Tax Preparation Services Revenue Benchmarks
The average tax preparation services business in the United States generates $281K in annual revenue, according to the U.S. Census Bureau Statistics of U.S. Businesses (SUSB 2021). There are 19,491 tax preparation services businesses in the U.S., employing 154,310 workers with an average profit margin of 22.0%. The average employee in this industry earns $52K per year (Bureau of Labor Statistics QCEW 2023).
What Does a Tax Preparation Business Actually Do?
Non-CPA tax preparation for individuals and small businesses. Includes national chains (H&R Block, Jackson Hewitt), franchise operators, and independent preparers. Highly seasonal (Feb–April).
Who buys: Individual taxpayers, especially those with W-2 income and simple returns.
Average Revenue
$281K
per year
Profit Margin
22.0%
industry average
Revenue / Employee
$36K
per year
Total Businesses
19,491
in the US
Est. Owner Income
$62K
small business avg
Labor Cost
50.0%
of revenue
Avg Employee Wage
$52K
per year (BLS)
Market Saturation
5.9
firms per 100K people
How Much Do Tax Preparation Services Charge?
Non-CPA tax prep is priced per return, with complexity as the driver.
| Service | Typical range |
|---|---|
Basic 1040 (standard deduction) | $150–275 |
Itemized (1040 + Sch A) | $250–450 |
1040 + Sch C (self-employed) | $350–750 |
Rental property (Sch E) | $100–200 add-on |
State return | $50–150 add-on |
Ranges based on industry rate surveys and typical published pricing. Actual quotes vary by city, business size, and job complexity.
Complete tax preparation business plan
A 12-section data-backed business plan for a tax preparation services business — executive summary, market analysis, competitive landscape, revenue model, 3-year financial projections, operations, marketing, staffing, funding request. Pre-populated with real Census, IRS, and BLS data on this industry. Free to view.
Cost Structure — Where Every $100 in Revenue Goes
Approximate P&L breakdown for the tax preparation services industry. Labor share and net profit are grounded in Census SUSB and IRS SOI data. Other lines are split using sector-typical ratios.
| Category | Per $100 revenue | Per typical business | What's in it |
|---|---|---|---|
Client-related expenses | $4 | $12K | Software licenses, subscriptions, printing, filing fees, travel billed to clients. |
Wages & benefits | $50 | $141K | Payroll for all employees at the business (owner comp not included for small owner-operators). |
Rent & facilities | $6 | $16K | Rent or mortgage on business location plus utilities tied to the space. |
Marketing & advertising | $4 | $12K | Google/Meta ads, SEO, print, referral fees, event sponsorships. |
Other operating costs | $14 | $39K | Professional liability insurance, continuing education, tech, admin support. |
Net profit | $22 | $62K | What remains for the owner or shareholders after all business expenses. |
Directionally accurate for a typical business in the industry. Individual businesses vary widely — a franchise may run a very different cost mix from an independent, and older established businesses often have lower labor share than newer ones.
Average Revenue by Business Size
Industry Dynamics (Census BDS 2023)
New Business Rate
9.66%
openings/year
Closure Rate
9.23%
closings/year
Net Job Growth
+4.24%
annual
Businesses Closed
8,967
in 2023
Firm Count Trend
Should You Start a Tax Preparation Business?
Startup Cost
$10K – $75K
Break-Even
8 months
5-Year Survival Rate
60.0%
Related Industries
Frequently Asked Questions
- What does a tax preparation services business do?
- Non-CPA tax preparation for individuals and small businesses. Includes national chains (H&R Block, Jackson Hewitt), franchise operators, and independent preparers. Highly seasonal (Feb–April). Individual taxpayers, especially those with W-2 income and simple returns.
- How much do tax preparation services charge?
- Non-CPA tax prep is priced per return, with complexity as the driver. See the pricing table above for typical rates by service type.
- How much does the average tax preparation services make per year?
- The average tax preparation services business generates $281K in annual revenue, based on U.S. Census Bureau data (SUSB 2021). After expenses, the estimated owner profit is $62K per year at a 22.0% profit margin.
- How many tax preparation services businesses are there in the US?
- There are 19,491 tax preparation services businesses operating in the United States, employing a total of 154,310 workers.
- How much does it cost to start a tax preparation services business?
- Startup costs for a tax preparation services business typically range from $10K to $75K, with a 5-year survival rate of 60.0%.
- What is the average salary in the tax preparation services industry?
- The average employee in the tax preparation services industry earns $52K per year, according to Bureau of Labor Statistics data (QCEW 2023).
Industry Growth & Survival
The tax preparation services industry is actively growing — adding jobs at a net rate of 4.2% per year. New establishments are opening faster than existing ones close (9.7% entry vs 9.2% exit), indicating healthy demand.
Approximately 62% of tax preparation services businesses survive their first 5 years. This is above the national average (~50%), making it a relatively safe industry to enter. In 2023, 8,967 firms in this industry closed permanently.
Employment & Wages
The average employee in the tax preparation services industry earns $51,631/year. This is near the national average of ~$65K. With 36,927 establishments employing 97,192 people, the typical business has about 3 employees. Most businesses in this industry are small operations — often owner-operated with minimal staff.
Industry Trend (2000–2023)
The tax preparation services industry has grown 22% since 2000 (from 85,299 to 104,020 firms).
See full historical statistics →Compare Tax Preparation Services revenue with other industries: