Tax preparers are planning double-digit increases in their fees, according to the National Association of Tax Professionals newly released 2023 Fee Study.
"Our study found an average cost for a new client in 2023 to be $218 versus $174 in 2021, an increase of just about 23%," said Tom O'Saben, director of tax content and government relations at NATP.
"Community size was also found to be a significant factor," he added. "For example, in areas of less than 10,000 people, fees in 2023 averaged $164 for a returning client versus $143 in 2021. This is roughly an increase of approximately 14%. In areas with 50,000 or more people, fees for returning clients increases 24% ($224 versus $180)."
O'Saben noted that, as a practitioner in the St. Louis metro area, the results reflected the trends in his community: "Our average fee was just below $200."
Other key findings of the biannual survey include:
- Pricing, regardless of method and geographic location, increased across the board.
- Mobile payments — such as Zelle or Venmo — are now accepted by 42% of tax professionals.
- Six percent of tax professionals' work went unbilled — most commonly tax strategies and IRS/state correspondence.
- Almost two-thirds (65%) of practitioners' gross revenue is earned during tax season, with another 12% coming during the extended tax season.
- Over a third (36%) of
O'Saben noted that practitioners' responses to the question, "Are you having less returns to prepare, and if so,what's the cause of it?" point to the aging of the tax profession.
"In many cases, it was because the practitioner says 'I'm either slowing down' or 'I'm into very, very complex returns and I don't have time to do as many returns as I used to,'" he said. "That seems to support what Congress already knows in that they're concerned that there aren't enough people coming into the profession, and they want to look to prevent barriers to entry into the profession."
"It is a graying industry, and Congress knows that," he suggested. "If people are in fact preparing less returns, that's by choice, not because there isn't business out there. Increased complexity is also a factor."
"Many firms likely kept their fees static during the pandemic," he added. "The increase of 2023 over 2021 likely reflects a multiyear response to flat fees and the impact of inflation staffing and other fixed office costs. Very few firms raise fees by that large a percentage annually."
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