Paying off: Rising employment will increase demand, despite external competition from online providers

Over the past five years, the Tax Preparation Services industry has experienced solid growth as the unemployment rate fell, causing more Americans to file tax returns. Additionally, as per capita disposable income has risen, more consumers have had the resources to afford bringing their taxes to tax professionals. Throughout the period, the industry landscape has changed, with more options for consumers to prepare their tax return using electronic filing systems. Consumer preferences are increasingly trending toward online services, such as e-filing and the Internal Revenue Service's Free File. For some time, these services appeared to be a threat to this industry, as operators saw less demand from customers with tax returns that are simple to prepare on their own...purchase to read more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22
Market Share of Companies

Industry Threats & Opportunities

  • With more consumer options through electronic filing systems, the industry landscape has shifted
  • Regulators have become increasingly tough on the provision of RALs over the past five years
  • Industry businesses will need to focus on strategies to best integrate online and offline service offerings
  • Industry Report - Industry Investment Chapter

    The Tax Preparation Services industry is highly labor intensive, as much of the work done by industry operators must be completed manually. While operators have increasingly invested in capital equipment to automate some processes and offer software-related filing services to their clients, the vast majority of the day-to-day operations are completed by highly educated tax professionals. As a result, this industry exhibits a low level of capital intensity and IBISWorld estimates that for every dollar spent on wages, the industry spends $0.09 on capital.Wages represent the industry's largest expense, comprising an estimated 32.7% of revenue in 2017. Employees in this industry often have a complicated understanding of tax law and accounting. Fur...purchase to read more.

    Additional Insights for the Tax Preparation Services Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Tax Preparation Services Industry are

  • Experienced work force
  • Being part of a franchising chain
  • Provision of personalized services
  • IBISWorld analysts also discuss how external factors such as National unemployment rate and External competition for the Tax Preparation Services industry in the Tax Preparation Services industry impact industry performance..

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    What's in this report

    What is the Tax Preparation Services Industry?

    Firms in this industry provide tax return preparation services to individuals but do not offer accounting, bookkeeping, billing or payroll process services. Although the offices of CPAs are excluded from this industry, basic knowledge of tax law and filing requirements is required. Online tax return providers (see IBISWorld report OD4549, Tax Preparation Software Developers) do not fit within the scope of this industry.

    Industry Products
  • Basic tax preparation services
  • Standard tax preparation services
  • Full-service tax preparation services
  • Tax-related financial products
  • Industry Activities
  • Income tax compilation services
  • Income tax return preparation services
  • Other tax return preparation services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • National unemployment rate
  • External competition for the Tax Preparation Services industry
  • Percentage of services conducted online
  • Regulation for the Tax Preparation Services sector

  • Current Performance
  • Electronic filing
  • Refund anticipation checks
  • Increasing profit
  • Chart: Revenue Growth

  • Industry Outlook
  • Electronic filing options
  • Provider resistance
  • Other financial products
  • Increasing regulation
  • Table: Tax Preparation Services Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Tax Preparation Services Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Internet Service Providers
  • Law Firms
  • Promotional Products
  • Software Publishing

  • Products & Services
  • Standard tax preparation services
  • Basic tax preparation services
  • Full-service tax preparation services
  • Tax-related financial products
  • Chart: Tax Preparation Services Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Individuals with income of $29,999 or less
  • Individuals with income from $30,000 to $74,999
  • Individuals with income of $75,000 or more
  • Businesses
  • Government agencies, nonprofits and other
  • Chart: Major Market Segmentation for the Tax Preparation Services Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesMarketing and other
  • Chart: Cost Structure Benchmarking – Sector vs Tax Preparation Services

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Tax Preparation Services Industry

  • Industry Globalization
    H&R Block Inc., Intuit Inc.,
  • Table: H&R Block Inc. - financial performance
  • Table: Intuit Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Tax Preparation Services Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Tax Preparation Services Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Total employees in the US (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Free File Alliance
  • A public-private partnership with the IRS and a group of tax preparation providers that provides free electronic tax filing services for US taxpayers.
  • Internal Revenue Service (Irs)
  • The federal government agency responsible for collecting taxes and enforcing the internal revenue code.
  • Preparer Tax Identification Number (Ptin)
  • A unique identification number that is required for all paid tax return preparers.
  • Refund Anticipation Loan (Ral)
  • A loan that is made by a lender based on an anticipated federal income tax refund.
  • What Our Customers Say

    Why buy this report?

    The Tax Preparation Services Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Tax Preparation Services:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Tax Preparation Services market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Tax Preparation Services, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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