This isn’t another blog about how outsourcing tax preparation to India saves money or benefits from currency arbitrage.
The real issue independent CPAs need to address? Employee retention. And Outsourcing tax preparation is a way to do it.
I recently came across a subreddit where a firm owner shared their nightmare: two key employees left just before tax season, leaving them with 5,000 returns to manage—and no luck finding onshore part-time help.
It’s a stark reminder of the talent landscape in the U.S. accounting industry today.
In this blog, we’ll dive into this pressing issue and explore how outsourcing tax preparation can help retain top talent in your CPA firm—especially during tax season. Let’s get into it.
The accounting industry is facing a growing gap between demand and supply of professionals.
Tax season, with its 10-week crunch, only makes things worse. During this time, tax firms scramble to find seasonal help, driving demand through the roof.
A shortage of accountants means skilled tax pros now hold the leverage. They can demand higher pay and choose firms offering the best benefits. This leaves employers competing fiercely for top talent, especially when extra hands during tax season can make or break the workload.
Experienced tax pros with years of expertise often ask for more compensation—and rightfully so. But not every tax firm can meet those demands, especially firms in high-cost living areas that haven’t transitioned to advisory work for better margins.
What happens next?
Tax pros leave. Tax Firms struggle to fill the position. When they do, they have to provide training to the new tax team. (Which might leave in future for a better salary)
But there’s a way out.
It starts with understanding the mindset of your top team and taking steps to bridge that gap before it’s too late.
Schedule a call here if your want to solve the employee churn problem in your tax firm with an offshore tax team
To uncover the real reason, you need to look at your tax firm through your employees’ eyes.
Ask yourself: Have you built the kind of firm you’d want to work in?
This means considering growth opportunities, fair compensation, benefits, and overall culture.
Here are a few potential reasons your top talent might be leaving:
1. Burnout During Tax Season
Endless hours, tight deadlines, and high stress during tax season are driving your best people out the door. Without enough support, even your most dedicated employees will start looking for better work-life balance elsewhere.
2. Lack of Competitive Compensation
Skilled tax professionals have leverage in today’s talent market. If your firm isn’t offering competitive pay, bonuses, or benefits, they’ll find a firm that does.
3. No Clear Growth Path
Top talent craves opportunities to grow. If your firm lacks a clear career progression or professional development opportunities, employees may feel stagnant and seek new challenges.
4. Poor Workload Management
When a few key employees shoulder the bulk of the workload, resentment builds. Uneven distribution of responsibilities or lack of support during peak seasons can push them to look for fairer conditions.
Tax firms today face a growing list of challenges—overworked staff, tight labor markets, and rising client demands. The solution lies in addressing these issues under three key categories:
A. Ideal Staff-to-Workload Ratio
Right now, your team is likely working at 2x capacity. You let this happen because you can’t afford to turn away returns, and hiring onshore staff feels impossible in this tight market.
Outsource tax preparation to an offshore tax team.
By shifting a portion of the workload beyond borders, you can alleviate the pressure on your existing staff and ensure deadlines are met without burning out your team.
B. Better Compensation
An offshore tax team can handle basic returns and administrative tasks at a fraction of the cost of onshore staff.
This cost efficiency frees up your budget, allowing you to:
Offer better compensation to your top onshore talent.
Retain key employees by showing you value their contributions.
C. Meaningful Work
Nobody thrives on repetitive, mundane tasks. By outsourcing tax prep to an offshore team, your onshore staff can focus on the complex tax returns and advisory services that bring excitement and fulfillment to their work.
This shift not only boosts morale but also positions your firm as a forward-thinking workplace where top talent thrives.
1. Reduced Workload During Peak Seasons
With an offshore team handling the high volume 1040 and other simple to medium tax returns, your onshore staff won’t feel buried under endless compliance tasks. This means fewer late nights and less burnout during the busiest months.
2. Better Work-Life Balance
When the workload is balanced between an offshore and onshore team, your staff can maintain a healthier work-life balance, especially during tax season. This helps retain top talent and keeps morale high.
3. Opportunity for Upskilling
Outsourcing tax prep frees up time for your team to focus on professional growth. They can focus on high-value work such as tax advisory, tax resolution make them more valuable to the firm.
4. Increased Job Satisfaction
When employees feel supported and aren’t overwhelmed by compliance tasks, their job satisfaction soars. Having an offshore tax team helps create a positive, productive work environment.
5. Higher Salaries
Outsourcing tax preparation can lower overhead costs, which opens up room for higher salaries or better benefits for your onshore staff, giving them another reason to stick around.
For many tax firm owners, hiring an offshore tax team still feels like uncharted territory. It’s a new concept, and naturally, it comes with plenty of questions and doubts.
