from a non-credentialed preparer, $228 from an enrolled agent, $280 from a CPA
$54,920 — the May 2025 US median pay for employed tax preparers (BLS) — a survey that leaves out the self-employed, who own most one-person practices
$650 — the IRS's penalty per failure to do the due diligence on a credit — up to $2,600 on one return filed in 2026

Prices and earnings: NATP's 2025 tax preparation fee study as Accounting Today reports it (basic Form 1040 with Schedules 1 to 3: $185 non-credentialed, $228 enrolled agent, $280 CPA; Schedule A $53 to $61; Schedule C $123 to $135; business returns a $634 average minimum; $182 an hour; 83% raise fees every one to two years; December 23, 2025) and the Bureau of Labor Statistics' May 2025 occupational wage data for tax preparers via O*NET (median $54,920; 95,800 employed; the survey excludes the self-employed) — checked October 22, 2026.

Rules: the IRS's PTIN requirements and top FAQ, the e-file provider page (above), the IRS's Annual Filing Season Program pages (18 hours; limited representation rights), the IRS's EITC news and updates for paid preparers (the §6695(g) penalty of $650 per failure for returns filed in 2026; up to $2,600 on one return), IRS news release IR-2026-92 (August 18, 2026: federal law requires tax and accounting professionals to create and maintain a written information security plan; Publication 5708's template), the FTC Safeguards Rule (16 CFR Part 314), Treasury Circular 230, CTEC's, Oregon's, Maryland's, New York's and Connecticut's preparer pages (above), Insureon's tax preparer insurance cost page, Kentucky's Secretary of State fee schedule, Texas Business Organizations Code §4.154 and California Revenue and Taxation Code §17941 — checked October 22, 2026.

Licenses and permits

Licenses, permits and insurance for a tax preparation business

What you need before you can legally trade in the US. Rules vary by state and city — confirm each item with your local licensing office and an accountant.

Requirement	What it means
The PTIN and the EFIN	In the US anyone paid to prepare a federal return needs a Preparer Tax Identification Number from the IRS ($18.75 for 2027, renewed every year by December 31, with a check-box attesting to your written security plan), and anyone filing returns electronically needs an Electronic Filing Identification Number from the IRS's e-file application — free, up to 45 days, with electronic fingerprinting at no charge for preparers who aren't attorneys, CPAs or enrolled agents. The Annual Filing Season Program (18 hours of continuing education a year, including a six-hour refresher and exam) is voluntary, but it puts you in the IRS's preparer directory and gives limited rights to represent clients on returns you prepared; without a credential you cannot represent a client before the IRS beyond that.
State preparer registration	In the US most states — Ohio included — don't register tax preparers; the ones that do are the plan's biggest licensing line. California's CTEC requires a 60-hour course, a $5,000 surety bond, a Live Scan background check, a $100 application and a $33 registration (each plus $2), and 20 hours of continuing education a year; Oregon licenses preparers after an 80-hour course and an exam ($60 application, $50 proctoring, $85 license, $110 to renew, 30 hours of education a year); Maryland registers them for two years ($65 exam, $100 registration, 16 hours of education); New York charges $100 a year once you prepare ten returns, with free state coursework; Connecticut issues a two-year $100 permit that requires the AFSP record. Check your state's rules before the first paid return.
Due diligence, the security plan and the IRS's rules	In the US a paid preparer who claims the earned income credit, the child tax credits, the American opportunity credit or head-of-household status must complete Form 8867 and keep the records — the penalty is $650 per failure for returns filed in 2026, up to $2,600 on one return; federal law (the FTC Safeguards Rule, which treats tax preparers as financial institutions whatever their size) requires a written information security plan, which the IRS reminded every preparer of in August 2026 and asks about on the PTIN renewal; every return you sign carries your PTIN; and preparers are liable for understatements from unreasonable positions. Representation before the IRS — audits, collections — belongs to enrolled agents, CPAs and attorneys under Circular 230; the enrolled agent exam (three parts, $317 each, plus a $140 enrollment fee) is the preparer's route to it.
Business registration and sales tax	In the US you register the business (an LLC is $40 in Kentucky and $300 in Texas, and California adds an $800 yearly LLC tax on top of its filing fee), take a free EIN and get a city business license where one is issued; tax preparation is a professional service that most states don't tax, and a few states tax services generally — ask your state's revenue department, and confirm the entity choice with your accountant.
Insurance	In the US errors and omissions insurance (Insureon's tax-preparer median is $34 a month for $500,000 per occurrence) pays for the return you got wrong and the penalty the client is charged, cyber insurance ($53 a month) for the breach of a file cabinet's worth of Social Security numbers, and general liability ($29 a month) for the client who slips in your office; no state requires them, and every client with a letter from the IRS will ask whether you have them.

