Every year, millions of Americans struggle to pay their taxes. A significant percentage of those have no way to cover the cost. As a result, they seek out tax relief services to mitigate the financial and emotional burden of working with the IRS.
The tax relief industry has seen significant shifts over the last few years. The COVID-19 pandemic, economic instability, global conflict, and consumer spending habits have all played a role in the tax relief market’s evolution.
This article explores marketing forecasts and trends for tax relief businesses in 2023. Understanding projected trends allows industry leaders and business owners to position themselves to succeed. Read on to learn the factors affecting the tax relief market and what you can do to best serve your clients while growing your business.
The Growth of the Tax Relief Industry
The tax relief industry has seen steady growth over the last few years, and it seems that trajectory will continue. Recent research from Statista predicts a sharp jump in income tax revenue. Statista Research Department anticipates a nearly $600 billion increase from 2021 to 2022.
With such a significant increase in predicted revenue, the question remains: will taxpayers be able to pay their taxes?
For many individuals, tax season is a daunting time. This year is no different. Many families scramble every year to pay their state and federal taxes. Sometimes, the cost is impossible, and many don’t have the resources to pay what they owe.
When this happens, individuals must seek alternative means to address the situation. Hiring a tax relief firm is the most accessible option. As we approach the 2023 tax season, many people find themselves in a familiar situation: they don’t have the resources to file tax payments. Tax relief firms provide invaluable services that help their clients pay their taxes.
The tax relief industry delivers life-altering services that allow individuals to maintain dignity and financial stability. Below we explore the market drivers for this industry and how tax relief companies can prepare to best serve their clientele in 2023.
Market Drivers for the Tax Relief Industry
Household Debt Continues to Soar
Household debt has increased at its fastest rate in 15 years. Total debt jumped by 8.3 percent from last year, totaling a whopping $16.5 trillion. Rising interest rates, strong consumer demand, and increased credit card use contribute to this growing debt.
And as debt rates increase, so does the responsibility for individuals to pay off that debt. When it’s time to file taxes, many will struggle to pay what they owe the IRS on top of existing debts. Tax relief companies are uniquely positioned to alleviate these burdens.
When consumers are overwhelmed with debt, they need tax resolution services. And because tax resolution firms provide a simple, accessible way out, the industry is predicted to see even more growth as we enter 2023’s tax season.
Universally high costs throughout the year become especially burdensome during tax season. Many taxpayers struggle to make ends meet. As of September, 63 percent of Americans are living paycheck to paycheck. Consumers cannot keep up with the rate of inflation.
When it’s time for individuals to file their taxes, many will find that they don’t have the extra monthly income to cover the cost.
Tax relief businesses will likely see an uptick in service numbers this year, even among high-earning individuals. Of individuals earning six figures, 49 percent say they’re just getting by, dipping into cash reserves to cover monthly costs.
Taxpayers in all income brackets will require tax relief help in 2023. Agencies catering to clients across various income levels will see the most traffic, cultivating customer relationships that will likely last beyond this tax season.
Though the height of COVID-19 is behind us, many Americans are still reeling from the effects of the global pandemic. Last year an estimated 57 percent of Americans paid no federal income tax due to relief funds and tax credits.
This year will be a different story.
Federal aid has decreased, but many individuals are still recovering from the economic impact of the last two years. Finding a way to pay their taxes without the additional aid of stimulus checks, the Child Tax Credit, and other financial support leaves many individuals seeking the resources of tax relief firms.
Tax Relief Financing Options
The tax relief industry is preparing for a busy 2023. With many facing dire financial situations, consumers will need tax relief solutions to maintain good standing with the IRS.
But as we’ve discussed, the people requiring tax help don’t have the expendable income to cover agency fees. Tax relief financing empowers individuals to seek out and afford the tax help they need, and it allows tax relief firms to provide accessible, necessary support to their clients.
Partnering with a financing firm like United Consumer Financial Services makes financing simple for you and your customers. Tax relief financing from UCFS allows consumers to make scheduled, low monthly payments instead of paying for relief services in one lump sum. Consumers with little, poor, or no credit can benefit from your services through UCFS’s quick application and approval process.
Tax resolution agencies also benefit from offering consumer financing. You make services accessible to a broader range of customers, improve your cash flow, and increase sales.
Partner with UCFS to Capitalize on a Growing Tax Relief Market
All market forecasts point to an increased need for tax relief services. By partnering with UCFS to provide financing options for the service part of a customer’s tax resolution, you mitigate the stress associated with tax resolution while taking advantage of a growing market.
Reach out to the team at UCFS today to learn how our financing solutions empower you to win your market in 2023 and beyond.