Guides
How one operator's tax preparation business actually got off the ground
Latoya Bennett opened Bennett Tax & Bookkeeping in Charlotte with one desk, one software seat and a plan built around the clients she could actually serve.
What to take away
- Latoya Bennett opened her tax preparation business, Bennett Tax & Bookkeeping, in Charlotte, North Carolina in January 2023 with one desk in a shared suite, one software seat, and a PTIN renewed before her first client.
- She capped her first season at 60 returns and turned away walk-ins rather than promise turnaround she could not keep.
- She priced the return, not the hour, after one return with three K-1s ate a full day.
- She kept IRS preparer rules and her state registration current from week one, before the phone started ringing.
- Referrals from two former coworkers, not advertising, drove her second-season growth.
This article covers general business mechanics for tax practices. It is not tax, legal or accounting advice. Confirm current requirements with the IRS, your state tax authority or a licensed CPA or enrolled agent.
The operator and the launch
Latoya Bennett spent nine years as a staff accountant before opening Bennett Tax & Bookkeeping in Charlotte, North Carolina in January 2023. Her first office was one desk in a shared suite rented month to month, typically $200 to $600 a month in most markets, plus a single software seat.
She did not write a business plan for a bank. She wrote a one-page model instead: who she would serve, what she would charge, how many returns she could finish in a week, and what she would turn down.
Professional tax software sells by the season. Packages from Drake Tax, ProConnect Tax, TaxSlayer Pro and ProSeries typically start near $300 for limited returns with one state module, while unlimited multi-state packages run into the thousands.
Her first season, by the numbers
| Item | Her first season |
|---|---|
| Returns filed | 60, capped by choice |
| Staff | Just Bennett |
| Software | One seat, one state module; limited packages typically $300 to $1,500 a season |
| Office | Shared suite, month to month; $200 to $600 a month in most markets |
| Walk-ins accepted | None after February 1 |
| Referral sources | Two, both former coworkers |
| PTIN | Renewed before her first client; the IRS fee has been $19.75 in recent cycles |
| State registration | Confirmed before her first client |
| Insurance | Errors and omissions coverage from week one; solo policies typically $300 to $800 a year |
The cap is what made the season work. Bennett stopped taking walk-ins on February 1 rather than promise turnaround she could not keep. Sixty returns across a season leaves room to check every document before it goes out.
First season by the numbers
- 60returns filed, capped by choice
- 1staff just Bennett
- $300-$1,500limited software package per season
- $200-$600shared suite rent per month
The three mistakes she made
- She quoted her first two returns by the hour. One return with three K-1s took a full day and lost money at that rate.
- She took a client who wanted bookkeeping, payroll and a prior-year amendment in the same week. All three arrived late.
- She waited until April to ask for referrals, after clients had filed and stopped thinking about taxes.
By her second season she had fixed all three. She priced by return type, read a written scope list to every new client, and asked for the referral at delivery rather than weeks later.
What she got right before opening
Bennett renewed her PTIN through the IRS preparer system and confirmed her state registration before she took a client. The IRS PTIN requirements page states that anyone who prepares or substantially assists with federal returns for compensation generally needs a valid, current PTIN.
Credentials and setup before opening
- Renew PTIN through IRS preparer system
- Confirm state registration before first client
- Obtain free EFIN for electronic filing
- Read IRS starting a business guide
- Use SBA guide for startup costs and permits
- Consider Annual Filing Season Program18 hours CE
- Budget $125 LLC filing and $200 annual report in NC
She treated the PTIN as a floor, not a finish line. An EFIN, which the IRS issues at no charge, is the other number she needed to file returns electronically.
She also read the IRS starting a business guide for structure and recordkeeping basics, and used the SBA business guide to work through startup costs, permits and insurance before signing a lease.
North Carolina charges $125 to form an LLC and $200 for the annual report, so structure is a cost decision as much as a legal one.
Two more credentials are worth naming. The IRS Annual Filing Season Program takes 18 hours of continuing education and grants limited representation rights. Memberships in the National Association of Tax Professionals or the National Association of Enrolled Agents typically run a few hundred dollars a year.
What a new operator should copy
- Renew the PTIN and confirm state registration before the first client.
- Set a return cap for the season and hold it.
- Price by return type, not by the hour.
- Write the scope list and read it aloud to every new client.
- Ask for the referral at delivery.
- Buy errors and omissions coverage before the first return goes out.
- Choose software in December so you know it before the February rush.
Common questions
How many returns should a first-season operator take?
There is no universal number. Bennett capped at 60 because that was what one person with one software seat could finish without missing deadlines. Work out your cap from the hours you can actually staff, then hold it.
Should a new tax practice charge by the hour or by the return?
By the return. Hourly pricing punishes the operator for a client's messy records and rewards speed over accuracy. Price the return type, then track your effective hourly rate to check the number.
What paperwork comes before the first client?
A PTIN, any state registration your jurisdiction requires, a business structure, and recordkeeping from day one. California, Maryland, New York and Oregon are among the states that license or register paid preparers. Confirm each item with the IRS, your state tax authority or a licensed CPA or enrolled agent, because requirements vary by state and municipality.
