GITNUXREPORT 2025

Tax Preparation Industry Statistics

US tax industry earns $11.2B with growing digital and AI adoption.

Jannik Linder

Co-Founder of Gitnux, specialized in content and tech since 2016.

First published: April 29, 2025

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Statistic 1

Approximately 60% of individual taxpayers use paid tax preparers to file their taxes

Statistic 2

The use of online tax preparation services increased by 15% between 2020 and 2022

Statistic 3

Approximately 80% of individual tax filings are done electronically, reflecting a preference for digital services

Statistic 4

The majority of tax preparation services are utilized by middle-income households earning between $50,000 and $100,000 annually

Statistic 5

The share of virtual tax preparation services increased from 20% in 2020 to 38% in 2022, reflecting a shift toward remote services

Statistic 6

The average cost for comprehensive tax planning services offered by professionals is approximately $3,000 annually

Statistic 7

The use of customer self-service portals increased by over 35% in 2022, enhancing client engagement

Statistic 8

The average age of clients using tax preparation services is around 45 years, showing an aging client base that may influence future service offerings

Statistic 9

The most common software used by paid tax preparers in 2022 was TurboTax, utilized by over 55% of professionals

Statistic 10

In 2023, the most common client demographic for tax preparers are middle-aged individuals, between 40 and 60 years old, comprising around 65% of clients

Statistic 11

Approximately 50% of tax firms reported adopting green or sustainable practices in 2022, including paperless operations and eco-friendly offices

Statistic 12

On average, tax preparers spend about 10% of their time on client education and advising, in addition to filing services

Statistic 13

The average client retention rate for tax firms increased to 78% in 2022, owing to improved digital communication channels

Statistic 14

55% of tax preparers offer additional financial advisory services, such as retirement planning, along with their core tax services

Statistic 15

The average tax refund amount in 2022 was approximately $3,200, with professionally prepared returns more likely to yield higher refunds

Statistic 16

Around 20% of clients change their tax preparer annually, citing cost, trust, or service quality as primary reasons, indicating industry competition and client loyalty challenges

Statistic 17

The most common reason for non-compliance among taxpayers is misunderstanding of tax laws, a gap that trained tax preparers often help bridge

Statistic 18

The US tax preparation industry generated approximately $11.2 billion in revenue in 2022

Statistic 19

The average fee for a basic federal tax return preparation in 2022 was approximately $273

Statistic 20

Revenue from tax software sales made up roughly 40% of the total revenue in the tax preparation industry in 2022

Statistic 21

An estimated $11 billion is lost annually in unpaid taxes due to errors and fraud, which tax preparers help mitigate

Statistic 22

The global tax preparation industry is expected to grow at a compound annual growth rate (CAGR) of 4.5% from 2023 to 2030, reaching an estimated $25 billion

Statistic 23

Small to mid-sized tax preparation firms account for roughly 70% of the market share in U.S. personal tax services

Statistic 24

The industry experienced a 5% decline in revenue during 2020 due to the COVID-19 pandemic, with recovery beginning in 2021

Statistic 25

Income from consulting and advisory services by tax pros increased by 18% in 2022, supplementing traditional preparation services

Statistic 26

The market size for automated tax filing software was valued at $2.3 billion in 2022 and is expected to grow annually by 6.8%

Statistic 27

The number of international tax consulting cases handled by U.S. firms increased by 12% in 2022, driven by globalization

Statistic 28

The average turnaround time for tax return processing by professionals decreased to 3 days in 2022, from 5 days in 2020

Statistic 29

Tax preparation firms reported a 12% increase in client retention rates in 2022 after implementing new customer relationship management software

Statistic 30

Around 45% of tax preparers report experiencing increased cybersecurity threats in 2022, prompting new data protection measures

Statistic 31

The adoption of AI-powered tax software reduced processing errors by approximately 25% in 2022, improving accuracy

Statistic 32

During the 2022 tax season, approximately 82% of returns were prepared electronically, up from 75% in 2020, illustrating increased digital adoption

Statistic 33

In 2022, around 10% of tax preparers offered virtual consultation sessions exclusively, reflecting emerging service trends

Statistic 34

Around 40% of tax professionals believe that blockchain technology will significantly impact tax preparation and compliance processes in the next decade

Statistic 35

The average annual expenditure on tax software and tools per preparer is estimated at $2,500, indicating significant investment in technology

Statistic 36

The use of data analytics by tax firms increased by 22% in 2022 to improve client insights and service customization

