Industry revenue of “tax preparation services“ in the U.S. 2011-2023

Industry revenue of “tax preparation services“ in the U.S. from 2011 to 2023 (in million U.S. Dollars)

by Philipp Huhn, last edited Oct 16, 2019
Industry revenue of “tax preparation services“ in the U.S. 2011-2023 The fact that income tax filing is mandatory for all eligible citizens of a particular country, drives the tax preparation service industry, which has registered sustained growth for long to value over seven billion U.S. dollars by 2017. In fact, the accounting, tax preparation, bookkeeping, and payroll services industry led the list of the most profitable industries in the U.S. in 2016. However, with the intrusion of several tech-based companies and easy to use DIY financial software modules, the industry is expected to experience restricted growth over the next few years.

Younger people do not prefer using tax consultation services

The individual income tax segment, that accounts for a majority share in government tax revenue has been a lucrative segment for tax preparation service providers primarily due to the huge number of taxpayers. Although, the increase in level of employment and GDP portrays an encouraging picture about the potential market for the industry, the preference towards the use of tax filing software and apps by younger generation is of significant concern.

Interestingly, the service providers are also using tax software to prepare their clients' tax returns as well. According to the latest survey by AICPA (Journal of Accountancy), tax preparation software such as CCH ProSystem fx, UltraTax CS and Lacerte were used by more than 75% of chartered public accountants (CPAs) in 2017.

TurboTax spent maximum on TV advertisement

Increased competition in the industry from existing players and the new entrants including FinTech companies who provide app-based tax filing services have led the industry heavyweights to spend on different media to reach out to the potential customers. As such, the leading service providers spent over 190 million U.S. dollar on TV advertising during the 2018 tax season. TurboTax and H&R Block accounted for more than 90% of advertisement spending.
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Industry revenue of “tax preparation services“ in the U.S. from 2011 to 2023 (in million U.S. Dollars)

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