How to write it

How to write a tax preparation business plan

The sections a lender, a landlord or an investor expects to see — and what goes in each one for a tax preparation business. Northbank Tax & Bookkeeping's sample plan below follows this outline exactly.

Executive summary

One page, written last: what the business is, where it trades, who it serves, what it costs to start — typically $5,295–$14,898 for a tax preparation business — and where that money is coming from. Someone who reads nothing else should still know the whole plan. For Northbank Tax & Bookkeeping below, that page says: individual and small-business tax returns prepared in person or online, year-round bookkeeping, and a preparer who picks up the phone in April in Columbus, OH, $9,097 to start.

Products and services

What you offer and how you charge for it. For a tax preparation business that usually means individual tax returns (Form 1040) with state returns; self-employed and small-business returns (Schedule C); and s corporation and partnership returns. Keep the base offer simple and price the add-ons separately.

Market analysis

Who pays, and why they'd pick you: working families with a W-2, a mortgage and kids who want a person, not an app; self-employed people and gig workers with 1099s, mileage and a home office. Name the two or three local competitors a customer would compare you with and the one thing you do better. Skip the market-size statistics — a lender wants your customers, not the industry's.

Marketing strategy

How those customers find you: referrals from every client whose refund arrived without a letter — tax clients are the most loyal there are; Google Business Profile and Google — “tax preparer near me” and “tax preparation” plus your city, in January; and bookkeeping clients who become tax clients, and small-business owners who send their staff. Put a cost and an expected result beside each channel, and say which one you'll start with.

Operations plan

The week to week, plainly: a PTIN renewed every December, an EFIN from the IRS's e-file application, and the Annual Filing Season Program record of completion; professional software with every state, a secure client portal for documents and e-signatures, and encrypted backups; and a written information security plan on the IRS's template, multi-factor sign-in, a locked file cabinet and a shredder. If the plan can't say who does what on an ordinary Tuesday, it isn't finished.

Startup costs

Every line you'll spend before you start, with a running total — typically $5,295–$14,898 for a tax preparation business, and the two biggest lines (a computer, two monitors, a scanner, a printer, a shredder and a file cabinet; professional tax software with every state) move it most. The table above is the starting list; replace each range with a real quote as you get one.

Financial plan

Typical monthly costs ($493–$1,317 a month for a small tax preparation business, before your own pay), the monthly sales you're aiming for (Northbank Tax & Bookkeeping plans on $5,800 a month), and how many months it takes to recover the startup budget. Use ranges until you have quotes, and never invent a revenue forecast to make the page look full.

Milestones, risks and the appendix

The first 30 days as a dated to-do list. Northbank Tax & Bookkeeping's begins: get the PTIN, apply for the EFIN and book the fingerprinting; check your state's preparer rules. Then the risks, said out loud: the season is twelve weeks: most of the year's income lands between February and April, and the software was paid for in November. Then the licenses and permits you'll need, and what a lender will ask for beyond the plan: two years of personal tax returns and a personal financial statement, for a start.

