By Tim Frye
They say that two things are a sure thing in life, and those are death and well, you know the other. And because taxes are that part of life that is inevitable unavoidable income tax preparers have maintained several decades of job security. There have been changes within the demographics of the industry along with the clientele’s shift in strategy. There are more options than ever when it come to filing your taxes, and tax preparers have been pushed into developing wider arrays of products just to keep up. Let’s take a look at the ever-changing state of the tax preparation game and where it may go from here.
How is the Tax Preparation Market Place Evolving?
As of 2013 their were around 160 Million households that filed tax returns in the United States. Even with the recent changes tax law, people pretty much still have three modalities to select from when they are ready to file. They can go the CPA route or work with a tax preparation franchise like Pronto Income Tax to have their taxes filed. Those filers with complicated returns that utilize forms such as Schedule A, C and E will continue to use the higher echelon CPAs or experience EAs. The changing of the market place is really occuring at the lower end of the spectrum with the simple tax return filer having many more options in filing than ever before. Many are choosing to file them on their own, and 30% of those filers are using programs lke Turbotax and Quicken to accomplish that feat. Although the programs have been around for a considerable amount of time now they are becoming more prevelant as people become more stringent with their spending habits and also begin to recognize the options available.
Increasing Competition for Tax Preparers
The market for tax preparation has become thoroughly saturated with competition as companies such as TaxAct and TaxSlayer allow even low income preparers with great programs to prepare taxes for their clients. The peaks and valleys of the RAL system have also taken a bite out of the smaller preparers bottom line along the way. For those preparers who work for small companies that used to rely on return preparation fees as the bellcow for revenue, they have seen a sharp decline in income.
Technology has Changed Tax Preparation
As technology advances, in many cases the workers suffer as their jobs are taken over by much more efficient and productive computers. The same is becoming true for tax preparation. As the tax preparation process quickens with all of the information being more readily availabe and tranferable than ever, the tax preparers actual work to do thins out, leaving them with lower billing fees overall. Taxpayers and preparers alike can use programs like Quickbooks to transfer their relevant information directly to the tax return with the click of the mouse. This makes the tax preparers work easier, but does not necessarily equate to higher income for the preparer themselves.
As the tax preparation marketplace evolves exponentially, tax preparers are being forced to change their methods to keep pace with the joneses. Technology is altering the way we file our taxes, and in many cases the preparer is being etched out of the picture all together. But one thing remains, and that is the fact that the government will keep taxing, so the preparer who is learning more every day is going to be the last man standing in the end.
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