OUTLOOK & ANALYSIS

Tax Pros Take the Edge in E-Filings

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Refunds up 5+ percent.

By Beth Bellor
CPA Trendlines Research

The machine that is the Internal Revenue Service keeps clicking along. As of March 15, the IRS had received 71.6 million individual income tax returns, down 0.4 percent from the same period in 2023, and had processed 70.6 million, down 1.2 percent.

MORE: Tax Pros Handle 46.4% of E-filing | Tax Refunds, Tax Pro Market Share Trending Up | Refunds Up as Tax Pros Tackle 41.5% of E-filings | Tax Pros Handle 37.7% of E-filings | Tax Pros File 33% of Early Returns
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E-filings

Electronic filings totaled 69.5 million, down 0.3 percent.
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Firms Culling Clients as Staffing Woes Persist

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man in suit exiting office building

Others tap outsourcing, training clerical staff as solutions.

By CPA Trendlines Research

Early results from the CPA Trendlines 2024 Busy Season Barometer: Emerging Issues, Opportunities, and Trends are showing a painfully persistent problem with staff shortages, though it seems the hardship may have improved a bit since last year.

MORE: Revenue Up at 59% of Accounting Firms … and More Good News | Compensation’s Up, but Up Enough to Retain Staff? | Are Accountants Charging Too Little? | ChatGPT for the Reluctant Accountant | CPAs Needed to Help Small Biz Adopt AI | Revenue Growth Is Top Priority for Small Firms | Is the CPA Business Model the Clog in the Pipeline?
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This year, like last year, survey respondents are reporting staffing as the second most common concern. Last year, it was reported by 47 percent, almost tied with the main concern: late or unprepared clients.

This year, uncooperative clients still rank first, at 50 percent, but staffing concerns have dropped to 37 percent.
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Tax Pros Gain Ground, and DIYers Maintain Lead

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Refunds are up over 4 percent.

By Beth Bellor
CPA Trendlines Research

With about a month left in the 2024 tax season, the individual income tax returns keep pouring in, and the Internal Revenue Service keeps grinding them out.

The IRS had received 62.8 million returns, down 1.1 percent from the previous year, as of March 8, the latest data available. It had processed 61.9 million returns, down 2.1 percent.

MORE: Tax Pros Handle 46.4% of E-filing | Tax Refunds, Tax Pro Market Share Trending Up | Refunds Up as Tax Pros Tackle 41.5% of E-filings | Tax Pros Handle 37.7% of E-filings | Tax Pros File 33% of Early Returns
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E-filings

Electronic filings totaled 61.2 million, down 0.9 percent.
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Revenue Up at 59% of Accounting Firms … and More Good News

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financial graph on blackboard

Technology is key for competitive advantage.

By CPA Trendlines Research

The 2024 Accounting Industry Report from Wolters Kluwer cuts through a lot of the underbrush of sentiments and anecdotal evidence about the state of the accounting business today. Backed by statistical data, the report presents a some significant truths about the state of the industry.

MORE: Compensation’s Up, but Up Enough to Retain Staff? | Are Accountants Charging Too Little? | Revenue Growth Is Top Priority for Small Firms | Is the CPA Business Model the Clog in the Pipeline? | Accountants Cozy Up to Clients with CAS | SURVEY: CPAs Culling Clients for Better Work-Life Balance | Women-Owned Businesses Upbeat but Need Help | Accountants to the Rescue as Startups Struggle | Looking for Recent Grads? Good Luck | What the Corporate Transparency Act Means for Accountants | Understanding the Full Cost of a Data Breach | Why the U.S. Must Act Now to Protect Our Online Privacy
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And the general state is good. Most firms are growing, profitability is up, new services are surging, and serious practices are making efforts to improve the quality of client experience.

Here are some of the most notable facts.
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Compensation’s Up, but Up Enough to Retain Staff?

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young woman seated at laptop counting money

People are leaving the profession. More money is one solution.

By CPA Trendlines Research

The AICPA’s 2023 National Management of an Accounting Practice (MAP) Survey came up with an odd statistic. Kind of hard to believe until you get the context.

The finding: the median employee turnover rate across all CPA firms is … 0 percent.

Yes, that’s a zero.

MORE: Are Accountants Charging Too Little? | ChatGPT for the Reluctant Accountant | Survey Shows Challenges, Priorities Shifting | Can Big Data Spot Financial Fraud? | Accountants Torn Over 2024 Economy, Offer Advice | SURVEY: Are You Offering the Right Services? | SURVEY: 42% of Accountants Turn Away Work Over Staff Shortages | Talent Gap Widening: Be Very Scared | CPA Biz Is Booming, But for How Long? | The 7 Categories of Cybersecurity Solutions Firms Need
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But wait. A median, as they say, is only half the story.

The bigger story – the broader context – is that more than half the responding practices had zero turnover, so the median fell at zero percent. But that goose egg doesn’t reflect the reality of firms at the other side of the spectrum.
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Tax Practitioners Say Happy Days Are Here … Again

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Seventy percent report as good or better year than last year.

 

For most, anyway.

By CPA Trendlines Research

The first results of the 2024 Busy Season Barometer: Emerging Issues, Opportunities, and Trends are in, and so far, halfway into the tax season, accountants and tax practitioners are reporting another pretty good year.

That’s two in a row!

MORE: The IRS Is Coming! Get Your Clients into Compliance | End Tax Season Meetings with Clients … Seriously | Brandon Hall: Firms Try to Make Too Much on Tax Prep | Eight Steps to Getting Started with AI: A Guide for Tax Professionals | The Nightmare of Non-credentialed Tax Preparers | Tax Pros Are Expanding and Earning More
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Last year, 58 percent of survey respondents said their year was much better or somewhat better than 2022, which, as you may recall, had been a rather rotten year.

So when only 32 percent of this year’s contributors say this season is better than 2023, it doesn’t mean fewer are having a good year. It means almost a third are reporting a year better than a good year.
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Tax & Accounting Profession Keeps Growing

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Overall profession employment

 

More workers, with some making quite a bit more money.

By Beth Bellor
CPA Trendlines Research

Winter doldrums didn’t seem to affect the tax and accounting profession, which saw several sectors hit new hiring highs in February.

Elsewhere in the nation, total nonfarm payroll employment increased by 275,000 in February, nudging the unemployment rate up to 3.9 percent. Professional and business services saw little change for the month.

MORE: Accounting Hiring Hits Another High | Staff Wages Hit Record High | Despite Staffing Crunch, Firms Freeze Pay Raises | Tax & Accounting Firms Grow for 9th Straight Month | Tax & Accounting Profession Grows, but Wages Don’t | Tax and Accounting Pay Advancing at 5.9% Pace | Accounting Jobs Up 4% for Year
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Overall accounting profession employment at a record 1,163,600 was up 1,000 or 0.1 percent for the month and 29,600 or 2.6 percent for the year. Employees averaged 35.9 hours per week, down 6 minutes or 0.3 percent for the month but up 6 minutes or 0.3 percent for the year. Their earnings hit a new high of $41.41, up 21 cents or 0.5 percent for the month and 34 cents or 0.8 percent for the year.
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