Accountio / Templates / Tax season kit / Tax preparation engagement letter

Tax preparation engagement letter template for individual returns

Agree in writing which returns you will prepare, what is left out, what the client must give you and how you charge, before tax season starts. This tax preparation engagement letter template is one Word letter for Form 1040 clients, with a signed acceptance page.

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Tax season engagement and consent kit
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What the letter looks like

Tax preparation engagement letter template
What the letter agreesSection in the letter
Who the engagement is with
✓
Who we are acting forOne taxpayer or both spouses on a joint return, who must both sign
The returns you will prepare
✓
The work we will doForm 1040 and schedules, state resident and nonresident returns, and estimated tax vouchers if agreed
How you treat the client's information
✓
The work we will doYou don't audit it, you may ask for more, and you flag positions that could be challenged
Work that is left out
✓
What is not includedOther years and entities, gift tax returns, FBAR and Form 8938, bookkeeping, and representation in an examination
What the client must give you
✓
What we need from youThe questionnaire and documents by a date, records behind deductions, and prompt answers
Extra questions for credits
✓
What we need from youThe due diligence questions for the earned income credit, child tax credit, American opportunity credit and head of household status
E-file and errors in past returns
✓
Your return and our responsibilitiesThe signed Form 8879 before filing, and what you do if you find an earlier error
Due dates and extensions
✓
DeadlinesAn extension gives more time to file, not to pay
Fees and extra work
✓
Our feesA fixed fee or an estimate, when payment is due, and separate charges for IRS notices or amended returns
Protecting tax return information
✓
Confidentiality and your tax informationUse only for the engagement unless the client consents, software providers, and a warning about fake requests
Records and ending the engagement
✓
Records / Ending this engagementHow long you keep copies, who owns working papers, and how either side can end it
The client's signature
✓
AcceptanceSignature lines for the taxpayer and spouse, with dates

When to send it

Send an engagement letter before you start work for each tax year, so the client signs off on the scope before the documents arrive. The kit also has engagement letters for business returns (Forms 1065, 1120-S and 1120) and for trust and estate returns (Form 1041).

  • Each new individual client, before you start the return
  • Each existing client at the start of a new tax season
  • When the work changes, such as adding a state return or estimated tax vouchers
  • When a joint return becomes two separate returns

How to use the tax preparation engagement letter template

  1. Fill in the client and the tax year. For a joint return, name both spouses. Both sign the acceptance page.
  2. Pick the returns. Keep the state and nonresident lines that apply and delete the rest.
  3. Set your dates. The date you need documents by, the federal due date and the date after which you may file an extension.
  4. Choose the fee wording. A fixed fee or an estimate based on time, and whether payment is due before filing or within a set number of days.
  5. Send it with the intake questionnaire. Add any Section 7216 consents you need and start work when the signed letter comes back.

Questions

Do tax preparers need an engagement letter?

A signed letter is the clearest record of what you agreed to prepare, what you left out, and what the client agreed to provide. It also sets the fee before the work starts.

What should a tax preparation engagement letter include?

Who the engagement is with, the returns covered, what is not included, the client's duties, e-file authorisation, due dates and extensions, fees, confidentiality, records and how the engagement ends.

Do I need a new engagement letter every year?

Send one each tax season, because the year, the returns and the fee change. The letter is written for one tax year and ends when you deliver that year's returns.

What happens if I find an error in a client's earlier return?

Under Circular 230, a practitioner who learns of an error or omission in a return the client filed must tell the client promptly and explain the consequences. The letter says you will do this and won't correct it without the client's permission.

Does an extension give the client more time to pay?

No. An extension gives more time to file, to October 15 for most individuals, but any tax owed is still due on the April deadline. The letter states this.

Also in the tax season engagement and consent kit

Engagement letter for business returnsEngagement letter for trust and estate returnsDisengagement letterConsent to use tax return informationConsent to disclose tax return informationConsent to disclose tax return information to a software or AI providerSection 7216 consent guideClient intake questionnaireDue diligence questionnairesDue diligence log

See the whole pack →

Who it's for

Small CPA, EA and tax preparer firms that prepare individual returns.

Last checked

Checked against Circular 230, IRS due diligence rules and IRS guidance on extensions and record keeping in November 2026.