You can start a tax preparation business with no money, or very close to it. The only cost you cannot avoid is the IRS PTIN fee of $18.75. Everything else, including professional tax software and an e-file setup, can be covered by a partner that charges per return instead of upfront. Nexus United Inc. offers exactly that: zero upfront cost for software and EFIN setup, a pay-per-return model, and a 70/30 split in your favor.
Most people tell you to budget $2,000 to $10,000 to open a tax office. That number scares away many skilled people who would make great preparers. The truth is that most of those costs are optional in year one. This guide shows what you really need, what you can skip, and how to get paid before you spend.
What It Usually Costs to Start a Tax Business
| Expense | Typical cost when starting alone | Needed in year one? |
|---|---|---|
| PTIN | $18.75 per year | Yes |
| Professional tax software | $500 to $3,000 or more per year | Yes, but not upfront |
| EFIN application | No IRS fee, but up to 45 days of waiting | Only to e-file as your own firm |
| Bank products setup | Separate applications to each bank | Helpful, not required |
| Office space | Rent, utilities and furniture | No, start from home |
| Website and paid ads | Hundreds per month | No, start with free channels |
| Business entity | Varies by state; a Florida LLC filing costs $125 | Optional at first |
| Errors and omissions insurance | Varies | Recommended as you grow |
Software and office space are the two highest costs. Both can be replaced with a pay-per-return partner and a home office.
7 Steps to Start a Tax Preparation Business With No Money
1. Get Trained at Low or No Cost
You need to understand Form 1040, filing status, dependents, and the main credits. Free options include IRS volunteer training through the VITA program. Paid courses are faster and more complete. Our income tax preparation course combines tax law with hands-on software practice.
2. Get Your PTIN
Apply online with the IRS. It takes about 15 minutes and costs $18.75 for 2026. This is the one expense you cannot skip, because every paid preparer must have a PTIN.
3. Work From Home
A quiet room, a laptop, a phone, and internet are enough. Many clients now prefer to send documents by phone and sign forms electronically. You can meet in person at a library room or a client’s home when needed.
4. Use Pay Per Return Software Instead of Buying a License
This is the key step. Instead of paying for a full software package before the season, choose a partner that charges only when you file. Your costs then rise with your income, not before it. Compare models in our tax preparation software guide and see what Drake tax software costs when you buy it on your own.
5. Solve the EFIN Problem
To e-file under your own firm, you need an Electronic Filing Identification Number. The IRS e-file provider application has no fee, but it includes a suitability check and can take up to 45 days. A service bureau partner can provide an EFIN setup so you can start filing while your own application is processed.
6. Let Clients Pay From Their Refunds
Bank products such as refund transfers let clients pay your fee out of their federal refund. You do not need to chase payments, and clients with no cash upfront can still use your service. This also keeps your own cash flow healthy in your first season.
7. Market for Free
- Tell family, friends, coworkers, and community groups.
- Create a free Google Business Profile.
- Post short tax tips on Facebook, Instagram, and TikTok.
- Offer a referral reward, paid only after the referred client files.
For more low-cost ideas, read our guide on how to grow a small business.
A Realistic Year One Budget
| Item | Minimum cost |
|---|---|
| PTIN | $18.75 |
| Software and EFIN setup through Nexus United | $0 upfront |
| Home office, phone, and internet you already have | $0 |
| Google Business Profile and social media | $0 |
| Local business tax receipt (if your city requires it) | Varies by city |
| Total upfront | Under $100 in most cities |
How Much Can You Earn in Your First Season?
Under a pay-per-return model with a 70/30 split, your income is easy to estimate:
Your earnings = Number of returns x Average fee x 70%
| Returns filed | Average fee | Total fees charged | You keep (70%) |
|---|---|---|---|
| 50 | $200 | $10,000 | $7,000 |
| 100 | $250 | $25,000 | $17,500 |
| 200 | $250 | $50,000 | $35,000 |
These are examples, not promises. Your results depend on your pricing, your market and how many clients you serve.
Mistakes to Avoid When Starting With Little Money
- Buying expensive software before you have clients. Read the 5 mistakes preparers make when buying tax software first.
- Using someone else’s EFIN improperly. EFIN rules are strict. Work only with an authorized e-file setup.
- Skipping a data security plan. The FTC Safeguards Rule requires a written Information Security Plan, even for a one-person office.
- Charging too little. Low prices attract difficult clients and leave no room to grow.
- Doing it alone. A support team saves you from costly mistakes in your first season.
Start Your Tax Business With Nexus United Inc.
Nexus United Inc. was built for preparers who have the skills but not the startup money. You get:
- Full professional tax software with zero upfront fees
- EFIN setup support with zero upfront fees
- A pay-per-return model, so you only pay when you file
- A 70/30 split, so you keep 70% of what you charge
- Bank products, training and support all season
See the full benefits of a tax preparer network, call (855) 639- 8740 or try our network today.
Frequently Asked Questions
Can you really start a tax business with no money?
Almost. The only required cost is the $18.75 PTIN fee. Software and e-file setup can be covered by a pay-per-return partner with no upfront fee.
What is the cheapest way to get tax software?
A pay-per-return or service bureau model is usually the cheapest for new preparers. You pay a fee when you file a return instead of buying a full license before the season.
Do I need an office to start a tax business?
No. Many preparers work from home and meet clients online or at the client’s home. You can rent an office later as you grow.
How do I get paid if my clients have no money upfront?
Offer bank products such as refund transfers. The client’s fee is taken from their federal refund, and you receive your share after the refund is processed.
How many clients do I need in my first year?
There is no minimum. Many new preparers file 50 to 150 returns in their first season, mostly through friends, family, and referrals.
Do I need an LLC to start a tax business?
No. You can start as a sole proprietor. An LLC adds liability protection and can be formed later when your income grows.