Statistic 37

The number of mobile apps dedicated to tax preparation increased by 30% in 2022, offering on-the-go solutions to consumers

Statistic 38

Investment in cybersecurity by tax firms increased by 35% from 2021 to 2023, reflecting the rising threat landscape

Statistic 39

Nearly 70% of tax professionals believe that blockchain will play a crucial role in future tax record-keeping

Statistic 40

Over 85% of tax preparers in 2022 reported using some form of automation in their workflow, from data entry to reporting

Statistic 41

In 2023, 65% of solo tax preparers reported using cloud-based accounting and tax solutions, indicating digital transition

Statistic 42

The adoption of artificial intelligence in tax preparation is expected to reduce operational costs by up to 20% by 2025, analysts predict

Statistic 43

The median annual wage for tax preparers was $47,820 in May 2022

Statistic 44

The industry’s compliance rate with IRS regulations is around 97%, indicating high adherence levels

Statistic 45

There are over 600,000 tax preparers employed in the United States as of 2023

Statistic 46

The number of paid tax preparers has grown by 4% annually over the past five years

Statistic 47

In 2023, about 30% of tax preparers are employed by large firms or corporations

Statistic 48

Tax preparers’ employment is projected to decline slightly by 1% from 2022 to 2032

Statistic 49

The majority of tax preparers (approximately 75%) hold at least an associate’s degree

Statistic 50

Small accounting firms constitute about 65% of all tax preparers in the US

Statistic 51

Over 50% of tax preparers are women in the United States

Statistic 52

The demand for bilingual tax preparers increased by 10% over the past two years, due to rising immigrant populations

Statistic 53

The most common tax preparation certification is the IRS Annual Filing Season Program, held by about 65% of paid preparers

Statistic 54

The average age of a tax preparer in 2023 is approximately 45 years old, indicating a relatively mature workforce

Statistic 55

The average number of clients served per tax preparer in 2022 was around 150, up from 120 in 2020

Statistic 56

Approximately 25% of tax preparers work independently as sole proprietors

Statistic 57

The top three states with the highest number of tax preparers are California, Texas, and Florida

Statistic 58

Nearly 50% of tax preparers have reported an increase in demand following recent tax law changes in 2023

Statistic 59

A survey found that 72% of tax professionals believe that automation and AI will revolutionize the industry by 2030

Statistic 60

The number of tax preparers with professional certifications doubled between 2019 and 2022, reflecting industry standards' growth

Statistic 61

The average number of hours a full-time tax preparer works annually is approximately 1,800 hours, with variations depending on peak seasons

Statistic 62

About 15% of tax professionals offer specialized services such as estate planning, audit defense, or international tax, reflecting diversification in the industry

Statistic 63

As of 2023, only about 45% of tax preparers are members of professional organizations like NATP or NSA, indicating room for greater industry networking

Statistic 64

35% of tax preparers reported higher operating costs in 2022, primarily due to increased cybersecurity and compliance expenses

Statistic 65

The number of self-employed tax preparers is growing at a rate of approximately 6% per year, indicating increasing entrepreneurship within the industry

Statistic 66

The percentage of tax preparers with a CPA or EA credential increased by 10% from 2019 to 2022, reflecting higher professionalism standards

Statistic 67

The typical tax season is approximately four months long, with peak activity in March and April, but some preparers work year-round

Statistic 68

Tax preparation industry employment is projected to decline by 1% due to automation and AI replacing some roles, but demand for highly skilled professionals will remain robust

Statistic 69

The number of tax preparers offering virtual or hybrid services increased significantly during the COVID-19 pandemic and has remained stable

Statistic 70

The average number of years tax preparers stay in the industry before changing careers is approximately 10 years, indicating a stable workforce

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Key Highlights

The US tax preparation industry generated approximately $11.2 billion in revenue in 2022
There are over 600,000 tax preparers employed in the United States as of 2023
The median annual wage for tax preparers was $47,820 in May 2022
Approximately 60% of individual taxpayers use paid tax preparers to file their taxes
The number of paid tax preparers has grown by 4% annually over the past five years
In 2023, about 30% of tax preparers are employed by large firms or corporations
The average fee for a basic federal tax return preparation in 2022 was approximately $273
The use of online tax preparation services increased by 15% between 2020 and 2022
Tax preparers’ employment is projected to decline slightly by 1% from 2022 to 2032
The majority of tax preparers (approximately 75%) hold at least an associate’s degree
Revenue from tax software sales made up roughly 40% of the total revenue in the tax preparation industry in 2022
Small accounting firms constitute about 65% of all tax preparers in the US
The average turnaround time for tax return processing by professionals decreased to 3 days in 2022, from 5 days in 2020

With the US tax preparation industry raking in over $11 billion in 2022 and rapidly evolving through digital innovation and automation, it’s clear this vital sector is redefining how millions navigate their taxes while facing new opportunities and challenges.