Let’s break it down and tackle those doubts one by one.
Amid the ongoing talent shortage in the U.S., hiring offshore talent is becoming a smart move for tax firms.
There are 4 hiring models to outsource tax preparation
Need extra hands? This model supplements your current team by bringing in temporary or contract workers through a third party. The third-party handles communication, work transfers, and payments, making it a hands-off approach for you. But the involvement of a third party doesn’t let you deal directly with your tax preparer. It is more of black-box approach where tracking the status of your returns becomes a hassle.
Freelance tax professionals work as independent contractors, handling tax prep and reviews remotely. Whether domestic or international, you can find them on platforms like Fiverr. This approach allows you to communicate directly with your freelancer for a more personal working relationship.
In this model, you collaborate with an outsourced tax firm that provides a cohesive, fully trained team. Unlike staff augmentation or freelancing, you’re hiring a complete unit. For instance, if you’re in New York, you can hire a Texas-based tax team, significantly widening your talent pool while keeping things closer to home.
Partnering with offshore outsourcing firms gives you access to an experienced team working on a project basis. You’ll have direct communication with team members, ensuring transparency and streamlined collaboration—combining the flexibility of outsourcing with the structure of a dedicated team.
Tax pros know all about 7216 consent—the rule under IRC Section 7216 that ensures taxpayer privacy and legal compliance.
If you’re preparing returns for multiple clients, Section 7216 requires you to get written consent before using or sharing their tax information for anything beyond preparing their return.
This consent isn’t just about offshoring. A big misconception is that 7216 only applies when working with an international team, but it’s broader than that. Whether you’re storing client info in the U.S. or using software that processes data elsewhere, the same rules apply.
The IRS enforces this to protect taxpayer confidentiality and prevent unauthorized use of sensitive data.
What does this mean for offshoring?
You don’t need to explicitly inform your clients that their tax preparation involves an offshore team. However, you must let them know if you’re using a third party, regardless of location.
Related Read – What is 7216 Consent?
Outsourcing tax prep isn’t just about handing off work; it’s a structured process that ensures security, efficiency, and seamless collaboration. Here’s how it typically unfolds:
The journey begins with due diligence—researching and identifying the offshore tax prep partner that fits your firm’s needs. This involves evaluating their expertise, technology, data security measures, and client references.
Related Read – Choose the Best Offshore Accounting Partner for your CPA Firm
Once you’ve chosen a partner, they’ll conduct a staff fitment analysis to align their team with your requirements. This ensures the offshore professionals working on your returns are skilled in your preferred software and tax regulations.
There is a list of mistakes that tax firms offshoring first time should avoid. Check out here.
Modern offshore teams go beyond tax prep—they help set up project management tools for efficient tracking. Tools like TaxDome provides real-time updates on task progress, deadlines, and team assignments, giving you full control.
Your client data is handled with top-notch security.
At Credfino we use VDI (Virtual Desktop Infrastructure) or RDP (Remote Desktop Protocol), meaning the data stays on your servers. Offshore preparers and reviewers access the data remotely without transferring or storing it outside your system.
Here’s how the workflow looks:
Offshore Preparers handle the initial tax prep work based on the provided data.
Offshore Reviewers check for errors and ensure compliance.
Once reviewed, you’ll receive the returns for a final check.
Related Read – 1040 Tax Return Workflow for High-Volume Tax Returns
After your review, the completed returns are shared with clients for their feedback. Once approved, you file the returns as usual.
The Result?
A streamlined process that reduces your team’s workload.
Secure data handling with no compromise on client confidentiality.
Better time management, allowing you to focus on client relationships and advisory services.
At Credfino, we help accounting firms unlock the full potential of offshore support. As a trusted Offshore Accounting Services provider, we’re already partnering with over 100 CPAs and tax firms across the U.S. and Canada to build efficient, scalable remote teams.
We specialize in creating dedicated outsourced tax preparation teams that align with your firm’s culture and values—so you can skip the headaches of hiring, training, and managing offshore staff.
Want to solve employee retention issue and take a step towards offshored accounting?
Let’s talk about how Credfino can help you grow with a skilled, reliable offshore tax preparation team. Reach out today!
Your offshore tax team under white label tax preparation services will serve as an extension of your team, empowering you to brand the offshore tax services as your own.
Managing last-minute tax filing clients doesn’t have to derail your workflow. Here’s how you can stay in control and handle both existing and new clients
Every year, we watch tax pros go absolutely bananas from February to mid-April.
Why?
Because they’re cramming 52 weeks of work into just 15 weeks. And most tax pros have just accepted this madness as their FATE. They think it’s just “part of the job.”