What Has Driven the Growth of the Tax Preparation Services Market in Recent Years?
The tax preparation services market has seen considerable growth due to a variety of factors.
• In the past few years, there has been a strong increase in the size of the tax preparation services market. The market is projected to grow from $32.33 billion in 2024 to $34.06 billion in 2025, indicating a compound annual growth rate (CAGR) of 5.4%. The historical period growth is due to factors such as conventional tax filing procedures, intricate tax rules, alterations in tax legislation, the expansion of small businesses, as well as increased consumer awareness and education.
What Is the Forecasted Market Size and Growth Rate for The Tax Preparation Services Market Size?
The Tax Preparation Services market is expected to maintain its strong growth trajectory in upcoming years.
• The market size for tax preparation services is predicted to continue with its robust growth in the upcoming years, expanding to $43.82 billion in 2029 at a CAGR of 6.5%.
This projected growth over the forecast period can be largely accredited to enhancements in tax software, the rise of remote and virtual services, increased regulatory focus on digital reporting, economic shifts and stimulus plans, and individualized tax planning services. Key trends predicted to mark the forecast period are concentrated efforts on customer education, the proliferation of do-it-yourself tax software, the use of data analytics for gaining insights, mobile tax filing services, and prioritizing aspects of environmental, social, and governance (ESG).
What Factors Are Driving Growth In The Tax Preparation Services Market?
The anticipated expansion of the tax preparation services market is primarily driven by the increasing number of small and medium-sized enterprises (SMEs). These SMEs are privately-owned entities with a capital, workforce, and assets that do not exceed the set limit defined by national guidelines. They frequently deal with the goods and services tax. The pivotal role of SMEs in the economy is endorsed by governments who often provide incentives like favorable taxation policies and easier loan accessibility to ensure their survival, thereby escalating the growth of the tax preparation services market. As stated in a report by the US Small Business Administration in May 2022, the US is expected to be the hub for 31.7 million small businesses and 20,139 large businesses. Over the last twenty years, small businesses in the US have contributed to 10.5 million net new jobs, whereas large businesses have added around 5.6 million jobs. These figures are anticipated to see a surge in the future. Hence, the escalating number of SMEs serves as a key driver of growth for the tax preparation services market.
What Are The Main Segments Of The Global Tax Preparation Services Market?
The tax preparation services market covered in this report is segmented –
1) By Service: Tax Compilation Services, Tax Return Preparation Services, Other Services
2) By Deployment Mode: Cloud, On-Premises
3) By Application: Enterprise, Family, Personal, Other Applications
Subsegments:
1) By Tax Compilation Services: Compilation Of Financial Statements, Review And Preparation Of Tax Documents
2) By Tax Return Preparation Services: Individual Tax Return Preparation, Business Tax Return Preparation, E-Filing Services
3) By Other Services: Tax Planning And Advisory Services, Audit Support Services, Tax Resolution Services
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What Emerging Trends Are Influencing The Growth Of The Tax Preparation Services Market?
The rise of technology represents a prevailing trend in the tax preparation services market, with leading companies seeking to enhance their market standing through the invention of cutting-edge solutions. For example, April Tax Solutions Inc., a Canada-based company specializing in accounting and tax services, pioneered its Tax Platform technology in January 2023. This groundbreaking technology streamlines the filing procedure and incorporates tax preparation into more extensive financial health, tailored specifically for the American clientele. It supports Americans in assuming command of their taxes by leveraging the latest developments in natural language processing and human-aided AI. April's tailored engine delivers taxpayers a swift, seamless, and cost-effective tax experience, aimed at simplifying the tax process. It thus establishes a novel benchmark for tax solutions accessible to families with low income. April actively collaborates with banks and financial entities to eradicate the historic obstacles that have manifested between tax and financial planning, thereby turning tax dealings into a simpler affair.
Who Are the Key Players In The Tax Preparation Services Market?
Major companies operating in the tax preparation services market include:
• BDO Global
• Deloitte Consulting LLP
• Ernst & Young Global Limited
• H&R Block Inc.
• KPMG International Limited
• RSM US LLP
• Ryan LLC
• Jackson Hewitt Tax Service Inc.
• PricewaterhouseCoopers International Limited
• Crowe Global
• Intuit Inc.
• 415 Group
• Knight Dowl CPA
• CapActix Business Solutions Pvt. Ltd.
• Entigrity Solutions LLC
• Invensis Inc.
• Ramsey Solutions
• Liberty Tax Service
• FreeTaxUSA
• Robert Hall & Associates
• Commerce Clearing House
• Drake Software
• GoSystem Tax RS
• Thomson Reuters corporation
• TaxAct Holdings Inc.
• 1040.com
• TaxSlayer LLC
• E-file.com LLC
• On-Line Taxes Inc.
• ezTaxReturn.com
• PriorTax
What Is The Most Dominant Region In The Tax Preparation Services Market?
North America was the largest region in the tax preparation services market in 2024. North America is expected to be the fastest-growing region in the tax preparation services market report during the forecast period. The regions covered in the tax preparation services market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
