The accounting profession is in a prolonged bear market.
In recent years, over 300,000 accountants have left their jobs—thanks to retiring Baby Boomers and middle-aged professionals burning out—and not enough young professionals are stepping up to fill the gaps. With tax season right around the corner, this has left the remaining accountants worried about keeping up with demand.
If you’re one of the millions of Americans who work with a certified public accountant (CPA) to file your tax returns, you may want to make sure you make an appointment sooner rather than later. Finding help this season could be harder than ever, and Rebecca Hann, professor of accounting at the University of Maryland, says professionals’ accuracy and timeliness may be a concern.
“When you have a shortage on your staff, you're more prone to make mistakes,” Hann says. “Whoever is left there is going to have to pick up the slack, and then there's basically stress in the system.”
While the shortage may not be a recent development, the impact on your 2024 tax filing is a hot issue—whether it comes to accountant availability, mistakes on your filing, or the efficiency of the IRS as a whole.
How the accounting shortage could affect your tax filing
Today, more accountants are retiring and leaving the profession than new accountants are replacing them, leading to many tax pros turning away work. This spells bad news for individual tax filers and small business owners searching for help.
View this interactive chart on Fortune.com
“If you today, try to call 10 CPA offices and just say, ‘Hey, I'm a new bakery. Can you take me on? I'm happy to pay your fees.’ Most of them will tell you they can't help you,” says Jamil Khan, chief small business officer for H&R Block, including Block Advisors.
While Khan says H&R Block is well-staffed for this tax season, that’s not the reality everywhere—including the federal government. The Internal Revenue Service (IRS) is short hundreds of tax professionals, according to federal government job postings. However, one of President Donald Trump’s first executive orders of his new administration initiated a hiring freeze across the federal government.
The pause at the IRS will remain in effect indefinitely until the Secretary of Treasury works in part with Elon Musk’s Department of Government Efficiency (DOGE) to deem it “in the national interest to lift the freeze.”
An understaffed IRS could add more delays to the already complicated and bogged-down tax filing system. The agency says most individual refunds are processed within 21 days when filed online, but they can take up to four weeks or more for those with amended returns, those submitted by mail, or those requiring correction or extra review.
Fewer accountants means more errors on filings
During peak season, an accountant can easily go from working 40 hours a week to 80 hours a week or more in order to keep up with the demand. While some may thrive in an environment filled with opportunities, there’s no question that working long hours increases the likelihood of making mistakes —and even a small hiccup can have a seismic impact.
Hann’s recent research found that even with an about three-week increase in the time it takes to fill an accounting role at companies, there is an 8%–10% increased likelihood of internal control weaknesses.
Some companies are already seeing the effects in their annual and quarterly U.S. Securities and Exchange Commission (SEC) filings. For example, Lyft’s stock price rose by 67% after its earnings report said the company’s margins were expected to expand by 500 basis points instead of the correct number: 50.
Hundreds of other companies—from Planet Fitness to Rivian Automative—have had accounting shortages affect the accuracy of its documents required by law. In South Carolina, an accounting error also caused a stir after $1.8 billion in taxpayer dollars went missing.
However, for families, an accounting error is more than a headline: it could have drastic impacts in the form of hefty penalties from the IRS. As Hann points out, once you get flagged by the IRS, you’re more likely to get audited in the future. Luckily, there are some ways and best practices to avoid falling victim to a field with worker shortages.
How you can avoid being impacted by the accountant shortage
Despite the shortage, millions of Americans will be able to successfully work with an accountant and get their filing in on time. To help your tax filing game, there are some best practices to follow to ensure your federally mandated-tax documents are accurate and filed on time.
Get better at record-keeping
While many Americans only worry about their taxes in the spring, staying on top of your financial paperwork year round can reduce stress when it comes to tax season.
Having a dedicated folder at home or on your computer with previous and incoming tax documents can help provide peace of mind and avoid a frustrating scavenger hunt later. Being organized is especially important for business owners who may have to keep up with stacks of accounting documents.
Finally, consider putting your most important documents in a financial “go bag” in the event of an emergency.
Don’t wait until the last minute
Tens of millions of Americans wait until just days before Tax Day—April 15—to file their taxes. While this may not be an issue for those with more basic tax situations, those who need to work with a tax professional may be out of luck. You can avoid having to do your own research or risking an IRS penalty by planning months ahead.
Build a relationship with your accountant
If you manage to secure time with an accountant and you expect to need their services in years to come, be sure to cultivate a professional relationship to ensure your ability to work with them next year. This includes reaching out to them early and having an open, honest line of communication.
Take advantage of extensions
If you don’t manage to get your tax documents in proper shape by April 15, there’s good news. The IRS allows individuals to request a penalty-free extension to October 15 online, by mail, or through a tax professional. This does not apply to tax payment deadlines.
Learn more: Chime customers can file their taxes for free online
