Tax Preparation Outsourcing: 4 Staffing Models for Tax Firms

Running a tax firm with a team of tax pros on board but still struggling with capacity during tax season? Tax Preparation Outsourcing can help.

There are a few common reasons staff shortage in tax season:

Ongoing accountant shortage across the U.S.

Limited local talent pool for tax professionals

Seasonal rush that overwhelms in-house capacity

Challenges in retaining employees due to pricing constraints

There are multiple ways of Capacity Management in Tax & Accounting Firm to avoid burnout.

One smart solution to keep client work flowing is Tax Preparation Outsourcing. But with so many staffing models available, which one’s the right fit for your firm?

In this blog, we’ll break down 4 staffing models and weigh the pros and cons of each to help you make the best choice.

Let’s dive in!

4 Staffing Models for Tax Firms to Outsource Tax Preparation

Staff Augmentation

This model brings in extra hands to supplement your current team by hiring temporary or contract workers through a third party. Usually, third-party handles communication, work transfers, and payments, making it a hands-off approach for tax firms.

Freelancers

Freelance tax pros are independent contractors who can handle tax prep and review remotely, either domestically or internationally. Under this Tax Preparation Outsourcing model, you typically find them on platforms like Fiverr, where you can communicate directly with your chosen freelancer, allowing for a more personal connection.

Remote Nearshoring

In this model, you work with an outsourced tax firm that provides a fully trained tax team, ready to handle tasks as a cohesive unit. Unlike staff augmentation or freelancing, this option gives you a complete team rather than individual contributors. While being in New York, you can hire a Texas based tax team which widens the talent pool.

Professional Offshore Outsourcing Partners

By partnering with professional offshore outsourcing firms, you get an experienced team based offshore, delivering work on a project basis. Direct communication with team members ensures transparency and streamlined collaboration, blending the benefits of outsourcing with the advantages of a dedicated offshore setup.

Let’s examine these four tax outsourcing models in detail, each with its pros and cons, to help you decide on the best fit for your firm.

Staff Augmentation for Outsourcing Tax Preparation

What It Is:

Staff augmentation is a Tax Preparation Outsourcing model where you bring in contract workers temporarily—typically through a third-party provider—to add flexibility to your team.

In this setup, the third party manages everything from hiring and onboarding to payments and work assignments. You communicate with the provider, and they handle the logistics.

For example, platforms like TaxFyle offer staff augmentation for accounting firms. Here’s a snapshot of how it works:

Tax Firm collects PBCs → Staff sends docs to TaxFyle → TaxFyle shares data with TaxFyle Pro (freelancer)

TaxFyle Pro provides open items to TaxFyle → TaxFyle communicates to Firm member → Firm member answers → Back to TaxFyle Pro

See the issue? TaxFyle is the middleman, adding layers to the process.

Wouldn’t it be simpler to work directly with the team handling your project?

Skip the middleman and streamline your tax preparation outsourcing with Credfino.

Pros:

Quick Access to Talent: Third-party providers often have a pool of experienced professionals ready to jump in, ideal for high-demand seasons.

No Long-Term Commitment: This is a temporary solution, so you avoid the expenses and commitment of permanent hiring.

Scalable Flexibility: Staff augmentation lets you scale your team based on demand, keeping your costs efficient.

Cons:

Limited Control: Communication is indirect, limiting oversight and making it harder to ensure work is managed to your standards.

Potential for Miscommunication: Without direct contact, instructions or details might get lost in translation, impacting quality.

Added Cost: The middleman factor can mean extra fees, making this option more costly than direct outsourcing.

Is Staff Augmentation Right for You?

If you need fast, short-term support and don’t mind working through a third party, staff augmentation could be a good fit.

But if you value direct control over who’s handling client work, you may want to explore other options.

Freelancers for Outsourcing Tax Preparation

What It Is:

Freelancers hiring sites give you direct access to independent tax professionals who work remotely, either locally or internationally.

Platforms like Fiverr or Upwork connect you with freelancers, allowing you to communicate with them directly for a hands-on approach.

Pros:

Direct Communication: Unlike staff augmentation, you connect directly with the freelancer, giving you more control over instructions and project management.

Cost-Effective: Freelancers often charge lower rates than third-party services, especially those based internationally. Plus, you only pay for work completed—cutting down on overhead.

