Busy Season Barometer

Tax Season Faceplant: Accountants Overrun by Late Chaos

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Businesswoman with headache at laptop

 

Technology and the economy threw some wrenches into the mix.

By CPA Trendlines Research

This year’s tax season seems to have been pretty good, according to the latest from the CPA Trendlines Busy Season Barometer, though not quite as good as expected.

Survey respondents went into the season with cautiously optimistic expectations. The percentage who felt that this year they were better prepared for the three-month grind remains constant at about 46 percent, comparing December/January with early April.

MORE Barometer: Accountants Turn Negative Amid Tariffs, Trade, Uncertainty | What CPA Firms Could Do Better | SURVEY: Which Client Industries Will Grow This Year | Tax Preparers Share Advice for Your Clients | Staffing, Tech, Prices Top Tax Pros’ Concerns | Tax Pros Gear Up for a Better Busy Season | Tax Season 2025 Begins. Ready or Not.
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But many who figured they were as prepared this year as ever were apparently in for a sad surprise. Before the season, 41 percent said they were prepared as well as in 2024, but that number plummeted to 25 percent by April. The shift is toward the “worse” end of the scale, with the “much worse” response doubling from 3 percent to 6 percent, and “somewhat worse” nearly doubling from 11 percent to almost 20 percent.
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Accountants Turn Negative Amid Tariffs, Trade, Uncertainty

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man holding umbrella while standing in stormy ocean

Survey respondents aren’t shy about placing blame.

Launch survey here

By CPA Trendlines Research

If you’re getting a little nervous about the general business environment, you’re not alone.

The 2025 CPA Trendlines Busy Season Barometer has picked up a serious swing toward pessimism among the professionals who know the numbers.

MORE Barometer: What CPA Firms Could Do Better | SURVEY: Which Client Industries Will Grow This Year | Tax Preparers Share Advice for Your Clients | Staffing, Tech, Prices Top Tax Pros’ Concerns | Tax Pros Gear Up for a Better Busy Season | Tax Season 2025 Begins. Ready or Not. | MORE Surveys & Research
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Before the inauguration, the outlook for the nation’s economy was moderately hunky-dory. Almost 60 percent of respondents predicted the economy would get better over the next 12-18 months. Only 26 percent figured it would get worse.

Pessimism Doubles

That was then. This is now. By the Ides of March, 68 percent saw an economic downturn, and only 21 percent were optimistic. Now, by the second week of April, 74 percent are hunkering in the pessimist camp. In fact, the share of those who fear things will get “much worse” has doubled from 14.5 to 29 percent.

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Raise Your Rates to Change Your Clientele

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portrait of Loren Fogelman
Fogelman
 Loren Fogelman, founder of Business Success Solution, is an expert in pricing strategy and sales for accounting firms. A sought-after keynote speaker, she is continually listed among America’s top-ranked business coaches.

The fees you charge make a statement about your firm.

By Loren Fogelman
The Holistic Guide to Wealth Management

Setting your fees appropriately is one of the primary challenges that accounting professionals face. According to McKinsey, 80 to 90 percent of services are priced too low. Throughout my career, I too have found that most firm owners don’t know how much to charge for their services – and too often they undercharge.

MORE: Pursue Excellence to Win the Battle for Talent | Leverage AI to Grow and Protect Revenue: Six Steps | How WealthTech Is Reshaping the Future of Holistic Advice | Seven Tech Keys to a Holistic Service Model | Four Ways to Provide Wealth Management in Your Accounting Practice | Profile of a Modern Firm: Putting the Vision into Practice | Toward a 21st-Century CPA: A Dynamic Vision | What Multiples Mean to Accounting Firms
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Many firm owners tell me that setting fees can feel like tiptoeing through a pricing minefield. And pricing shouldn’t be taken lightly. This is especially true for wealth management services. The prices you set today will impact your firm’s profit margin as well as your growth for years to come.
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What CPA Firms Could Do Better

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Businessman looking thoughtful

Survey respondents have specific suggestions.

By CPA Trendlines Research

People at CPA firms generally think their practice is pretty effective at meeting its objectives with consistency over time.

