Most CPA firms don't have a client problem. They have a capacity problem. There are more returns than hours between January and April, and hiring a seasonal preparer is slow, expensive and hard to undo. Outsourced tax preparation gives you trained preparers who work inside your process, so you can take on more work without adding headcount.
What outsourced tax prep is, and isn't
An outsourced preparer works as an extension of your firm. They prepare returns in your software, following your workpaper standards, and hand them back to you for review. Your firm stays the preparer of record, signs the return and owns the client relationship. A good outsourcing partner never contacts or solicits your clients.
Which returns to send
Firms usually start with the returns that take the most preparer time and the least partner judgment:
Individual returns (1040) with W-2s, 1099s, Schedule C, Schedule E rentals and K-1s
Partnership returns (1065)
S corporation returns (1120-S)
C corporation returns (1120)
Trust and estate returns (1041)
Many firms also outsource the bookkeeping cleanup that has to happen before a business return can be prepared.
How the work flows
Intake. You share source documents through your portal, such as TaxDome or SurePrep, or give secure access to your workpaper folder.
Preparation. The preparer works in your tax software, such as CCH Axcess, UltraTax CS, ProConnect or ProSeries, and builds workpapers to your standard.
Open items. Missing documents and questions come back to you in a list, so your team decides what goes to the client.
Review. You review, make any changes, sign and file.
How pricing works
Outsourced prep is usually priced per return or per hour. Hourly pricing is common for firms whose returns vary a lot in complexity, because you pay for the time each return actually takes. Look for a partner with no minimum hours, so you can scale up in March and back down in June.
What to look for in a partner
Experience in your tax software and your return types
A clear security process for client data
Daily status updates during busy season
A non-solicitation commitment in writing
We cover the security questions in more detail in what to ask before you outsource tax prep.
Locus Point prepares returns for CPA firms under your letterhead, in your software, with no minimum hours. See how we work with firms or book an intro call.