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Tax Preparation Software Developers in the US Industry Data and Analysis
Over the past decade, demand for tax preparation software has grown substantially due to the increasing shift toward online business and tax filing, as reflected by the growth in self-prepared tax returns. However, economic fluctuations, especially during COVID-19, have led to significant revenue volatility for providers. The pandemic initially caused an online tax filing surge—up more than 25.0% from 2019 to 2020—as people avoided in-person professionals. As the pandemic eased, self-prepared returns fell, slowing revenue growth. More recently, high interest rates from 2022 to 2024 pushed businesses and consumers to use tax software to cut costs, temporarily boosting revenue, but anticipated rate drops could slow this trend. Meanwhile, market share concentration has slightly decreased due to scandals and a rise in entry, intensifying competition and causing the top companies' combined share to slip. As a result, major players may pursue mergers and acquisitions to regain ground while smaller developers cater to niche markets, aiming for stability amid shifting economic conditions. Elevated internal competition also caused providers to compete more heavily on price, reducing profit. Overall, revenue for tax preparation software developers has surged at a CAGR of 4.4% over the past five years, reaching $5.1 billion in 2025. This includes a 1.5% rise in revenue in that year.
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What's included in this industry analysis
IBISWorld's research coverage on the Tax Preparation Software Developers industry in the United States includes market sizing, forecasting, data and analysis from 2015-2030. The most recent publication was released April 2025.
About this industry
What's this industry report about?
The Tax Preparation Software Developers industry in the United States operates under the NAICS industry code OD4549. This industry provides software, usually hosted online, that enables individuals to file federal and state tax returns. The software is designed to guide users through their tax returns step-by-step. Additionally, companies in the industry provide software for small businesses. Related terms covered in the Tax Preparation Software Developers industry in the United States include free file alliance, e-filing, tax deduction, internal revenue service and software as a service (saas).
What's included in this industry?
Products and services covered in Tax Preparation Software Developers industry in the United States include Online tax software, Desktop tax software and Mobile tax software.
What companies are included in this industry?
Companies covered in the Tax Preparation Software Developers industry in the United States include Intuit Inc. and H&R Block, Inc.
Performance
What's included in the Performance chapter?
The Performance chapter covers detailed analysis, datasets, detailed current performance, sources of volatility and an outlook with forecasts for the Tax Preparation Software Developers industry in the United States.
Questions answered in this chapter include what's driving current industry performance, what influences industry volatility, how do successful businesses overcome volatility, what's driving the industry outlook. This analysis is supported with data and statistics on industry revenues, costs, profits, businesses and employees.
Products & Markets
What's included in the Products and Markets chapter?
The Products and Markets chapter covers detailed products and service segmentation and analysis of major markets for the for the Tax Preparation Software Developers industry in the United States.
Questions answered in this chapter include how are the industry's products and services performing, what are innovations in industry products and services, what products or services do successful businesses offer and what's influencing demand from the industry's markets. This includes data and statistics on industry revenues by product and service segmentation and major markets.
Geographic Breakdown
What's included in the Geographic Breakdown chapter?
The Geographic Breakdown chapter covers detailed analysis and datasets on regional performance of the Tax Preparation Software Developers industry in the United States.
Questions answered in this chapter include where are industry businesses located and how do businesses use location to their advantage. This includes data and statistics on industry revenues by location.
Competitive Forces
What's included in the Competitive Forces chapter?
The Competitive Forces chapter covers the concentration, barriers to entry and supplier and buyer profiles in the Tax Preparation Software Developers industry in the United States. This includes data and statistics on industry market share concentration, barriers to entry, substitute products and buyer & supplier power.
Questions answered in this chapter include what impacts the industry's market share concentration, how do successful businesses handle concentration, what challenges do potential industry entrants face, how can potential entrants overcome barriers to entry, what are substitutes for industry services, how do successful businesses compete with substitutes and what power do buyers and suppliers have over the industry and how do successful businesses manage buyer & supplier power.
Companies
What's included in the Companies chapter?
The Companies chapter covers Key Takeaways, Market Share and Companies in the Tax Preparation Software Developers industry in the United States. This includes data and analysis on companies operating in the industry that hold a market share greater than 5%.
Questions answered in this chapter include what companies have a meaningful market share and how each company is performing.
External Environment
What's included in the External Environment chapter?
The External Environment chapter covers Key Takeaways, External Drivers, Regulation & Policy and Assistance in the Tax Preparation Software Developers industry in the United States. This includes data and statistics on factors impacting industry revenue such as economic indicators, regulation, policy and assistance programs.
Questions answered in this chapter include what demographic and macroeconomic factors impact the industry, what regulations impact the industry, what assistance is available to this industry.
Financial Benchmarks
What's included in the Financial Benchmarks chapter?
The Financial Benchmarks chapter covers Key Takeaways, Cost Structure, Financial Ratios, Valuation Multiples and Key Ratios in the Tax Preparation Software Developers industry in the United States. This includes financial data and statistics on industry performance including key cost inputs, profitability, key financial ratios and enterprise value multiples.
Questions answered in this chapter include what trends impact industry costs and how financial ratios have changed overtime.
Industry Data
What's included in the Industry Data chapter?
The Industry Data chapter includes 10 years of historical data with 5 years of forecast data covering statistics like revenue, industry value add, establishments, enterprises, employment and wages in the Tax Preparation Software Developers industry in the United States.
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Frequently Asked Questions
What is the market size of the Tax Preparation Software Developers industry in the United States in 2026?
The market size of the Tax Preparation Software Developers industry in the United States is $5.1bn in 2026.
How many businesses are there in the Tax Preparation Software Developers industry in the United States in 2025?
There are 156 businesses in the Tax Preparation Software Developers industry in the United States, which has grown at a CAGR of 7.6 % between 2020 and 2025.
How may import tariffs affect the Tax Preparation Software Developers industry in the United States?
The Tax Preparation Software Developers industry in the United States is unlikely to be materially impacted by import tariffs with imports accounting for a low share of industry revenue.
How may export tariffs affect the Tax Preparation Software Developers industry in the United States?
The Tax Preparation Software Developers industry in the United States is unlikely to be materially impacted by export tariffs with exports accounting for a low share of industry revenue.
Has the Tax Preparation Software Developers industry in the United States grown or declined over the past 5 years?
The market size of the Tax Preparation Software Developers industry in the United States has been growing at a CAGR of 4.4 % between 2020 and 2025.
What is the forecast growth of the Tax Preparation Software Developers industry in the United States over the next 5 years?
Over the next five years, the Tax Preparation Software Developers industry in the United States is expected to grow.
What are the biggest companies in the Tax Preparation Software Developers industry in the United States?
The biggest companies operating in the Tax Preparation Software Developers industry in the United States are Intuit Inc. and H&R Block, Inc.
What does the Tax Preparation Software Developers industry in the United States include?
Online Tax Software and Desktop Tax Software are part of the Tax Preparation Software Developers industry in the United States.
Which companies have the highest market share in the Tax Preparation Software Developers industry in the United States?
The company holding the most market share in the Tax Preparation Software Developers industry in the United States is Intuit Inc..
How competitive is the Tax Preparation Software Developers industry in the United States?
The level of competition is moderate and increasing in the Tax Preparation Software Developers industry in the United States.
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