But only 5 percent think their firm’s doing a great job. And about that many think their firm’s doing a somewhat lousy job.

MORE Barometer: SURVEY: Which Client Industries Will Grow This Year | Tax Preparers Share Advice for Your Clients | Staffing, Tech, Prices Top Tax Pros’ Concerns | Tax Pros Gear Up for a Better Busy Season | Tax Season 2025 Begins. Ready or Not.
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The 2025 Busy Season Barometer is finding that on a scale of 1 to 10, 45 percent of respondents would rate their firm at an 8 or better, and another 25 percent give their firm a so-so 7.
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Tax Preparers Share Advice for Your Clients

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Man and woman at table in client meeting

Help them prepare for what’s to come.

Join the Busy Season Barometer. Get the results.

By CPA Trendlines Research

Accountants sound worried. When the 2025 Busy Season Barometer survey asked if anyone had advice on how small businesses should prepare for the next 12-18 months, almost half took the time to respond.

MORE Barometer: Staffing, Tech, Prices Top Tax Pros’ Concerns | Tax Pros Gear Up for a Better Busy Season
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Here’s a list of some of the more meaningful responses. Which would apply to your clients? Which should you share with them?

___ Figure out which labor-intensive functions they can automate ASAP. (Andrew Schwartz)

___ Take advantage of near-term opportunities with post-Tax Cuts and Jobs Act legislation (as they become clearer) and provide services/planning for more probable changes in taxes/economy for 3-5 year, 5-10 year and 10 year+ timeframes. (Anthony Aleta) READ MORE →

Staffing, Tech, Prices Top Tax Pros’ Concerns

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bar chart

 

Small businesses are advised to prepare for change.

Join the Busy Season Barometer. Get the results

By CPA Trendlines Research

If you think we’re in for a year of stability and calm, you haven’t been paying attention.

Whether you think the nation and the world are moving in the right direction or the wrong, one thing we can all agree on is: we’re in for some change.Join the survey

MORE: More Than 1 Million ERC Claims Still Not Processed | Art Werner: The Godfather and Tax Issues | Quick Tax Tip | Advanced Tax Preparers Need Managing, Too | The Top Ten Problems the IRS Still Needs to Fix | Tax Pros Gear Up for a Better Busy Season | IRS Processing Up; Payouts Down | Help Tax Clients Help You | Art Werner: Beneficial Ownership and Control | Four Challenges of Managing New Tax Preparers | IRS Funding Pays Eye-Popping 415x ROI | Tax Season 2025 Begins. Ready or Not. | Every Tax Reviewer Should Be Able to Answer These Ten Questions
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If you need details on that, consider yourself lucky. Return to your cave and go back to sleep.

On the other hand, if you’re an accountant, you need to stay awake, monitor the political-economic-financial situation and keep your clients advised. They need you now more than ever.
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Tax Pros See Better Year for Those Close to Home

By

Young man facing image of himself

Nationally … they’re not so sure.

By CPA Trendlines Research

CPAs, Enrolled Agents and other tax practitioners are always on the front line of the economy. With offices in tens of thousands of locations across the country, they know who’s making money and who’s struggling.

According to early results from the 2025 Busy Season Barometer, accountants have completely reversed their 2024 predictions for the economy.

MORE: Art Werner: The Godfather and Tax Issues | Quick Tax Tip | Advanced Tax Preparers Need Managing, Too | The Top Ten Problems the IRS Still Needs to Fix | Tax Pros Gear Up for a Better Busy Season | IRS Processing Up; Payouts Down | Help Tax Clients Help You | Art Werner: Beneficial Ownership and Control | Four Challenges of Managing New Tax Preparers | IRS Funding Pays Eye-Popping 415x ROI | Tax Season 2025 Begins. Ready or Not. | Every Tax Reviewer Should Be Able to Answer These Ten Questions | Taxpayer Advocate Sees Big Improvements at IRS | Ask Tax Clients the Right Questions | Major Changes to Circular 230: Implications for Tax Professionals | Cornerstone Report
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A Mirror Image

What a difference a year can make. Look how the numbers have switched places, almost as if in a mirror image.
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Five Ways to Fill the Staffing Gap

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bar chart

It takes more than moolah.

