Tax Filing in the Service Sector


Research BriefPDF

Executive Summary

  • Refunds are important income for workers: Service-sector workers at the large firms in our sample received a $1,000 refund, on average, which equates to 5% of annual income. The average parent worker received a refund worth 12% of annual income.
  • Workers pay high costs for tax filing: The median worker paid almost $100 to file taxes, which equates to 6 hours of work and 7% of their tax refund.
  • Tax filing services vary in cost: The average cost for in-person tax services ranged from $600 to $130. The average cost for online services ranged from $400 to $90.
  • Qualifying workers do not use free file services: 98% of non-married workers not working a second job should have qualified for free tax filing based on their income. However, only one in five workers used this service.