The sample plan

Northbank Tax & Bookkeeping is a fictional tax preparation business in Columbus, OH — individual and small-business tax returns prepared in person or online, year-round bookkeeping, and a preparer who picks up the phone in April. The plan below is exactly what the free generator writes from five answers, in the outline above, with every number calculated from the figures on this page rather than invented. Read it as a worked example, then make it yours.

Make this plan mine Download the template (Word)Download the template (PDF)Download this sample (PDF)

Business plan

Sample plan · fictional business

A complete tax preparation business plan: Northbank Tax & Bookkeeping

Columbus, OH · Startup plan · a fictional tax preparation business, written by the free generator from five answers

Executive summary

Northbank Tax & Bookkeeping is a new tax preparation business in Columbus, OH offering individual tax returns (Form 1040) with state returns; self-employed and small-business returns (Schedule C); s corporation and partnership returns; prior-year and amended returns; year-round bookkeeping and quarterly estimates; and IRS letters and notices explained and answered. The model is one preparer with a PTIN and an EFIN, the IRS's Annual Filing Season Program record and professional software, preparing about 240 individual and small-business returns in the season from a home office and keeping a handful of bookkeeping clients the rest of the year.

Startup budget: $9,097 across 12 items, funded from savings. Target: $5,800 in monthly sales.

Twelve months from now, success looks like this: About $5,800 a month averaged over the first year — 240 returns in the season at $200 on average and six bookkeeping clients at $300 a month the whole year — with the enrolled agent exam passed by the fall and the second season's returns booked by January

Products and services

Northbank Tax & Bookkeeping's core service is individual tax returns (Form 1040) with state returns. Every return is prepared by appointment, by video or from documents uploaded to a secure portal, priced from a fee schedule under an engagement letter, filed electronically under the preparer's EFIN, and backed by the Form 8867 due-diligence file on every credit it claims.

Individual tax returns (Form 1040) with state returns
Self-employed and small-business returns (Schedule C)
S corporation and partnership returns
Prior-year and amended returns
Year-round bookkeeping and quarterly estimates
IRS letters and notices explained and answered

Market analysis

The customers are working families with a W-2, a mortgage and kids; self-employed people and gig workers with 1099s and a home office; small businesses that need the business return and the bookkeeping; retirees with pensions, brokerage statements and a rental; and first-time filers who want the return explained in plain English.

Working families with a W-2, a mortgage and kids who want a person, not an app
Self-employed people and gig workers with 1099s, mileage and a home office
Small businesses — a contractor, a salon, a food truck — that need the business return and the bookkeeping
Retirees with pensions, brokerage statements and a rental
Immigrant families and first-time filers who want the return explained in plain English

Marketing strategy

Most clients will come by word of mouth — last year's clients, and the bookkeeping clients who become tax clients — and the rest find Northbank Tax & Bookkeeping on Google in January — “tax preparer near me” plus the city — so the Google Business Profile, the reviews and a website with the services, the document checklist and appointment booking decide whether a search becomes a return.

Referrals from every client whose refund arrived without a letter — tax clients are the most loyal there are
Google Business Profile and Google — “tax preparer near me” and “tax preparation” plus your city, in January
Bookkeeping clients who become tax clients, and small-business owners who send their staff
Yard signs, a mailer to the neighborhood and the community center in filing season
Partnerships with a payroll bookkeeper, an insurance agent and a real estate agent who send clients
A website with the services, prices from, the document checklist, the secure upload and the appointment booking

Operations plan

The owner is the preparer, the bookkeeper and the front desk in year one: the PTIN renewed every December and the EFIN kept in good standing, the software and the secure portal, a written security plan and a locked cabinet, due diligence on every credit, engagement letters and payment before filing, and the continuing education done by summer.