By CPA Trendlines Research

The 2025 CPA Trendlines Busy Barometer is finding that the talent shortage is one of the accounting industry’s primary concerns, and the Wolters Kluwer Future Ready Accountant Report confirms that the shortage of accounting professionals is expected to be a top issue over the next five years.

MORE: Show Us the Money! Accountants Are Making More | Twelve Years and Out: Seasoned Accountants Join the Exodus | How Accounting Firms Are Handling the Staff Shortage
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The shortage is global, the Wolters Kluwer report says. Around the world, 35 to 40 percent of firms identify recruitment and retention as their biggest challenge.
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Tax Pros Gear Up for a Better Busy Season

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Survey respondents say the new year means new plans.

By CPA Trendlines Research

It’s shaping up to be a pretty good year, according to early results from the 2025 Busy Season Barometer. Half expect a year better than last year’s good year, and less than 10 percent think it will be worse.

MORE: IRS Funding Pays Eye-Popping 415x ROI | Tax Season 2025 Begins. Ready or Not. | Every Tax Reviewer Should Be Able to Answer These Ten Questions | Art Werner: Corporate Transparency Act and FinCEN Reporting | Quick Tax Tip | Taxpayer Advocate Sees Big Improvements at IRS | Ask Tax Clients the Right Questions | Major Changes to Circular 230: Implications for Tax Professionals | Cornerstone Report
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Why?

  • The market’s in a good place. Plenty of clients out there.
  • So far (fingers crossed) no big changes to the tax code.
  • No pandemic quarantines (more fingers crossed).
  • The economy’s chugging right along (keep them crossed).

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Tax Season 2025 Begins. Ready or Not.

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bar chart
Ready or not? More than four in ten accountants are expecting a better tax season this year than last year, with only one in six dreading worse. Join the survey. Get the results.

Most pros will hit the ground running.

By CPA Trendlines Research

Join the survey. Get the results.

Ready or not, here it comes: the marathon of the tax season. The W-2s are in the mail, the K-1s shouldn’t be far behind, and the 1099s are being filed.

MORE: Every Tax Reviewer Should Be Able to Answer These Ten Questions | Art Werner: Corporate Transparency Act and FinCEN Reporting | Quick Tax Tip | Taxpayer Advocate Sees Big Improvements at IRS | Ask Tax Clients the Right Questions | Major Changes to Circular 230: Implications for Tax Professionals
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So far, most of America’s CPAs and tax preparers are ready for the tax season and reasonably optimistic about this year’s revenues.

According to early results to the CPA Trendlines Busy Season Barometer, 44 percent of respondents are better prepared than they were last year, and almost as many are in about the same position as last year. Only 14 percent say they’re less ready than last year, with a mere 3 percent much less ready. Fifteen percent are “much better” prepared.

But that was before a Trump-ordered government-wide hiring freeze and new threats of over $20 billion in budget cuts.

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IRS Still Unsure How to Measure Audit Rate

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data table

Differing definitions are only part of the problem.

By CPA Trendlines Research

The Inflation Reduction Act endowed the IRS with almost $80 billion to improve customer service and beef up enforcement. Congress later reduced the amount to $57.8 billion, with $24 billion earmarked for enforcement.

In no time at all, there was misinformation bouncing around social media and conservative podcasts, claiming that the IRA would result in more audits of middle-class taxpayers.

MORE: Art Werner: Estate Planning Strategies | Quick Tax Tip | Art Werner: Post-Mortem Estate Planning | Quick Tax Tip | Pause to Praise the Tax Pro Volunteers | IRS vs. Fraudsters | Imagine! The National Tax Advocate Does | Art Werner: Maximizing Fringe Benefits | Is the IRS Mismeasuring Phone Service? | IRS Makes Big Progress But … | Business Booming, but Not as Much as Last Year | Busy Season Barometer Offers Clues for Better Business | Tax Practitioners Say Happy Days Are Here … Again | The IRS Is Coming! Get Your Clients into Compliance
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The enforcement resources had no such designation. To allay fears, in 2022 the secretary of the Treasury directed the IRS commissioner not to use any of the additional resources to increase the audit rate of small businesses or households earning below $400,000.
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