There’s no shame in admitting it – many of us need a bit of help with our taxes. Whether due to time restriction, numerical aversion or a simple lack of interest, we look upon mid-April with foreboding and then watch as procrastination inevitably makes way to a last-minute scramble.
Haste and disorganization are most likely the two primary reasons why roughly 2.3 million people made math errors on their tax returns in 2013, the most recent year for which IRS data is available. So rather than spend the 16 hours the IRS says it takes for an individual to fill out their 1040, nearly 6 in 10 taxpayers hire a professional to do their returns.
But much like tax rates themselves, the accessibility, affordability and effectiveness of tax help differs significantly from state to state. In order to determine where the relative sweet spots happen to be, WalletHub compared the 50 states as well as the District of Columbia in terms of six key metrics – ranging from the number of accountants per 1,000 people to their average workload and mean hourly compensation.
More information about the significance of these data points as well as a comprehensive state-by-state rankings breakdown can be found below.
Main Findings
|
Rank |
State |
Accountants Per 1,000 People (Rank) |
Accounting Job Openings Per 1,000 People (Rank) |
Affordability of Tax Help (Rank) |
Returns Filed Per Accountant (Rank) |
% of Filers Paying for Tax Help (Rank) |
|---|---|---|---|---|---|---|
| 1 | North Dakota | 5.05 (5) | 0.55 (21) | 132.82% (2) | 187 (13) | 61.91% (10) |
| 2 | Massachusetts | 5.31 (3) | 1.14 (50) | 137.62% (4) | 157 (4) | 58.26% (19) |
| 3 | District of Columbia | 17.6 (1) | 12.03 (51) | 114.48% (1) | 53 (1) | 49.18% (47) |
| 4 | Minnesota | 4.18 (14) | 0.8 (45) | 141.24% (9) | 197 (17) | 57.98% (21) |
| T-5 | Colorado | 6.11 (2) | 0.94 (49) | 147.35% (15) | 138 (2) | 51.1% (45) |
| T-5 | Connecticut | 4.19 (13) | 0.87 (48) | 140.72% (8) | 198 (18) | 57.85% (22) |
| 7 | Oklahoma | 3.92 (18) | 0.61 (31) | 152.19% (21) | 182 (10) | 59.49% (14) |
| 8 | Washington | 3.98 (15) | 0.57 (25) | 139.78% (5) | 200 (19) | 45.49% (51) |
| 9 | New York | 5.1 (4) | 0.84 (46) | 159.88% (40) | 159 (5) | 68.3% (1) |
| 10 | Maryland | 4.58 (11) | 0.74 (41) | 148.14% (17) | 173 (7) | 53.38% (37) |
| T-11 | California | 3.65 (24) | 0.78 (43) | 146.02% (13) | 207 (21) | 65.55% (4) |
| T-11 | Hawaii | 3.31 (27) | 0.43 (14) | 133.29% (3) | 242 (34) | 55.53% (30) |
| T-11 | Rhode Island | 3.8 (21) | 0.5 (18) | 153.9% (24) | 216 (24) | 63.08% (6) |
| 14 | Delaware | 4.83 (6) | 0.79 (44) | 149.75% (19) | 170 (6) | 51.78% (41) |
| 15 | South Dakota | 4.69 (8) | 0.38 (10) | 160.48% (41) | 194 (14) | 58.05% (20) |
| 16 | Nebraska | 4.6 (9) | 0.58 (26) | 161.93% (44) | 177 (8) | 60.18% (12) |
| 17 | Virginia | 4.8 (7) | 0.77 (42) | 152.95% (23) | 157 (3) | 48.18% (48) |
| T-18 | Kansas | 3.95 (17) | 0.59 (30) | 158.4% (33) | 197 (16) | 59.58% (13) |
