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Tax Prep Costs Soar: Businesses Face Hefty 2026 Bill
19 Dec, 2025
Summary
- US businesses to spend $131.8 billion on tax prep in FY2026.
- Compliance time burden expected to decrease by 8.3% to 857 million hours.
- Out-of-pocket expenses for tax compliance to jump 10.6% to $79.2 billion.
U.S. businesses are anticipating a significant rise in tax preparation costs, with an estimated expenditure of $131.8 billion for fiscal year 2026. This represents a 3.2% increase compared to the preceding fiscal year. The Treasury Department's estimates, released recently, indicate that despite expected time savings due to legislative changes, out-of-pocket expenses will climb substantially.
Technical and legislative updates are projected to reduce the hours companies dedicate to tax filings by 8.3%, bringing the total to 857 million hours. However, the financial impact of this compliance burden is expected to grow. Out-of-pocket costs, encompassing software purchases, third-party preparer fees, and mailing expenses, are forecast to escalate by 10.6% to $79.2 billion.
These projections emerge as the IRS grapples with challenges that have raised concerns among businesses regarding their ability to manage the upcoming tax season smoothly. The Treasury Department plans to submit its final estimate for review, with public comments due by January 14, 2026.
