What will it cost to start your tax office?

What does it cost to start a tax preparation business?

The government's share is small. The IRS charges $18.75 for a 2027 PTIN, and there is currently no fee for an EFIN or an EIN. Most of your startup cost is your choice: where you work, which software pricing model you pick, how much equipment you buy, whether you hire help, and how hard you market your first season.

That's why a single "average cost" number isn't much use. A preparer working from home on a laptop and a pay-per-return plan has a very different budget from a storefront with three desks and seasonal staff. The calculator above lets you build your own estimate line by line, then shows how many returns you need to cover it.

Fixed IRS and state costs

These are set by the government, not by your vendors. Confirm current amounts when you apply, because fees can change each year.

The costs that vary the most

Software. This is usually the biggest decision. Pay-per-return plans charge little upfront but take a fee on every return, which suits a first season with uncertain volume. Unlimited plans cost more upfront but nothing per return, which pays off as volume grows. Enter one or both in the calculator and watch the break-even point move. Bundles that include bank-product integration, e-signature and a client portal can replace several separate tools. See what tax preparer software costs for typical price ranges.

Space. Many first-year preparers work from home or meet clients remotely and pay no rent. A storefront brings walk-in traffic and credibility but adds rent, utilities, a deposit and furniture. Many offices lease only for the season, so the calculator asks how many months you pay.

Insurance and data security. Errors and omissions (E&O) insurance protects you if a mistake costs a client money. Security isn't optional: the FTC Safeguards Rule requires tax preparers to keep a written information security plan (WISP), and the IRS expects multi-factor authentication, encryption and backups. Budget for antivirus, a secure client portal and backups.

Marketing. Your first 50 clients usually come from people you already know. Paid ads, flyers and signage help you reach further. Most offices spend the most from January through April.

People. A second preparer or a front-desk helper raises your capacity, but payroll quickly becomes your largest fixed cost. Every paid preparer needs their own PTIN.

Who pays bank-product fees?

Refund transfers let a client pay your prep fee out of their refund. The bank's fees are typically charged to the taxpayer and deducted from the refund under the bank's program terms, so they usually aren't your cost. The calculator has a separate line for any bank-product fees your office chooses to absorb. Availability, approval and fees depend on the bank partner. See how refund transfers work in our FAQ.

How to read your break-even number

Each return leaves you with your fee minus that return's costs: per-return software or transmission fees, any bank-product fees you absorb, and payment processing. That's the kept per return figure. Divide your one-time and fixed costs by it and you get the number of returns needed to cover your first year.

From your second season, the one-time costs are already paid, so break-even usually drops sharply. The calculator shows both. If break-even is close to the volume you expect, look first at your fee and your software pricing model. Those two usually move the result most.

The profit figure is before income tax and before paying yourself. It is an estimate built on your inputs, not a forecast of what you will earn. See our earnings disclaimer.

Ways to lower your startup cost

• Start from home or remotely for your first season, and add a storefront once you know your volume.
• Match the software plan to realistic volume. Pay-per-return for an uncertain first year, unlimited once you're past break-even.
• Use the IRS's free channels for your EIN and EFIN. Don't pay a third party to file them.
• Lease seasonally rather than year-round, if your market allows it.
• Work through a service bureau that bundles software, bank-product enrollment, training and support instead of buying each one separately. See how it works.
• Apply for your EFIN early, around October, so you aren't paying for an office you can't e-file from. See how to get an EFIN.