inside tax season’s hidden shift: same work, fewer people, higher cost

and that’s the good news.

your mileage may vary: the tax and accounting workforce is churning out almost as many returns. but with rising labor costs. is that a margin squeeze or the firm of the future? (index = pro-filed tax returns, annualized payrolls, and headcounts)

by 卡塔尔世界杯常规比赛时间

as the tax and accounting profession enters the final stretch of busy season 2026, new 卡塔尔世界杯常规比赛时间 research suggests that the much vaunted promises of ai-enabled efficiencies are still just that – promises.

more tax season

so far this year, firms are producing even fewer tax returns than at the same time last year, while salaries are increasing. the problem gets worrisome when you notice that headcounts are flat to down. or, are these the signs of a new paradigm?

the combination of flat output per worker, rising labor costs, and declining employment usually spells margin squeeze. that is, unless firms can switch rapidly to higher-value, more complex work. in the best-case scenario, firms might be managing to produce with less while paying more for higher-level staff.

either way, it reflects a deeper shift that industry leaders, economists, and technology executives are now describing in similar terms. the work is not disappearing, but the way it gets done is changing.

34 million returns

according to the latest statistics from the irs, tax professionals have filed 34.1 million returns, down from 34.5 million at the same point in 2025, a decline of about 1.2 percent. over the same period, employment in accounting, tax preparation, bookkeeping and payroll services slipped to 1.125 million, down from about 1.16 million at its peak in early 2024, a decline of roughly 3 percent.

the two movements of lower output on top of lower employment should offset each other. but the result is that output per worker is barely changing. each worker is still handling roughly the same number of returns as last year.

even as productivity holds steady, which could be considered an achievement, the cost of producing each return is rising.

payroll data show the average weekly salary per worker is increasing across the industry. in cpa offices, payroll per worker is now about $1,800 a week. in tax preparation services, it’s about $800. across the combined workforce, the average weekly payroll per worker is about $1,250. to be sure, those are just averages. your mileage may vary.

calculating the cost per return

when the salary figures are measured against output, it’s clear that the cost per return is rising, not because workers are doing less, but because they are being paid more.

it means the system is not becoming less efficient in terms of output. labor is becoming more expensive.

industry leaders describe the same dynamic from inside firms. “ai is fundamentally reshaping the accounting profession,” says erik asgeirsson, president and ceo of cpa.com, adding that firms using ai-enabled tools are “creating new efficiencies.”

the data support asgeirsson—but only up to a point. efficiency gains are not translating into higher returns per worker. instead, they appear to be offsetting labor pressure.

the employment side of the equation is just as important. the accounting and tax services workforce grew steadily for decades, rising from about 650,000 workers in 1990 to more than 1.16 million in 2024, an increase of roughly 80 percent over three decades. but that growth has stopped.

employment plateaus beneath peaks

employment has flattened and begun to drift lower. subsector data show similar patterns. cpa office employment has held roughly steady, while tax preparation employment — typically seasonal — has plateaued below prior peaks.

and that plateau is occurring in a labor market that remains tight. industry reports show accounting unemployment rates of 1-2%. the number of accounting graduates declined to 55,152 in the 2023–2024 academic year, down 6.6 percent year over year, though new enrollments have recently shown a hopeful uptick.

so firms are responding in the only way they can: by paying more. the result is a system that is holding output constant with fewer people and higher pay.

that’s not how the industry traditionally operated. for years, more work meant more hiring. now, firms are trying to maintain output without expanding headcount. that shift is visible in both the data and the commentary from industry leaders.

ai redefines the accountant

elizabeth beastrom, president of tax, audit and accounting professionals at thomson reuters, describes the environment as a “perfect storm” of talent constraints, adding that ai can help firms “operate with fewer staff without sacrificing client service.”

mark koziel, president and ceo of the aicpa, frames the change in terms of work itself. “ai is not going to disrupt the accounting profession,” he says, “but it will change what an accountant does.”

that change is already evident in the workforce. one of the clearest changes is the shift away from entry-level labor. the cpa.com 2025 ai in accounting report notes that the “traditional accounting career ladder is undergoing rapid transformation,” with ai increasingly handling work that was once assigned to junior staff.

that has two direct effects: fewer entry-level workers and higher average pay per worker. it also helps explain how payroll can rise even when headcount falls.

at large firms, the shift is already explicit. jenn kosar, an ai assurance leader at pwc, says new hires will become “reviewers and supervisors” more quickly because ai is handling routine tasks.

it’s a structural change in how work is distributed, calling for less manual preparation and more oversight and review. and the data agree: higher payroll per worker, stable output per worker.

the cpa vs tax prep divide

within the industry, the divide between cpa firms and tax preparation services remains stark. cpa firms have produced about 85 returns per worker so far this year, while tax prep firms are pushing out returns at the rate of 300 per worker, and at a fraction of the cost. the difference, of course, reflects the complexity of the work, compensation levels, and workflow structure. tax prep services operate at scale, using standardized processes. cpa firms handle more complex engagements that require more time and higher-skilled labor. that gap has been stable for years, and the latest data show no sign of convergence.

nevertheless, despite widespread adoption of automation and ai, there is still no clear evidence in the data of a productivity surge. instead, technology appears to be stabilizing output. firms are using automation to maintain throughput, reduce reliance on entry-level staff, and manage labor shortages.

what they are not yet doing is producing more measurable returns per worker.

the tax and accounting profession is not an exception. the profession’s trajectory is echoed in broader economic research. the federal reserve bank of atlanta has found “positive labor productivity gains” from ai, especially in high-skill services, but also notes that these gains are uneven and often tied to task reallocation rather than overall output increases.

productivity gains predate ai

at the same time, federal reserve chair jerome powell cautions that new productivity gains in the broader economy are not primarily driven by ai but have been underway before generative ai became widespread. perhaps the accounting industry is ahead of the broader economy in showing these effects, not necessarily representative of it.

put all the pieces together, and a consistent picture emerges. returns are slightly down. employment is slightly down. wages are rising. output per worker is flat. cost per return is rising. but the system is holding together.

irs officials say the filing season is proceeding smoothly. the agency is reporting on-time processing and high levels of electronic filing, even as volumes fluctuate slightly year to year.

maybe that reinforces the theory that the system is not breaking, but adapting.

same work. fewer people. higher cost.

the simplest way to describe the change is this: the industry is doing the same work with fewer people, at a higher cost. that is not a collapse. it is not a boom. it is a shift.

firms are hiring less, paying more, relying more on technology, and using those changes to maintain output.

roman kepczyk of right networks describes it as “shuffling the deck” on how firms operate. rhonda clark of the association for accounting marketing says staffing remains the top concern even as firms work to upskill for ai.

accounting’s new operating model: not based on manpower

the problem, then, is not a lack of client-side demand. the question is how to meet that demand while the workforce is changing.

the accounting and tax profession is reaching a new operating point. it is no longer expanding its workforce to meet demand. instead, it is holding output steady, absorbing higher labor costs, and restructuring how work gets done. returns per worker are not rising. but they are not falling either.

that stability, combined with rising costs, is a signal. the work is still getting done.

it just costs more to do it. and fewer people to do it.

posted on april 5, 2026