State of the Tax Industry

Something feels different, doesn't it?

You're doing the same work you've always done—assembling returns, filing forms, checking boxes—yet it feels harder to make a decent profit. Clients call with “quick questions” that turn into free advice. Your staff is stretched thin, talented candidates are scarce, and competitors are offering “advisory services” that sound like consulting firms. Meanwhile, you're receiving more inquiries about how to minimise taxes and plan ahead, not just how to file on time.

If you've noticed these things, you're not alone. The tax profession is undergoing a shift that can feel both exhilarating and unsettling. Understanding why this is happening can help you decide where to take your practice next.

A perfect storm: rising costs and shrinking supply

Inflation has pushed up office rent, software subscriptions, and salaries. Between 2021 and 2023, average fees for new tax-prep clients climbed 25% and fees for existing clients grew 22.7% [Source: schanelcpa.com]—but the extra revenue barely keeps pace with rising costs. At the same time, there are 340,000 fewer accountants in the U.S. than in 2019, first-time CPA exam candidates have dropped 33% since 2016, and roughly 75% of current accountants are nearing retirement. [Source: thehustle.co]. Smaller firms feel this shortage most: 38% of accounting executives say they need more people, and nearly 40% of firms under $10 million in revenue report having too few employees.

Compliance work isn't the growth engine it used to be

National averages for a basic Form 1040 hover around $238, and even complex individual returns rarely exceed $537. [Source: accountants.intuit.com]. Yes, fees have ticked up—NATP's 2023 survey shows a $35 increase for individual returns and an $85 increase for business returns. [Source: blog.natptax.com]—but these are incremental gains. In a world where clients expect more, simply charging higher prep fees isn't a sustainable strategy.

Advisory services are where the momentum lies

While compliance fees inch upward, advisory revenue is growing exponentially. In the 2024 CPA.com & AICPA PCPS Client Advisory Services (CAS) Benchmark Survey, 206 firms projected their CAS revenue would double over the next three years. [Source: journalofaccountancy.com]. In 2023 alone, CAS practices saw a 17% median revenue increase and expect 15% growth this year [Source: journalofaccountancy.com]. Median CAS revenue has risen 61% since 2022. [Source: journalofaccountancy.com], dwarfing the 9.1% growth in overall firm net client fees. [Source: journalofaccountancy.com].

Firms that commit to advisory reap tangible benefits:

• Higher recurring revenue: practices offering higher-level advisory services earn 30% more in monthly recurring revenue. [Source: journalofaccountancy.com]
• Better clients: firms with formal CAS plans make nearly $10k more in median annual client revenue. [Source: journalofaccountancy.com].
• Premium pricing: CAS net fees per professional jumped 29% year-over-year to $156,250 [Source: accountingtoday.com], and only 10% of CAS practices still bill hourly. [Source: journalofaccountancy.com].

Clients are leading the charge

This isn't just an internal shift. According to the 2025 State of the Tax Professionals Report, 75% of advisors say their clients strongly desire more tax and business advice beyond basic return preparation. [Source: tax.thomsonreuters.com]. With tax laws growing more complex and business conditions more uncertain, clients expect their tax professional to be a strategic partner, not just a compliance expert.

Where will you go from here?

The numbers make it clear: the profession is moving away from transaction-based services toward relationship-driven advisory. Rising prep fees and staffing shortages make it difficult to scale compliance work profitably. Meanwhile, advisory services offer faster growth, deeper client relationships, and higher margins.

That's why we built Tax Maverick—to help you navigate this shift. By automating document review, surfacing personalised tax strategies, guiding your pricing, and connecting you with a community of forward-thinking advisors, we empower you to deliver the proactive guidance clients crave.