| T-18 | Pennsylvania | 4.25 (12) | 0.65 (35) | 155.4% (30) | 181 (9) | 55.21% (31) |
| 20 | Missouri | 3.84 (19) | 0.62 (32) | 155.05% (28) | 196 (15) | 57.33% (23) |
| 21 | New Jersey | 3.97 (16) | 0.73 (39) | 158.93% (36) | 212 (23) | 66.33% (3) |
| 22 | Vermont | 4.59 (10) | 0.58 (27) | 156.52% (32) | 202 (20) | 51.34% (43) |
| 23 | South Carolina | 2.81 (41) | 0.33 (7) | 151.2% (20) | 241 (33) | 59.18% (15) |
| 24 | Iowa | 3.1 (34) | 0.53 (19) | 154.53% (26) | 255 (37) | 66.96% (2) |
| 25 | Alabama | 2.95 (39) | 0.31 (5) | 158.82% (34) | 220 (25) | 62.39% (8) |
| 26 | Illinois | 3.48 (25) | 0.86 (47) | 152.4% (22) | 225 (28) | 58.86% (16) |
| T-27 | Maine | 3.12 (33) | 0.28 (4) | 149.4% (18) | 264 (41) | 51.19% (44) |
| T-27 | Wyoming | 3.06 (35) | 0.38 (11) | 141.43% (10) | 317 (48) | 51.73% (42) |
| 29 | Alaska | 3.29 (28) | 0.66 (36) | 140.31% (7) | 250 (36) | 46.15% (50) |
| 30 | New Mexico | 2.79 (43) | 0.49 (16) | 145.29% (12) | 248 (35) | 53.99% (35) |
| 31 | Nevada | 2.79 (42) | 0.56 (23) | 147.25% (14) | 270 (44) | 56.54% (26) |
| 32 | Oregon | 2.9 (40) | 0.58 (28) | 140.03% (6) | 275 (45) | 49.95% (46) |
| 33 | Ohio | 3.2 (31) | 0.56 (22) | 155.35% (29) | 230 (29) | 52.77% (40) |
| 34 | New Hampshire | 3.29 (29) | 0.71 (38) | 147.71% (16) | 257 (39) | 47.08% (49) |
| T-35 | Michigan | 2.73 (45) | 0.43 (13) | 154.91% (27) | 269 (43) | 58.74% (17) |
| T-35 | Montana | 3.13 (32) | 0.35 (9) | 161.9% (43) | 299 (47) | 60.71% (11) |
| 37 | Tennessee | 3.03 (36) | 0.5 (17) | 158.88% (35) | 221 (26) | 54.41% (34) |
| T-38 | Georgia | 3.74 (23) | 0.7 (37) | 167.84% (51) | 186 (12) | 57.3% (24) |
| T-38 | Utah | 3.38 (26) | 0.57 (24) | 161.03% (42) | 210 (22) | 53.13% (39) |
| 40 | Arizona | 2.55 (46) | 0.65 (34) | 142.06% (11) | 269 (42) | 55% (32) |
| 41 | Kentucky | 2.34 (48) | 0.42 (12) | 156.43% (31) | 281 (46) | 62.94% (7) |
| T-42 | Texas | 3.84 (20) | 0.74 (40) | 165.77% (49) | 185 (11) | 53.44% (36) |
| T-42 | West Virginia | 2.42 (47) | 0.26 (3) | 154.19% (25) | 263 (40) | 53.25% (38) |
| T-42 | Wisconsin | 3.23 (30) | 0.58 (29) | 159.44% (38) | 240 (32) | 56.02% (28) |
| T-45 | Florida | 3.77 (22) | 0.63 (33) | 163.96% (48) | 223 (27) | 56.26% (27) |
| T-45 | Indiana | 3.01 (37) | 0.47 (15) | 159.06% (37) | 236 (31) | 54.99% (33) |
| 47 | Louisiana | 2.76 (44) | 0.32 (6) | 159.72% (39) | 256 (38) | 58.64% (18) |
| 48 | North Carolina | 2.98 (38) | 0.54 (20) | 162.63% (45) | 232 (30) | 57.16% (25) |
| 49 | Mississippi | 1.7 (51) | 0.19 (1) | 163.27% (46) | 374 (51) | 62.32% (9) |
| 50 | Arkansas | 1.92 (50) | 0.34 (8) | 167.58% (50) | 347 (49) | 63.52% (5) |
| 51 | Idaho | 2.1 (49) | 0.26 (2) | 163.69% (47) | 350 (50) | 55.76% (29) |
Note: The above table includes all metrics used in this report with the exception of State Tax Preparer Regulations. Only four states have such regulations:California, Maryland, New York and Oregon.
