What is the estimated business cost for tax preparation in FY2026?

U.S. businesses are estimated to spend $131.8 billion in monetized time and out-of-pocket costs for tax preparation in fiscal year 2026.

How will legislative changes affect business tax filing time?

Technical and legislative changes are expected to cut the time companies spend on tax filings by 8.3% to 857 million hours.

What is the Treasury Department's role in tax burden estimates?

The Treasury Department releases annual estimates on the taxpayer compliance burden, including projected costs and time spent by businesses on tax filings.

Home / Business and Economy / Tax Prep Costs Soar: Businesses Face Hefty 2026 Bill

Tax Prep Costs Soar: Businesses Face Hefty 2026 Bill

19 Dec, 2025

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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.

Tax Prep Costs Soar: Businesses Face Hefty 2026 Bill

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.