Commenting on the National Association of Tax Professionals’ biannual study on trends within the tax industry, an executive from the organization believes the results from this year’s survey shows an aging workforce paired with potential barriers to entry for the next generation of practitioners.
NATP conducts a study every other year that analyzes tax professional fees charged for return preparation, bookkeeping, financial planning, and other services by surveying its members. A high-level snapshot of the 2023 Fee Study shows that the majority of tax pros are increasing their fees, either yearly (49%) or every two years (28%).
At least half of respondents in each of the individual, business, and fiduciary categories reported that they use a price model calculated based on a minimum fee plus cost based on a return’s complexity. For individual returns, 35% set fees for reach form and schedule, but that method is use less frequently for business returns (23%) and fiduciary returns (27%).
Overall, 70% of tax professionals’ gross revenue comes from return preparation, the next highest portion coming from monthly accounting and bookkeeping services (12%). All other categories come in at 5% or below. 65% of gross revenue is earned during tax season, 12% during extended periods, and the remaining 23% between tax seasons.
NATP Director of Tax Content and Government Relations Tom O’Saben commented in a video posted by the organization on its Youtube channel that a particularly illuminating finding of the study came from responses to the question regarding if professionals find themselves preparing less returns, and if so, why?
According to O’Saben, many respondents said they are “slowing down” in their career or are instead focusing on “very, very complex” returns that take up time that would otherwise be used to prepare a higher quantity of simpler returns. This reinforces “what Congress already knows” and “are concerned about.” That is, the tax community is preparing less returns by choice, “not because there isn’t business out there.”
O’Saben concluded that tax is becoming a “graying industry,” and that the study adds to the narrative that “there aren’t enough people coming into” the tax world, indicating there are too many barriers to entry preventing younger talent from getting a foot in the door.
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