Latest / The Side Hustle Career Podcast with Fexingo: Second Income, Freelancing While Employed / How an Accountant Built a 4000 Monthly Tax Prep Side Hustle
Transcript
- Lucas: So, tax season just wrapped up a month ago, and I've been thinking about a side hustle that's incredibly seasonal but also incredibly lucrative, if you have the right credentials. Luna: You're talking about tax preparation, aren't you? I know a few CPAs who basically double their income from January to April. Lucas: Exactly. And today, we're looking at a specific story: Maria, a staff accountant at a mid-size regional firm, who built a $4,000 monthly side hustle preparing taxes for freelancers and small business owners. She's not a CPA yet—she's an Enrolled Agent, which is actually a credential a lot of people don't know about. Luna: Wait, what's the difference between an EA and a CPA? I think our listeners might need that baseline. Lucas: Great question. A CPA is a state-licensed accountant who can audit financial statements and represent clients before the IRS. An Enrolled Agent is federally licensed—they specialize in tax representation and can prepare returns for anyone in any state. Maria went the EA route because it's cheaper and faster to get, and it's more than sufficient for individual and small business returns. Luna: So she didn't need to be a CPA to pull in four grand a month. That's encouraging for accountants who might think they need more credentials. Lucas: Exactly. She started in January 2025, her first tax season going solo. She already had two years of experience at her firm preparing returns, so she knew the software and the common issues. But the key insight was her niche: she decided to only serve freelancers and solo business owners—think graphic designers, consultants, Etsy sellers. No partnerships, no corporations, no complex multi-state returns. Luna: That makes sense. Freelancers often have messy 1099s, home office deductions, and they're usually looking for someone who gets their industry. Maria could position herself as the freelancer's tax person. Lucas: Right. And she didn't underprice herself. She charged a flat $350 per return, which is actually on the lower end for an EA—many CPAs charge $500 to $800 for a freelancer return. But she kept it simple: no hourly billing, no surprises. For a straightforward Schedule C with a few deductions, the client pays $350. She aimed for 15 clients a month during tax season, which gave her $5,250 in gross revenue. After software, e-file fees, and a little marketing, she cleared around $4,000. Luna: Fifteen returns a month—that's about one every two days. With a full-time job, that's a lot. How did she manage the workload? Lucas: She was very disciplined. She blocked out three hours every evening from 7 to 10 PM during the week, and then six hours each Saturday. Sundays were completely off. She also used a client portal where people uploaded their documents automatically, so she wasn't wasting time chasing paper. And she had a cutoff: no new clients after March 15th, so the last two weeks were just finishing up returns and filing extensions. Luna: That's smart—you don't want to be taking on new work when you're trying to get everything out the door. But I'm wondering, did her employer have a problem with her doing tax prep on the side? Luna: I imagine a lot of accounting firms have policies against moonlighting, especially during tax season. Lucas: That was actually her biggest concern. She checked her employee handbook, and it said she couldn't work for a 'competing firm' or prepare returns for clients of her employer. But her side clients were all individuals and small businesses that her firm would never take on—her firm only does corporate and high-net-worth work. She also made sure she wasn't using any firm resources: no firm laptop, no firm software, no firm data. She bought her own license for Drake Tax, which is about $1,500 a year. Luna: So she was very careful about the legal and ethical boundaries. That's essential, because if you get caught violating a moonlighting policy, you could lose your job and your license. Lucas: Absolutely. She also carried her own professional liability insurance, which cost about $400 a year. It's a must—if you make a mistake on a return, you need coverage. Her employer's policy wouldn't cover side work. Luna: Let's talk about marketing. How did she find 15 clients a month as a brand-new solo preparer? Lucas: She started with her existing network. She posted on LinkedIn and her personal Facebook that she was taking on a limited number of tax clients for the season. She also joined three Facebook groups for freelancers in her city—like 'Austin Freelancers' and 'Creative Pros of Austin'—and she would answer tax questions generously. Not promoting herself, just being helpful. That built trust. She also offered a referral discount: if a current client referred someone, both parties got $50 off their next return. Luna: word of mouth is huge for tax prep. People are nervous about taxes, so they want someone recommended by a friend. Did she also have a website? Lucas: She had a simple one-page site with her bio, services, pricing, and a contact form. Nothing fancy. She spent $100 on Google Ads for the first two weeks of January, targeting searches like 'freelancer tax preparer Austin' and 'self-employed tax help'. That brought in maybe two or three clients. But most came from referrals and the Facebook groups. Luna: So the total investment to start was about $2,000: the software license, insurance, a basic website, and some ads. And she made that back in the first month. Lucas: Less than that, actually. She had the website from a previous project, so the only real costs were software and insurance—about $1,900 total. She made that back by the end of January. The rest of the season was pure profit. Luna: Now, what about the off-season? Tax prep is seasonal. Does she do anything from May to December? Lucas: She does a few things. She offers quarterly estimated tax planning for a flat $200 per session. That's a nice way to stay in touch with clients and generate some income year-round. She also does a few amended returns and helps clients with IRS notices. But mostly, she uses the off-season to take courses, earn continuing education credits, and plan for next year. Her goal is to grow to 25 clients per season within three years. Luna: That seems doable. And if she scales, she could eventually leave her full-time job. But she told us she actually likes her job—the side hustle is purely for extra income and building her own book of business. Lucas: Yeah, she sees it as a safety net and a way to test the waters before going full-time. I think that's a smart approach. Now, for our listeners who are accountants or tax preparers, here are the key takeaways. One: get the right credential—an EA is cheaper and faster than a CPA, and it's enough for individual and small business returns. Two: niche down to a specific client type so you can become an expert and charge accordingly. Three: be ultra-careful about your employer's policies and never use their resources. Four: price simply and transparently—flat fees work well for standard returns. Luna: And five: start marketing early. October or November is the time to start building your pipeline, not January. Maria started posting in November and had a few clients lined up before the season even began. Lucas: Great point. So if you're a licensed tax professional or considering becoming one, this is a very concrete path to a few thousand dollars a month with relatively low startup costs. And the demand isn't going anywhere—as long as people have to file taxes, they'll need help. Luna: If today was actually useful to you, the way these episodes stay ad-free is listener support. You can buy me a coffee at buy me a coffee dot com slash fexingo. It really helps us keep the show going without sponsors or interruptions. Lucas: Yeah, it's a small way to say this content matters to you, and it lets us stay focused on what we do best—finding real stories and practical advice. So if you've gotten value from today, consider throwing a few dollars in the virtual tip jar. Luna: Exactly. Now, back to tax prep—one thing Maria mentioned that I thought was clever: she sends her clients a 'tax season prep checklist' in December, so they have their documents ready by mid-January. That reduces the back and forth and makes her look super organized. Lucas: That's a great client experience play. And it also saves her time, which is her most valuable resource during tax season. So, if you're thinking about starting a tax prep side hustle, start with the checklist, get your EA, and test the waters with a few friends and family this year. By next tax season, you could be Maria. Luna: And if you already have a side hustle in a different area, let us know—we love hearing from listeners. For now, thanks for tuning in, and we'll catch you next time.