Most new tax preparers underprice their services.

They look at what national chains charge, cut the price, and assume that being cheaper will help them win clients. In this episode, Jason Carr explains why that approach can hurt a new tax prep business before it ever gets traction.

Jason walks through a practical pricing framework for new preparers, including:

• Why market-rate pricing matters
• Why flat fees usually work better than hourly billing
• How to create basic, comprehensive, and premium service tiers
• Why new preparers should avoid competing primarily on price
• How annual price increases compound over time
• What first-year, second-year, and third-year revenue can look like with disciplined pricing

Jason also explains why pricing is one of the fastest ways to increase income without adding more clients.

Key Takeaways

• Do not price yourself as the cheaper alternative: Cutting the market rate tells clients you are worth less. A professional price supports a professional perception.
• Use market averages as your starting point: Basic individual returns often fall around the low-to-mid $200 range, while more complex returns with itemized deductions, self-employment income, and state returns justify higher pricing.
• Charge flat fees, not hourly rates: Flat fees give clients certainty and reduce billing anxiety. They also allow you to price based on value and complexity rather than time spent.
• Collect before filing: A clean billing process protects cash flow and avoids chasing clients after the return is complete.
• Use service tiers: A basic, comprehensive, and premium option helps clients self-select based on need and budget. The middle tier often becomes the default choice.
• Raise prices every year: A $25 to $50 annual increase can materially improve profitability without requiring a dramatic change to your workload.
• Average revenue per client matters: A preparer who charges $350 per return can earn significantly more than one charging $200, even with fewer clients.
• Pricing compounds: Better pricing in year one creates a stronger base for year two and year three.

Suggested Episode Timestamps

00:21: Why most new preparers underprice their work

00:35: What the tax preparation market actually charges

1:02: Why franchise pricing should not scare independent preparers

1:19: The case for flat-fee pricing

1:39: Why new preparers should start at market average

1:59: Building basic, comprehensive, and premium tiers

2:33: How to raise prices each year

2:56: The revenue math for years one, two, and three

3:26 Why pricing is the fastest income lever

3:36: How MuseSpring helps new preparers price professionally

Resources Mentioned

• MuseSpring: https://musespring.com
• Tax Business Blueprint Program: https://musespring.com
• The Law Office of Jason Carr, PLLC: https://carrtaxlaw.com