Tax Preparation Services Global Market Report 2024

The tax preparation services market size has grown steadily in recent years. It will grow from $31.12 billion in 2023 to $32.62 billion in 2024 at a compound annual growth rate (CAGR) of 4.8%. The growth observed in the historical period can be attributed to several factors, including the prevalence of traditional tax filing methods, intricate and evolving tax regulations, frequent changes in tax laws, the expansion of small businesses prompting increased tax filing needs, and a growing level of consumer awareness and education regarding taxation processes.

The tax preparation services market size is expected to see strong growth in the next few years. It will grow to $40.6 billion in 2028 at a compound annual growth rate (CAGR) of 5.6%. The anticipated growth in the forecast period can be attributed to various factors, including advancements in tax software technology, the prevalence of remote work and virtual service offerings in the tax preparation sector, regulatory emphasis on digital reporting requirements, economic changes and the implementation of stimulus programs impacting taxation, and the rise of personalized tax planning services tailored to individual needs. Key trends expected in this period encompass a heightened focus on customer education regarding tax matters, an expansion of do-it-yourself (DIY) tax software solutions, the utilization of data analytics for gaining insights and improving tax processes, the emergence of mobile tax filing services for increased convenience, and an increasing consideration of environmental, social, and governance (ESG) factors in tax-related practices.

The growth of small and medium-sized enterprises (SMEs) is anticipated to drive the expansion of the tax preparation services market in the coming years. SMEs, defined as privately owned businesses with capital, workforce, and assets below specified national thresholds, play a crucial role in the economy. These businesses often fulfill goods and services tax obligations, and governments recognize their significance by offering incentives, including favorable tax treatment and easier access to loans. Such measures are designed to support SMEs and contribute to their sustained operation. As of May 2022, a report from the US Small Business Administration reveals projections of 31.7 million small businesses and 20,139 large businesses in the US. Over the past two decades, small businesses in the US have added 10.5 million net new jobs, surpassing the 5.6 million jobs added by large businesses. The expected increase in the number of SMEs underscores their pivotal role, driving the growth of the tax preparation services market.

The increasing threat of security breaches is poised to fuel the expansion of the tax preparation services market. Security breaches involve unauthorized intrusions into computer systems, networks, or data repositories, compromising the confidentiality, integrity, or availability of sensitive information. Tax preparation services prioritize robust data security measures to protect sensitive financial information, comply with industry standards and regulations, address identity theft concerns, ensure secure document handling, possess expertise in fraud detection, implement backup and recovery plans, and establish secure communication channels. According to a December 2022 report from Cyber Security Hub, a community of cyber and IT security professionals, approximately 4,100 publicly disclosed data breaches occurred, resulting in the compromise of almost 22 billion pieces of information. The escalating frequency of security breaches emphasizes the critical need for secure tax preparation services, thereby driving growth in the tax preparation services market.

Technological advancement emerges as a prominent trend gaining momentum in the tax preparation services market, with major companies actively pursuing innovative solutions to enhance their market positions. For example, in January 2023, April Tax Solutions Inc., a Canada-based accounting and tax service company, introduced its Tax Platform technology. This platform simplifies the filing process and integrates tax preparation into broader financial wellness, particularly for Americans. Leveraging recent advances in natural language processing and human-assisted AI, April's Tax Platform offers a personalized engine that ensures a fast, frictionless, and affordable tax experience. The technology sets a new standard for tax solutions, especially benefiting low-income families. April collaborates directly with banks and financial institutions to bridge the traditional gap between tax and financial planning, thereby facilitating a more straightforward tax process.

Major players in the tax preparation services market are directing their focus towards innovative products, including AI-powered tax question-answering services, to drive revenue growth. These services leverage artificial intelligence algorithms to provide accurate and timely answers to user inquiries related to tax-related matters. In March 2023, Taxaroo, a US-based tax technology company, launched ZeroTax.ai, an AI-powered tax question-answering service. Also known as TaxGPT, this service delivers free tax advice that users can optionally review with a tax expert. ZeroTax.ai aims to provide reliable responses to a variety of tax-related queries, covering topics such as credits, deductions, filing taxes, and more. The solution adds value to CPA firms and tax businesses by integrating seamlessly with Taxaroo's accounting practice management software. Additionally, ZeroTax.ai enables customers to request referrals to reliable tax experts within the network for assistance with tax preparation.

In November 2022, Cinven, a United Kingdom-based private equity firm, completed the acquisition of TaxAct Holdings Inc for a total transaction value of $720 million. This acquisition represents Cinven's strategic move to establish a more robust and integrated company capable of competing effectively in a lucrative market with substantial anticipated growth. Cinven aims to expedite the expansion of its service offerings within this market. TaxAct Holdings Inc, based in the United States, specializes in tax preparation software services, including e-filing services, as well as individual and business tax-related solutions.

Major companies operating in the tax preparation services market report are 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., H&R Block Tax Software, 1040.com, TaxSlayer LLC, E-file.com LLC, On-Line Taxes Inc., ezTaxReturn.com, PriorTax.

North America was the largest region in the tax preparation services market in 2023. 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. The countries covered in the tax preparation services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary tax preparation services comprise tax compilation services, tax return preparation services, and other related offerings. Tax compilation services involve the preparation of an entity's financial statements based on information provided by the management of the organization. These services can be accessed through deployment methods such as cloud-based or on-premises solutions, catering to diverse needs across enterprise, family, personal, and other applicable domains.

The tax preparation services market research report is one of a series of new reports that provides tax preparation services market statistics, including tax preparation services industry global market size, regional shares, competitors with a tax preparation services market share, detailed tax preparation services market segments, market trends, and opportunities, and any further data you may need to thrive in the tax preparation services industry. This tax preparation services market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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