The best profitable tax preparation services and how each was judged

What to take away

This article covers practice management, not tax positions. Filing requirements, deadlines and preparer rules come from the IRS and your state tax authority. Confirm current forms and Circular 230 obligations before you change a service line.

How each service was judged

Four tests, applied the same way to every service on the list.

A service that scores well on all four earns a place. One that scores well on demand but poorly on staffing drains the season.

The 10 ranked profitable tax preparation services

1. Individual 1040 with a Schedule C on Drake Tax, Lacerte or ProConnect

The core product for most practices. One owner-operator, one set of books, one return. Drake Tax, Lacerte and ProConnect handle the preparation; the work is document collection, bookkeeping cleanup and a short review call. It repeats every year and feeds every other service here. Price it as a package, not an hourly rate.

Typical fee: $400 to $1,200. Judged high on repeatability and demand; preparer-level staffing; medium to high realization.

2. Multi-state individual returns on Lacerte or ProConnect

Clients who moved, work remotely or hold rental property in another state need two or more state returns from the same federal figures. The incremental work is small once the federal return is done. The fee is not. California and Illinois run their own e-file mandates, so confirm each state's current rule before quoting.

Typical fee: $50 to $150 per extra state. Judged high on repeatability and realization; preparer staffing; demand depends on client mix.

3. Monthly bookkeeping and write-up on QuickBooks Online or Xero

Monthly or quarterly bookkeeping that ends in a business return. This is the highest-retention service a practice can sell because the client returns every month, not once a year. QuickBooks Online and Xero are common ledgers. Staff it with a bookkeeper, not a preparer, and review the year-end close yourself.

Typical fee: $300 to $1,000 per month. Judged high on repeatability and demand; bookkeeper staffing; high realization.

4. Entity returns: 1120-S and 1065 on Lacerte, ProConnect or Drake

S-corporation and partnership returns pay well because they require a balance sheet, basis tracking and K-1s. They also carry the most review time, so price the review into the quote. Clients with these returns almost always need payroll and bookkeeping too.

Typical fee: $1,200 to $3,500. Judged medium on repeatability; EA or CPA staffing; high realization; medium to high demand density.

5. Tax planning retainers with Holistiplan or Corvee

Advisory work sold as a flat annual fee, delivered in two or three meetings across the year. Holistiplan and Corvee are common tools for scenario modeling. It smooths cash flow outside filing season and reduces the January crush. It suits clients whose income changes: self-employed, retirees drawing from accounts, and anyone selling property.

Typical fee: $1,500 to $6,000 per year. Judged medium on repeatability; EA or CPA staffing; high realization; medium demand density.

6. IRS representation and notice response by enrolled agents, CPAs or attorneys

Power of attorney work for audits, notices and payment plans. Only enrolled agents, CPAs and attorneys may represent clients before the IRS, so this service belongs to credentialed staff. It is high-margin and hard to commoditize.

Typical fee: $250 to $500 per hour, or $1,500 to $10,000 per matter. Judged medium on repeatability; credentialed staffing only; high realization; demand varies by book.

7. Payroll and quarterly filings on Gusto, ADP or QuickBooks Payroll

Recurring, deadline-driven and easy to systematize. Gusto and ADP sell direct to small businesses, so compete on service, not price. Pair it with bookkeeping so the client has one point of contact.

Typical fee: $35 to $75 per employee per month, plus $25 to $50 per quarterly filing. Judged high on repeatability and demand; bookkeeper staffing; medium realization.

8. Prior-year and amended returns on Drake, Lacerte or ProConnect

Back-filing for clients who missed years. The work is heavier per return, but demand is steady and clients rarely shop on price. Set a separate minimum fee and collect a deposit before starting.

Typical fee: $250 to $750 minimum, with a $100 to $250 deposit. Judged medium on repeatability; preparer staffing; high realization; steady demand density.

9. Nonprofit 990 and fiduciary 1041 returns on Lacerte or ProConnect

A niche that few general practices serve. Form 990 work suits a practice with a nonprofit client base; 1041 work suits clients with trusts. Both need specialist review, so add them only when someone on staff has the background.

Typical fee: $800 to $3,000. Judged medium on repeatability; EA or CPA staffing; high realization; low to medium demand density.

10. Bookkeeping cleanup and catch-up on QuickBooks Online or Xero

One-time projects for clients whose records are months behind. Bill by the hour with a floor, quote a range, and stop when the range is exceeded. This is the service most likely to turn into a recurring bookkeeping client.

Typical fee: $75 to $150 per hour, with 10 to 40 hour projects. Judged low on repeatability; bookkeeper staffing; medium realization; medium demand density.

Typical fees and delivery costs for each ranked service

For packages that bundle these lines, see the service and package structures guide.

Before you add a service

Common questions

Why rank services by staffing fit instead of by fee?

A high fee that only the owner can earn is capped by the owner's calendar. A moderate fee that a trained preparer can deliver at volume scales through the season. Rank by what the practice can produce, then price.

Should a new practice start with the top-ranked service?

Usually yes. The 1040 with a Schedule C brings clients in the door and reveals which of the other services they need. Add bookkeeping or planning once the client relationship is established.

How often should the ranking be reviewed?

Once a year, before filing season, using last season's realization figures. A service that stopped paying, or that now needs a credential you do not hold, comes off the list.