How bookkeepers and tax preparers make money

A practice does some mix of three things: keeping the books every month, preparing tax returns and giving advice. What changes is who does the hours.

A solo bookkeeper keeps small businesses' books alone. In 2024 the US had about 258,557 bookkeeping and accounting businesses with no paid employees (most of them just the owner), by the Census's count, and they took in $31,326 on average; 68.3% took in under $25,000. The Census counts any such business that takes in at least $1,000 a year, so side businesses count too.

A tax preparer prepares people's and small businesses' returns. The US had about 106,403 tax preparation businesses with no paid employees in 2024, most of them just the owner, taking in $34,333 on average.

A small firm has staff. Bookkeeping firms with employees taking in a hundred thousand to half a million dollars a year took in $232,606 on average in 2022. Most CPA firms, run by Certified Public Accountants, are small too: 80.1% of those with employees took in less than $1M. Those taking in half a million to a million took in $705,292 on average, had about 4.9 employees in mid-March and spent 40.2% of what they took in on payroll.

A bookkeeper can bill by the hour or charge a flat monthly fee for a set amount of work, written in an engagement letter: the transactions recorded and sorted, the accounts matched to the bank statements, the reports by a set day. Catching up months a client fell behind on is priced separately, once. Tax preparers can charge a set fee per return.

A flat fee changes who gains when the work gets faster. Billing by the hour, a bookkeeper who gets faster sends smaller bills. With a flat fee, the fee stays the same and the hours saved are the bookkeeper's. That matters, because software now does much of the sorting: the Bureau of Labor Statistics projects bookkeeping clerk jobs to fall 6% from 2025 to 2035 because software has automated many of their tasks.

The other limit is hours. In our example, a solo bookkeeper has 120 hours a month to give clients, and a café-size client takes 5 hours a month, so about 24 clients fit. At a fee of $450/month each, that's the most the practice can take in until it works faster, charges more or hires. The free lesson lets you plan your own client list.

These numbers are our example.

Tax preparers do a year's work in a few months. In 2025 the IRS received about 163.6 million individual returns by mid-October, and 86.8 million of them were e-filed by tax professionals: 53%.

H&R Block, a big tax preparation company, prepared 11.3 million US returns in its year to June 2025. Its annual report says most of its clients file from February through April, and a substantial majority of its tax revenue comes in then. At its busiest it employed about 70,100 people, seasonal workers included, against about 4,300 regular full-time employees.

That's one reason a preparer may also keep books or give advice the rest of the year: monthly fees bring money in during the months when returns don't.

Keeping books needs no federal license, and many bookkeepers learn on the job: the Bureau of Labor Statistics says a typical bookkeeping clerk starts with some college and no degree. Preparing tax returns for pay needs a PTIN from the IRS first, a preparer tax identification number: anyone paid to prepare or help prepare federal returns must have one, and it cost $18.75 for 2027. Some states, such as California, also require their own registration for paid preparers who aren't CPAs, enrolled agents or attorneys. A CPA license comes from a state board, with its own exam, school and work rules.

A practice is cheap to open: software, insurance, a computer and a phone. The hard part is the first clients: they can come slowly, and people who already know your work are a natural place to start. Working alone, the owner's pay is what's left after costs, before income tax and self-employment tax, with no employer paying for health insurance or time off.