Do you want to know how much money tax preparers make yearly? If YES, here are 6 factors that determine the income or profit for self employed tax preparers. In order to have an idea of the amount self – employed tax preparer is expected to make monthly or yearly, you should clearly define the service offerings of self – employed tax preparer.
What is a Self Employed Tax Preparer?
A self – employed tax preparer is someone who is responsible for income tax preparation for individuals and companies. Identifies potential tax credits and liabilities and ensures accurate and complete returns are filed in a timely manner.
Completes tax forms in accordance with policies and in compliance with legislation and regulations, interviewing clients and analyzing financial liabilities, ensuring compliance with tax laws, advising clients on tax-related matters, developing professional relationships, maintaining confidentiality of client’s information amongst others.
With that in mind, we can estimate what a self-employed tax preparer is expected to make. It is important to point that there is no one-mold-fits-all when it comes to how much a self – employed tax preparer is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average self – employed tax preparer can make yearly and these factors are;
6 Factors That Determine the Income of Self Employed Tax Preparers
1. The Capacity of the Self – Employed Tax Preparer
One cannot conveniently state the amount a self – employed tax preparer is expected to make yearly if you do not know the capacity of the business. As a matter of fact, you cannot equate the amount a self – employed tax preparer that is just starting out in business with a tax preparer who has decades of experience in the industry.
2. The Location the Self – Employed Tax Preparer is Covering
We must not rule out the fact that the location the self – employed tax preparer is covering is a major factor that will determine the amount he or she is expected to earn monthly and yearly. The truth is that you will struggle to make good money as a self – employed tax preparer if you locate the business in an area filled with low income earners or a place that businesses hardly thrive.
If you locate your self – employed tax preparer business close to a highbrow area or an area with loads of small and medium scale businesses, you are likely going to make good returns from the business.
3. The Management Style of the Business
Another key factor that will determine the amount a self – employed tax preparer is expected to make yearly is the management style of the business. Trust me, the results you will get when you are a good manager with eyes for top-notch customer services will be far different from a self – employed tax preparer who is a poor manager of business. The idea is that a good self – employed tax preparer with good managerial and customer service skills will not just retain their old customers, they will also keep getting new customers especially through recommendations.
4. The Business Approach of the Self – Employed Tax Preparer
There are different business approaches that a self – employed tax preparer can choose from and no doubt it will greatly influence the amount they are expected to make monthly and yearly. Of course, we know that self – employed tax preparer may decide that they want to work alone and do their marketing alone, and they can also decide to partner with other businesses that will recommend clients to them.
It is easier to find self – employed tax preparers that offer robust services partnering with accounting and bookkeeping consultants, financial consultants, insurance agents and brokers and key players in the financial services industry. In essence, a self – employed tax preparer who works with others will surely make more money than a solo tax preparer.
5. The Advertising and Marketing Strategies Adopted by the Self – Employed Tax Preparer
Another key factor that will determine the amount a self – employed tax preparer – business can make yearly is the advertising and marketing strategies adopted by the business. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings, but you may be expected to spend more.
But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a self – employed tax preparer that is engaging in aggressive advertising and marketing to make same amount yearly with a self – employed tax preparer that is passive with its advertising and marketing.
6. The Number of Years the Self – Employed Tax Preparer is in Business
In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is well – managed and creativity always comes to bear. This is because over the years, you would have been able to gain the trust of your customers and it will be easier for you to always have them coming back and also recommending clients to you.
For example, in your first fiscal year (FY1) you might make thirty five thousand dollars ($35,000), in your second fiscal year (FY2) you might make forty five thousand dollars ($45,000) and in your third fiscal year (FY3) you might make sixty five thousand dollars ($65,000).
Having said that, a Self – Employed Tax Preparer will usually earn wages on a scale from 24,000 to 36,000 based on levels of tenure. Tax Preparers will most likely earn a compensation of Thirty Seven Thousand One Hundred dollars every year. Tax Preparers can make the most money in Massachusetts, which has average pay levels of $60,440.
Please note that the top ten percent of tax preparers earned $39.30 per hour and $81,740 annually. Successful independent (self-employed) tax preparers, operating their own businesses, can make substantially more money than a tax preparer who is an employee.