High Flexibility: Freelancers can be hired on a project basis, making them ideal for one-time tasks. You can adjust the scope as project demands shift.

Cons:

Quality Variability: Experience and skill level can vary widely among freelancers, so finding a reliable fit may take some trial and error.

Lack of Continuity: Since freelancers often juggle multiple clients, consistency and availability may be limited, especially during busy seasons.

Administrative Burden: Managing multiple freelancers and ensuring they meet deadlines can add strain to your team.

Is Freelancing Right for You?

Freelancers can be a cost-effective option for tax firms looking to maintain direct control. If you’re ready to manage freelancers hands-on and are comfortable with some variability, freelancing could be a solid solution.

Remote Nearshoring

What It Is:

Remote nearshoring means hiring a full team of tax professionals from a nearby country or from other USA state, often in a similar time zone.

Unlike freelancing or staff augmentation, you get a complete, trained team provided by an outsourced tax firm, with minimal time needed for onboarding.

Pros:

Complete, Trained Team: The outsourcing firm manages team selection and training, giving you a skilled team ready to work.

Time Zone Compatibility: Nearshoring often places your team in similar or overlapping time zones, making real-time communication and collaboration easier.

Cons:

Quality Depends on the Vendor: The team’s expertise and quality can vary depending on the provider you choose, and switching providers midstream can cause disruptions.

Higher Cost than Freelancers: Although typically less expensive than onshore staffing, nearshoring a complete team can cost more than hiring individual freelancers.

Narrow Talent Pool: Shortage of accountants in USA is not a news. Often times finding skilled talent even with remote work facility becomes a challenge.

Is Remote Nearshoring Right for You?

If you’re looking for a dedicated, skilled team within a similar time zone but without the high local costs, remote nearshoring could be an ideal fit. This model gives you a structured team setup but be sure to pick a reputable vendor to ensure consistent quality.

Professional Offshore Outsourcing Partners

What It Is:

Professional offshore outsourcing means partnering with a provider that supplies a full team to handle your tax work.

Unlike freelancing or staff augmentation, this model gives you both cost savings and high control, as you communicate directly with your offshore team members—bringing transparency and accountability.

Pros:

Learning and Development: Many offshore partners invest in training for their staff, bringing continuous skill enhancement that benefits your firm.

Aligned Vision: Offshore staff can be trained to understand and support your firm’s vision and goals.

Increased Profitability: With lower costs, hiring offshore accountants can significantly boost profitability.

Focus on Clients: Onshore staff can dedicate more time to client-facing work, while offshore teams handle backend tasks.

Direct Involvement: You have the option to directly manage offshore employees, keeping processes transparent and efficient.

Client Communication: Offshore staff can grow with your firm and eventually take on client communication roles as they gain experience.

Cons

Time Zones: Managing teams across different time zones requires strategic coordination for seamless collaboration.

Is Professional Offshore Outsourcing Right for You?

If cost savings and direct control are your priorities, professional offshore outsourcing could be ideal. This model is a great fit for firms needing a flexible, skilled team that can scale as your workload grows.

Which Model is Right for Your Tax Firm?

When selecting the best model for Tax Preparation Outsourcing consider your firm’s size, workload, budget, and the level of control you want to maintain.

For short-term projects or specialized tasks: Freelancers or outsourcing companies can be a practical choice.

For ongoing needs and cost-effectiveness: A professional offshore accounting provider offers a comprehensive and scalable solution.

Here are a few essential factors to keep in mind:

Transparency and Control: Make sure the model provides the oversight you need to manage your data and processes effectively.

Communication and Time Zones: Assess how you’ll handle communication across time zones, and consider using tools to streamline global collaboration.

Scalability and Growth: Choose a model that can expand with your firm’s needs as you grow.

Meet Credfino

At Credfino, we’re bridging the gap for accounting and firms looking to benefit from offshore support. As a Professional Offshore Accounting Services Provider, we’re helping over 100 CPAs, tax firms and accounting firms across the U.S. and Canada build efficient, remote teams.

We focus on creating dedicated teams that integrate with your firm’s culture and values, saving you the time and complexity of hiring, training, and managing staff abroad.

Ready to scale up without the hassle? Reach out to Credfino to see how we can help your firm grow with a skilled, dedicated outsourced Tax Preparation team.