How much does a tax preparer make during tax season?

The people who take the courses mostly end up working for H & R Block and Jackson-Hewitt. Their compensation is based on the tax returns they do, and they typically do a lot of 1040-EZ forms, resulting in the same sort of pay that you get for flipping burgers.

If you learn what you're doing, you'll find that complicated returns are much more fun, because you get to probe for tax deductions. I used to look at past tax returns to get an idea what was going on, and by asking questions, I often could file amended returns that got them a lot of money back.

I remember one customer who came on January 25, 1986 - I remember, because that was the day the Challenger blew up. This couple has a struggling small business, and were worried that they couldn't afford to get their taxes done. I told them that business returns typically ran $75 or so.

Well, when they came in a week later, I told them I had bad news and good news. They wanted the bad news first. Well, I said, they needed a much more complex return than I initially thought, and what's more, their old returns had to be redone as well, and we were talking $1,050 for the three returns. The lady's face went *really* pale. She started crying, and said there was NO way they could afford that. Then I told her that instead of paying taxes this year, they had a refund coming - for all three years, it was about $7,000.

Which is what happens when an inexperienced preparer handles a complex return. Taxpayers with complex situations need good preparers.

If you're good, you really need to be working for yourself. I found that it cost $100 in classified ad advertising for every $100 in returns I got to do, which doesn't sound profitable, but it is, because the *next* year and the next, and the year after, virtually all those customers wanted me again.

By 1989, I was averaging $40 per hour, but I needed to move out of the area to finish my degree. All these people were like my family. I got invited to weddings and graduations. They loved me. The last year I did taxes, I refused to tell my customers how much to pay me. I said I'd leave it up to them, to pay me what I was worth. Most of them paid me *twice* what I'd charged them the previous year. And the following year, some of them begged me to drive the 300 miles to where they were, to do their taxes once again.

So yeah, you can make pretty good money as a tax preparer. If you are good, and mostly do taxes for small businesses and people who have investments, I suspect that in 2007 dollars, you should be able to do $150K in billings working full time, six months per year.

Six months? Aren't taxes due on April 15? Sure, but you can get an automatic extension to file in August, just for asking for it. Sometimes, you'll need the time to do some of the complex returns. In other cases, you'll ask for the extension even though you don't need it, in order to make your customer think that your services are very much in demand.