Client Behaviors and Preferences

Approximately 60% of individual taxpayers use paid tax preparers to file their taxes
The use of online tax preparation services increased by 15% between 2020 and 2022
Approximately 80% of individual tax filings are done electronically, reflecting a preference for digital services
The majority of tax preparation services are utilized by middle-income households earning between $50,000 and $100,000 annually
The share of virtual tax preparation services increased from 20% in 2020 to 38% in 2022, reflecting a shift toward remote services
The average cost for comprehensive tax planning services offered by professionals is approximately $3,000 annually
The use of customer self-service portals increased by over 35% in 2022, enhancing client engagement
The average age of clients using tax preparation services is around 45 years, showing an aging client base that may influence future service offerings
The most common software used by paid tax preparers in 2022 was TurboTax, utilized by over 55% of professionals
In 2023, the most common client demographic for tax preparers are middle-aged individuals, between 40 and 60 years old, comprising around 65% of clients
Approximately 50% of tax firms reported adopting green or sustainable practices in 2022, including paperless operations and eco-friendly offices
On average, tax preparers spend about 10% of their time on client education and advising, in addition to filing services
The average client retention rate for tax firms increased to 78% in 2022, owing to improved digital communication channels
55% of tax preparers offer additional financial advisory services, such as retirement planning, along with their core tax services
The average tax refund amount in 2022 was approximately $3,200, with professionally prepared returns more likely to yield higher refunds
Around 20% of clients change their tax preparer annually, citing cost, trust, or service quality as primary reasons, indicating industry competition and client loyalty challenges
The most common reason for non-compliance among taxpayers is misunderstanding of tax laws, a gap that trained tax preparers often help bridge

Client Behaviors and Preferences Interpretation

As digital and eco-friendly shifts accelerate in the $3,200 average refund landscape, middle-aged taxpayers—especially those earning between $50K and $100K—are increasingly trusting professional prep services like TurboTax to bridge the tax law gaps, while firms grapple with balancing client retention, advisory services, and a growing virtual clientele in a fiercely competitive industry.

Industry Size and Revenue

The US tax preparation industry generated approximately $11.2 billion in revenue in 2022
The average fee for a basic federal tax return preparation in 2022 was approximately $273
Revenue from tax software sales made up roughly 40% of the total revenue in the tax preparation industry in 2022
An estimated $11 billion is lost annually in unpaid taxes due to errors and fraud, which tax preparers help mitigate
The global tax preparation industry is expected to grow at a compound annual growth rate (CAGR) of 4.5% from 2023 to 2030, reaching an estimated $25 billion
Small to mid-sized tax preparation firms account for roughly 70% of the market share in U.S. personal tax services
The industry experienced a 5% decline in revenue during 2020 due to the COVID-19 pandemic, with recovery beginning in 2021
Income from consulting and advisory services by tax pros increased by 18% in 2022, supplementing traditional preparation services
The market size for automated tax filing software was valued at $2.3 billion in 2022 and is expected to grow annually by 6.8%
The number of international tax consulting cases handled by U.S. firms increased by 12% in 2022, driven by globalization

Industry Size and Revenue Interpretation

With a staggering $11.2 billion in revenue and nearly half stemming from software, the U.S. tax preparation industry proves that while Uncle Sam's puzzles are profitable, skilled tax pros and savvy software are essential to prevent the $11 billion lost annually to errors and fraud—in other words, when it comes to taxes, it pays to play it smart, digital, and local.