A PTIN renewed every December, an EFIN from the IRS's e-file application, and the Annual Filing Season Program record of completion
Professional software with every state, a secure client portal for documents and e-signatures, and encrypted backups
A written information security plan on the IRS's template, multi-factor sign-in, a locked file cabinet and a shredder
Returns prepared by appointment in person, by video or from uploaded documents; Form 8867 due diligence on every credit it covers
Engagement letters and prices from a fee schedule; payment before the return is filed
Bookkeeping clients on a monthly fee the rest of the year; continuing education done by summer

Startup costs

What it will take to open the doors, funded from savings.

Startup costs
Item	Amount
A PTIN from the IRS, and an EFIN (free, with free electronic fingerprinting)	$19
The IRS Annual Filing Season Program: 18 hours of continuing education	$85
State preparer registration, where your state has one	$281
Professional tax software with every state (unlimited individual returns)	$2,385
A computer, two monitors, a scanner, a printer, a shredder and a file cabinet	$2,100
The written security plan, encryption, a password manager and backups	$250
Insurance (first year): errors and omissions, liability and cyber at the top	$904
A secure client portal with e-signature (first season)	$450
Business registration (LLC) and EIN	$170
Launch marketing: signage, a neighborhood mailer and January ads	$900
Website with the services, the secure upload link and Google Business Profile	$0
Working capital: two months of running costs	$1,553
Total	$9,097

Typical range to start a tax preparation business in the US: $5,295–$14,898. Your list is what you decided to spend — replace estimates with real quotes as you get them. Website with the services, the secure upload link and Google Business Profile: Your Zarla plan includes the website — the services and prices from, the document checklist, appointment booking and the link to your secure upload — and walks you through your Google Business Profile. Having one built typically costs $1,000 to $2,000 from a freelancer.

Financial plan

The numbers below come from your own startup list and typical monthly costs for a one-preparer tax practice in the US. Startup is the software, the computer and office, insurance and the registrations; the monthly lines are the software, insurance, the portal and the renewals; and the fee schedule times the number of returns — plus the bookkeeping that carries the off-season — decides what is left after the season.

Typical monthly operating costs for a tax preparation business: $493–$1,317 a month, before the owner's own pay.

At $5,800 in monthly sales, Northbank Tax & Bookkeeping would clear $4,483–$5,307 a month before owner pay and tax, and recover the $9,097 startup budget in roughly 2–3 months.

Typical monthly operating costs
Cost	Typical range
Professional tax software, by the month	$173–$225
Errors and omissions, with general liability and cyber at the top	$34–$116
The client portal, e-signature and the security tools (included with Zarla)	$20–$60
Continuing education, the PTIN and state registration renewals, by the month	$8–$17
Phone, internet and the e-fax	$60–$150
Ads, signs and the mailer, averaged over the year	$100–$400
Paper, toner, folders, envelopes and postage	$40–$150
Card fees (on about $5,800 of returns and bookkeeping)	$58–$199

US ranges for a small operation; replace with your own figures as you learn them. Lines marked (included with Zarla) are what those tools cost separately — with Zarla they are part of one monthly plan.

Risks and honest downsides

Every tax preparation business plan should say out loud what can go wrong. For Northbank Tax & Bookkeeping, the real risks are:

The season is twelve weeks: most of the year's income lands between February and April, and the software was paid for in November
One wrong credit claim without Form 8867 is a $650 penalty per credit, and a pattern of them is an IRS visit
A stolen laptop or a phished password is a breach of every client's Social Security number, and the law already required a security plan
Hours don't scale in April: 240 returns is the owner's season, and growth means a seasonal preparer under your EFIN
Clients leave when the preparer who did their return last year isn't the one answering the phone this year
Fee pressure from software and franchises: the $185 basic return is the market, and the value is in the Schedule C and the bookkeeping

Licenses, permits and insurance

What Northbank Tax & Bookkeeping needs before it can legally trade in the US. Rules vary by state and city — confirm each item with your local licensing office and an accountant.

