Exodus to Turbo Tax

Some clients with STRs are doing well. Some aren't. Those that aren't are the larger, 4+ bedroom STRs that are geared toward group stays and events. The small 1-3 bedroom are still doing okay. IMO, the airbnb market got carried away the past few years. It wasn't uncommon to see $500/night places in areas that had clean and reasonable hotels for $120/night.

As far as clients go, most of mine are doing fine. And there's value that we can provide in bad times as well as good. I don't expect an material exodus to DIY software.

Those that overleveraged are exposed IMO. In the past few years a significant percentage of the population bought homes at inflated prices and vehicles at inflated prices, and are up to their necks in debt. It's "doable" as long as there are two incomes, but if one spouse gets laid off, they'll be in dire straights very quickly and (I imagine) will need to sell the house. A lot of that happening at once will put downward pressure on house prices.

In this economic environment, the smart move is deleveraging and stacking cash.

I had lunch this week with a good friend of mine who is a residential home developer. He is still growing and is cautiously optimistic, which mirrors my own take on the overall economy.
Generally, I'd say the foundational dynamics of the US economy are pretty solid. Still more work than there are people to do it although there is an increasing amount of frictional unemployment as some companies are cutting people while others are trying to connect/hire them. That will cause some bumps, but should be better overall.
I don't think the Presidential election will affect this terribly. I'll leave it at that.
I'm hoping the current environment reduces some of the chasing of bubbles by investors. I think that would be a positive.

STRs are like every other "get rich easy" scheme: the early adopters do fine, as well as the ones who sell the equivalent of pickaxes during a gold rush, while everyone else gets to learn a hard lesson. Lately I've been cautioning clients against these unless they can buy and fix up a property on the cheap and manage it themselves upon completion. AirBnB/VRBO owners can choose to have income or they can choose to be passive, but not both at the same time.

I'm not super optimistic about the economy as a whole. The tech sector over-promises and under-delivers, and people are finally realizing that is also the case with LLMs/AI. Existing tech companies face an increasingly rocky road around the world and I don't see anything in the pipeline that will save the tech sector. When the tech sector sneezes I think they will also blow over the house of cards that the rest of our economy is.

I do not believe any presidential candidate will be able to make a positive impact on it.

In this economic environment, the smart move is deleveraging and stacking cash.

Absolutely true.

We strive to serve all clients well, but despite this - each year, we have a few clients leave to DIY with TurboTax, etc. They are almost always clients with the most basic returns that struggle with justifying the cost of professional tax preparation. I understand these situations.

Ultimately, these were clients that just don't value what we do enough. So, we need to fill the capacity that they freed up with clients that we can provide a better value proposition to.

With TurboTax, AI, IRS FreeFile, and other online tax prep - we're always going to be susceptible to losing some clients. (In some ways, this is similar to computerized word processing eliminating secretarial / typing jobs.) Many taxpayers will be successful with their inexpensive tax prep, and others will screw it up and get notices, etc. and need help later.

Maybe it's time for tax professionals to just not hire anyone who has worked for Intuit!