December 20, 2021

Freelance Tax Preparation Business – 5 Mistakes to Avoid

When you start a freelance tax preparation business, there is a great deal to learn. You’ll master your craft through trial and error. There are many mistakes people make when getting started. Here are the 5 biggest mistakes so you can avoid making them and speed up your learning curve. 

Charging Too Little for Tax Preparation

When you first get started as a freelance tax preparer, you may feel like you’re living your best life ever. You’re getting paid to do what you love on your own terms. As a result, most new tax preparers charge too little for their tax preparation services. 

You may also charge less than you’re worth to secure more clients. This isn’t a good long-term strategy. The sooner you start charging what you’re worth, the better. There are three important steps that will help you set your rate:

  • Examine your expenses and understand what you need to earn to break even

  • Research what other tax professionals are charging

  • Review your unique skills and talents and the value you provide

Then, set your rates accordingly. If, at first, you don’t feel confident in your skills, offer more value. As you gain confidence, charging what you’re worth will start to feel more natural to you. 

Taking Every Job that Comes Your Way

You’ll be excited to get new clients and line up work. One mistake many freelance tax preparers make is that they take on every new tax prep client that comes their way. The result is that you get too busy. Plus, you might end up taking on work or clients that aren’t appropriate for you.

When you get started as a tax preparer, clearly define what services you offer and what services you don’t. Learn how to set clear boundaries with clients who ask too much. Look at your schedule and determine how much work you can take on at a given time and stick to it.

Burning out

The first casualty of any freelance business is work-life balance. You’re trying to do everything you can to get your business off the ground. You want to be available to your clients 24/7. The result is that you forget to take time for yourself, and you burn out.

Be sure to put some leisure time and family time into your busy schedule. Define your work time vs. non-work time and stick to it. Turn off notifications and resist the urge to check email during your off hours.

Forgetting to Do Your Marketing

Once your tax preparation business gets off the ground, you’ll get enough work to fill your schedule. This is great, but it leads to most new freelancers to forgetting about important tasks, like – marketing. 

As a freelance tax preparer your marketing will take time to build. When the work dries up and you need to get new clients fast, your marketing won’t be in place, and you’ll have to start from scratch.

Since it takes time to work up your marketing strategy, it's best to start in the beginning and devote a set amount of time each day to building those streams, even when you’re up to your ears in work.

To help free up your time and create efficiency with your marketing efforts -- try using a system like TaxNitro. What sets TaxNitro aside from other marketing solutions is that it is geared towards tax professionals and made in collaboration with other tax professionals who wanted to create a better marketing solution for the tax industry.

With TaxNitro you will have the automation in place to help you efficiently follow up with all of your clients (new & prior year tax filing customers) with automated system that you can manage all from one platform. We believe in keeping it simple.


Avoiding long-term planning 

This is your business. Like any business owner, you need to think ahead into the future. Where will you be a month from now, a year from now, or ten years from now? 

Even when you get busy, don’t forget to devote some time to strategy and long-term planning. You need to know where you’re going so you can grow.

About the author 

Portia Mariee

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