The PTIN and the EFIN — In the US anyone paid to prepare a federal return needs a Preparer Tax Identification Number from the IRS ($18.75 for 2027, renewed every year by December 31, with a check-box attesting to your written security plan), and anyone filing returns electronically needs an Electronic Filing Identification Number from the IRS's e-file application — free, up to 45 days, with electronic fingerprinting at no charge for preparers who aren't attorneys, CPAs or enrolled agents. The Annual Filing Season Program (18 hours of continuing education a year, including a six-hour refresher and exam) is voluntary, but it puts you in the IRS's preparer directory and gives limited rights to represent clients on returns you prepared; without a credential you cannot represent a client before the IRS beyond that.
State preparer registration — In the US most states — Ohio included — don't register tax preparers; the ones that do are the plan's biggest licensing line. California's CTEC requires a 60-hour course, a $5,000 surety bond, a Live Scan background check, a $100 application and a $33 registration (each plus $2), and 20 hours of continuing education a year; Oregon licenses preparers after an 80-hour course and an exam ($60 application, $50 proctoring, $85 license, $110 to renew, 30 hours of education a year); Maryland registers them for two years ($65 exam, $100 registration, 16 hours of education); New York charges $100 a year once you prepare ten returns, with free state coursework; Connecticut issues a two-year $100 permit that requires the AFSP record. Check your state's rules before the first paid return.
Due diligence, the security plan and the IRS's rules — In the US a paid preparer who claims the earned income credit, the child tax credits, the American opportunity credit or head-of-household status must complete Form 8867 and keep the records — the penalty is $650 per failure for returns filed in 2026, up to $2,600 on one return; federal law (the FTC Safeguards Rule, which treats tax preparers as financial institutions whatever their size) requires a written information security plan, which the IRS reminded every preparer of in August 2026 and asks about on the PTIN renewal; every return you sign carries your PTIN; and preparers are liable for understatements from unreasonable positions. Representation before the IRS — audits, collections — belongs to enrolled agents, CPAs and attorneys under Circular 230; the enrolled agent exam (three parts, $317 each, plus a $140 enrollment fee) is the preparer's route to it.
Business registration and sales tax — In the US you register the business (an LLC is $40 in Kentucky and $300 in Texas, and California adds an $800 yearly LLC tax on top of its filing fee), take a free EIN and get a city business license where one is issued; tax preparation is a professional service that most states don't tax, and a few states tax services generally — ask your state's revenue department, and confirm the entity choice with your accountant.
Insurance — In the US errors and omissions insurance (Insureon's tax-preparer median is $34 a month for $500,000 per occurrence) pays for the return you got wrong and the penalty the client is charged, cyber insurance ($53 a month) for the breach of a file cabinet's worth of Social Security numbers, and general liability ($29 a month) for the client who slips in your office; no state requires them, and every client with a letter from the IRS will ask whether you have them.

Milestones: the next 30 days

The first month's to-do list for Northbank Tax & Bookkeeping, in order:

Get the PTIN, apply for the EFIN and book the fingerprinting; check your state's preparer rules
Finish the 18-hour AFSP package before the season, and register the certificate
Form the LLC, take the free EIN and open a business bank account
Buy the software and set up the portal, e-signature and the backups; write the security plan on the IRS template
Get errors and omissions, general liability and cyber quotes
Write the fee schedule and the engagement letter from NATP's averages and your market
Put the website live with the services, the document checklist, the upload link and appointment booking, and claim your Google Business Profile
Sign three bookkeeping clients before January, and ask each for a tax referral
Order the signs and the mailer for the first week of January

Appendix: what a lender will ask for

This plan tells the story and shows the numbers. If you take it to a bank, expect to be asked for these documents as well:

Two years of personal tax returns and a personal financial statement
Your PTIN, EFIN and AFSP record, and any state registration
A month-by-month cash-flow projection showing the season and the off-season
Your fee schedule, the engagement letter and the bookkeeping client list
Proof of errors and omissions insurance and the written security plan
Your credit report

Every figure in Northbank Tax & Bookkeeping's plan is a typical US range from the tables above or arithmetic on the sample's own startup list and $5,800 monthly sales target — nothing is a market projection. The template downloads above are the same plan with [bracketed] lines for your own business.

