Tax Season Capacity: Measure Returns per Preparer Before You Hire

Busy season is over, and the question on your desk is whether to hire for next year. Your preparers worked late, the Reviewer's stack never got short, and a few clients waited longer than you promised. A seasonal hire looks like the obvious fix.

Maybe it is. But a hire adds hours without showing you where the current hours went. Tax season capacity planning starts with one number from your own season, returns per preparer, and one question behind it. Of the hours each return took, how many went to work only a preparer can do, and how many went to chasing documents and redoing work the Reviewer sent back?

This piece gives you a worksheet to answer that from last season's records before you post the job. It uses no industry benchmark. The only numbers that count here are yours.

Hiring is the expensive answer

Staffing for busy season with a hire is a real fix when your preparers are full of real work. When they aren't, it's an expensive way to find out.

What a seasonal hire costs the owner

Wages are the part you budget for. The rest arrives with them:

• Recruiting and interviewing, and the hours someone at the firm spends on both.
• Training on your firm's workflow, your tax software, and your review standards.
• Slower first weeks while the new preparer learns where things live.
• More of the Reviewer's time, because a preparer new to your firm's habits can send more files back.
• Access and setup: logins, devices, and permissions on client data.
• All of it again next season if the hire doesn't come back.

One more cost never shows up on an invoice. Every preparer you add sends files to the same Reviewer, or the same few. If review is already where files wait, a hire makes that line longer.

So count first. The worksheet below runs on records you already have, and a hire can commit you to a whole season.

Where preparer hours go per return

Pick a typical return from last season and follow the preparer's hours. Sort them into four buckets:

1. Chasing documents and answering client questions.
2. Data entry and tie-out.
3. Prep judgment: the treatment calls, the questions for the Reviewer, the work you hired a preparer to do.
4. Rework after a send-back.

Buckets 1 and 4 are where the worksheet looks for hours you can win back. Bucket 3 is the job.

The best source for these hours is a time log kept during the season. If you don't keep one, here's a way to log preparer and Reviewer minutes per file that you can start on your next batch. Until then, sample: have each preparer track a handful of returns for two weeks, split by bucket, and mark every estimate as an estimate. Labeled estimates are fine. You'll know which lines to firm up later.

Chasing documents

This is the time between "we need your brokerage statement" and the statement landing in the folder. It covers the request, the follow-ups, the client call asking which form you meant, and reopening the return when a corrected form arrives after you thought it was done. Log it as its own line, or it hides inside every other bucket.

Data entry

Keying figures from source documents into your tax software, then checking that what you keyed ties back to the totals printed on the documents. Count the tie-out with the entry.

Send-backs after review

Each send-back costs twice. The preparer reopens a return they'd already closed in their head, and the Reviewer reads the same return a second time. Count send-backs from review notes, then sort the notes by cause: a missing document, a figure the Reviewer couldn't trace, a treatment question. A season-end send-back review shows one way to do the sort. The cause tells you which fix to try first.

The capacity worksheet

How many tax returns can one preparer do? Line G answers that for your firm, from your own season. Fill in one worksheet per preparer. Use whole-season totals where you have them and a sample average where you don't.

Inputs from last season

Worked example (synthetic)

These numbers are invented to show the arithmetic. They aren't a benchmark, and they aren't a result from TracePrep or from any firm.

One preparer at a made-up firm, Doe Tax Partners:

Doe Tax Partners has two preparers with the same profile, so K across the team is 400 hours.

Reading the result

Check three things, in this order.

1. Were preparers full? Compare H with B. If hours used sit well below hours available, preparer time probably wasn't the limit. Look for where files waited (on clients, on review, or on both) and for hours the log missed, before you hire. In the example, 500 of 520 hours were used, so this preparer was close to full.
2. Do recoverable hours beat a hire? Compare K across the team with E. In the example, chasing and rework took 400 hours across two preparers, more than the 300 net hours the hire would add. That doesn't mean you can recover all 400. It means the hire isn't the only answer, and it may not be the first one to test.
3. Is the work mostly judgment? If C3 makes up most of F and preparers were full, the hours are going to work only preparers can do. That's the case for a hire.

D and C4 together tell you what kind of rework you have. In the example, 20 returns came back and took 100 hours of rework between them, an average of five hours per returned file. A few returns with heavy rework can point to one cause worth fixing before next season.

What to change first

Start where the worksheet points, change one stage at a time, and run the worksheet again partway through the next season. Change three things at once and you won't know which one moved the number.

Triage

If C1 is large, look at what happens before anyone drafts. Set up each client folder the same way (setting up the client folder before any AI pass walks through it), then read each folder once at intake to decide which returns are complete, which are missing items, and which go first. A triage rubric for which files get an AI pass first gives you a starting order.

Request lists

If your notes show the same client asked for documents three separate times, the first fix to try is one complete list sent at triage. Then follow up on a fixed cadence instead of whenever someone remembers. See building the client request list and a client follow-up cadence.

A handoff the Reviewer can check

If C4 is large, go back to the causes you sorted from the send-back notes. Where the cause is a figure the Reviewer couldn't trace or an open item nobody flagged, the fix to try sits in the handoff: each figure pointing to its source page, open items listed with what's missing, and a short handoff note on top. Try any change on a few files before the whole book. A five-file pilot shows one way to set that up.

Where TracePrep fits

TracePrep is tax-prep software for CPA and EA firms. The outcome it aims at is a return draft ready for your own Reviewer to review. The plugin turns a client folder into a ready-to-enter workbook, with every figure traced to a source document and every missing item already asked. The plugin drafts; the Firm's preparer prepares; the Reviewer signs off. Access to the plugin is by waitlist, and how it works shows the steps.

Whatever you change, TracePrep included, run the worksheet again on the same kind of returns. Act on your own numbers.

Count before you hire

If your preparers were full of judgment work, hire, and use the worksheet to size the hire. If their hours went to chasing and rework, fix those first and measure again partway through the season. When you want to see drafts built with every figure traced and every missing item asked, join the TracePrep waitlist.

<!-- lint-ignore: missing-required-reciprocal-anchor per brand form v4.0 plugin-copy rule -->

Not tax advice. TracePrep is a software product from TracePrep Inc., not a CPA firm. This content is operator experience for educational purposes; it is not tax advice and has not been reviewed by a licensed CPA. Consult a qualified tax professional for guidance on your specific situation. Source citations in TracePrep workpapers support audit defense but do not guarantee IRS outcomes.