Ask The Experts: Tax Help Tips
We’re all about community at WalletHub. So, in the interest of helping the community better navigate tax season, we tapped our community of WalletGurus for expert advice on avoiding common mistakes, steering clear of scams, saving money and more.
- Which are the most common mistakes tax filers make during tax season?
- What are some tips and tricks for navigating the tax filing process and maximizing refunds?
- What are the tradeoffs between using online tax software versus meeting with a tax professional?
- What potential risks do consumers face when e-filling their tax returns?
- How can tax filers avoid being scammed when seeking tax help?
Ask the Experts
- Jared Moore and Pete Frischmann
Professors of Accounting, Oregon State University College of Business
Read More
- Reed W. Easton
Associate Professor of Taxation and Accounting, Stillman School of Business, Seton Hall University
Read More
- Xiaoyan "Tony" Chu
Assistant Professor of Accounting, Betsy Ayo Endowed Professor, Nicholls State University
Read More
- Ann B. Cohen
Associate Professor of Accounting, University at Buffalo School of Management
Read More
- Robert Duquette
CPA, MBA Adjunct Tax Professor at Lehigh University
Read More
- Linn Groft
SaveFirst Director and Media Production & Online Engagement Director, Impact Alabama
Read More
Methodology
Local differences in the accessibility, affordability and effectiveness of local tax help are somewhat difficult to quantify, and while none of the metrics that we used in this report are perfect in their own right, they do collectively illustrate the general tenor of the local landscape.
Accountants Per 1,000 People – Weight: 1
This metric speaks to the accessibility/prevalence of qualified tax help within a given state. The more accountants there are, the better off taxpayers should be. Even if all of the accountants in a given area are not focused on individual tax preparation, a large number of qualified tax professionals in a given area speaks well to the accessibility of helpful information – whether formal or informal – as well as the vibrancy of the local tax community.
Accounting Job Openings Per 1,000 People – Weight: 0.5
A state with a high number of accounting job openings would seem to have tax needs that are not currently being met. For the time being at least, such areas are not great places to find tax help. Given that the data used to construct this metric likely includes non-tax accounting job openings, we assigned it only a half weight.
Affordability of Tax Help – Weight: 1
This metric reflects the ratio between the average hourly rate for accountants and auditors in each state and the average wage in each state.
Returns Filed Per Accountant – Weight: 0.5
The metric speaks to the workload of local accountants. Tax preparers who have fewer returns to work on are able to be more attentive to each case and are therefore less likely to make errors and omissions. Given that the number of accountants used to construct this metric includes accountants of all specialties, we assigned it only a half weight.
Percentage of Filers Paying for Tax Help – Weight: 0.5
A high number of paid returns indicates cheap, accessible and effective tax help. However, given that state-by-state wealth disparities and differences in tax code complexity stand to influence the rate of paid returns, we assigned this metric only a half weight.
State Tax Preparer Regulations – Weight: 0.5
Four states (California, Oregon, Maryland and New York) have established regulations for independent tax preparers who are not otherwise qualified as CPAs, attorneys, banking officials or “qualified agents.” Given the prevalence of scams and fraud in the tax space, this report viewed those states favorably. However, we assigned this metric a half weight since the use of such regulations can currently be measured only in a binary sense.
Source: The data used to conduct this report is courtesy of the Internal Revenue Service, the U.S. Census Bureau, Indeed.com, and the U.S. Department of Labor Statistics.