Step two

Turn this plan into a website

Add your name and your city to the line, and Zarla builds the website with your services in place. You edit the rest in chat.

Or download the free template (Word)

Keep going

The plan is the thinking. These are the next pieces for a tax preparation business:

Tax preparation business plan FAQ

How much does it cost to start a tax preparation business?

Typically $5,295–$14,898 in the US, counting every required line in the table above. The range is wide because the biggest items (a computer, two monitors, a scanner, a printer, a shredder and a file cabinet; professional tax software with every state) depend on what you already have and where you are. The free generator turns the table into your own list with your own figures.

How much can a tax preparation business make?

$185–$280 the average fee for a basic Form 1040 in NATP's 2025 fee study — $185 from a non-credentialed preparer, $228 from an enrolled agent, $280 from a CPA; $54,920 the May 2025 US median pay for employed tax preparers (BLS) — a survey that leaves out the self-employed, who own most one-person practices; $650 the IRS's penalty per failure to do the due diligence on a credit — up to $2,600 on one return filed in 2026. A tax preparer earns per return in a twelve-week season, so the fee schedule and the number of returns are the whole model. NATP's 2025 fee study puts a basic Form 1040 with Schedules 1 to 3 at $185 from a non-credentialed preparer, $228 from an enrolled agent and $280 from a CPA, a Schedule C at $123 to $135 and a Schedule A at $53 to $61 on top, business returns at a $634 average minimum, and the hourly rate at $182; 83% of preparers raise fees every year or two. Two hundred and forty returns at $200 on average — between the non-credentialed and the enrolled-agent fee — is $48,000 in the season, and six bookkeeping clients at $300 a month is $21,600 across the year: $69,600, about $5,800 a month averaged over the year, and about $4,500 to $5,300 a month before the owner's own pay once the monthly lines below are paid, because the preparer's February-to-April is the cost. Employed tax preparers earned a May 2025 median of $54,920 (BLS), in a wage survey that does not include the self-employed — who own most one-person practices and earn what their fee schedule and their client count say.

What licenses and permits do I need to start a tax preparation business in the US?

The PTIN and the EFIN; state preparer registration; due diligence, the security plan and the IRS's rules; business registration and sales tax; and insurance. Rules vary by state and city — confirm each item with your local licensing office and an accountant before you spend on it.

Do I need a business plan to start a tax preparation business?

You need the thinking more than the document: what you'll offer, who pays, what it costs to start, what it costs to run each month and how long the budget takes to recover. A lender, a landlord or an investor will ask for the document — and for things beyond it: two years of personal tax returns and a personal financial statement; your PTIN, EFIN and AFSP record, and any state registration. The sample plan above has every section; the generator writes yours from five questions.

Can I turn this business plan into a website?

Yes — that's the point. Your plan's own marketing section says people will find you on Google and through word of mouth; a website is how both happen. Zarla builds your tax preparation business website from what you've already told us — free to build, pay when you publish.

Is there a free tax preparation business plan template?

Yes. The tax preparation business plan template on this page downloads free as a Word document or a PDF — no email, no sign-up. It's the complete plan for a placeholder business with [bracketed] lines to fill in, and the typical figures for a tax preparation business already in the tables. The generator writes the same plan with your own name, city, services and numbers in five questions.

What should a tax preparation business plan include?

The sections a lender, a landlord or an investor expects: an executive summary, products and services, market analysis, marketing strategy, an operations plan, startup costs, a financial plan, the risks, licenses and permits, milestones and an appendix. Northbank Tax & Bookkeeping's sample plan above has all eleven, and the section-by-section notes explain what goes in each one for a tax preparation business.