Technological Innovations and Adoption

The average turnaround time for tax return processing by professionals decreased to 3 days in 2022, from 5 days in 2020
Tax preparation firms reported a 12% increase in client retention rates in 2022 after implementing new customer relationship management software
Around 45% of tax preparers report experiencing increased cybersecurity threats in 2022, prompting new data protection measures
The adoption of AI-powered tax software reduced processing errors by approximately 25% in 2022, improving accuracy
During the 2022 tax season, approximately 82% of returns were prepared electronically, up from 75% in 2020, illustrating increased digital adoption
In 2022, around 10% of tax preparers offered virtual consultation sessions exclusively, reflecting emerging service trends
Around 40% of tax professionals believe that blockchain technology will significantly impact tax preparation and compliance processes in the next decade
The average annual expenditure on tax software and tools per preparer is estimated at $2,500, indicating significant investment in technology
The use of data analytics by tax firms increased by 22% in 2022 to improve client insights and service customization
The number of mobile apps dedicated to tax preparation increased by 30% in 2022, offering on-the-go solutions to consumers
Investment in cybersecurity by tax firms increased by 35% from 2021 to 2023, reflecting the rising threat landscape
Nearly 70% of tax professionals believe that blockchain will play a crucial role in future tax record-keeping
Over 85% of tax preparers in 2022 reported using some form of automation in their workflow, from data entry to reporting
In 2023, 65% of solo tax preparers reported using cloud-based accounting and tax solutions, indicating digital transition
The adoption of artificial intelligence in tax preparation is expected to reduce operational costs by up to 20% by 2025, analysts predict

Technological Innovations and Adoption Interpretation

In a swiftly evolving tax landscape, professionals are trimming return times to three days with AI-driven accuracy, boosting client loyalty through smarter CRM tools, and fortifying cybersecurity defenses—all while digital, mobile, and blockchain innovations promise to redefine the future of tax preparation faster than ever.

Wage and Compensation Data

The median annual wage for tax preparers was $47,820 in May 2022
The industry’s compliance rate with IRS regulations is around 97%, indicating high adherence levels

Wage and Compensation Data Interpretation

With tax preparers earning a median of $47,820 in 2022 and adhering to IRS regulations at a remarkable 97%, the industry demonstrates that balancing fiscal diligence with professional expertise doesn't have to come at the expense of financial comfort.

Workforce and Employment Trends

There are over 600,000 tax preparers employed in the United States as of 2023
The number of paid tax preparers has grown by 4% annually over the past five years
In 2023, about 30% of tax preparers are employed by large firms or corporations
Tax preparers’ employment is projected to decline slightly by 1% from 2022 to 2032
The majority of tax preparers (approximately 75%) hold at least an associate’s degree
Small accounting firms constitute about 65% of all tax preparers in the US
Over 50% of tax preparers are women in the United States
The demand for bilingual tax preparers increased by 10% over the past two years, due to rising immigrant populations
The most common tax preparation certification is the IRS Annual Filing Season Program, held by about 65% of paid preparers
The average age of a tax preparer in 2023 is approximately 45 years old, indicating a relatively mature workforce
The average number of clients served per tax preparer in 2022 was around 150, up from 120 in 2020
Approximately 25% of tax preparers work independently as sole proprietors
The top three states with the highest number of tax preparers are California, Texas, and Florida
Nearly 50% of tax preparers have reported an increase in demand following recent tax law changes in 2023
A survey found that 72% of tax professionals believe that automation and AI will revolutionize the industry by 2030
The number of tax preparers with professional certifications doubled between 2019 and 2022, reflecting industry standards' growth
The average number of hours a full-time tax preparer works annually is approximately 1,800 hours, with variations depending on peak seasons
About 15% of tax professionals offer specialized services such as estate planning, audit defense, or international tax, reflecting diversification in the industry
As of 2023, only about 45% of tax preparers are members of professional organizations like NATP or NSA, indicating room for greater industry networking
35% of tax preparers reported higher operating costs in 2022, primarily due to increased cybersecurity and compliance expenses
The number of self-employed tax preparers is growing at a rate of approximately 6% per year, indicating increasing entrepreneurship within the industry
The percentage of tax preparers with a CPA or EA credential increased by 10% from 2019 to 2022, reflecting higher professionalism standards
The typical tax season is approximately four months long, with peak activity in March and April, but some preparers work year-round
Tax preparation industry employment is projected to decline by 1% due to automation and AI replacing some roles, but demand for highly skilled professionals will remain robust
The number of tax preparers offering virtual or hybrid services increased significantly during the COVID-19 pandemic and has remained stable
The average number of years tax preparers stay in the industry before changing careers is approximately 10 years, indicating a stable workforce

Workforce and Employment Trends Interpretation

Despite a steady 4% annual growth and increasing certifications, the U.S. tax preparation industry faces a future where automation and AI threaten routine roles, yet the resilient demand for specialized and bilingual professionals—most notably in California, Texas, and Florida—suggests that human expertise remains vital in navigating complex tax landscapes and culturally diverse client needs.