The main purpose behind tax software is to assist tax preparers in preparing and filing tax returns for others in the most efficient manner possible. Tax software provides the preparer with a faster and more convenient way in organizing and calculating how much is owed or the refund they will receive. The software also provides step by step instructions for the preparer and makes sure that no field is missed, while also clearing up questions they may have. They have key features like diagnostics that make you aware of any incorrect inputs or fields you may be missing when trying to file the return.
Your Tax Situation
If you are considering purchasing a tax software it is important to think about the kind of situation you’re in and whether you will be dealing with straight forward returns or more complex situations. Whatever the situation may be the this will be a key indicator of what kind of tax software you may purchase.
Tax Software Options
There are variety of tax software available for people to file their tax returns whether it is a free program for simple 1040’s plus Schedules 1, 2, and 3 or unlimited state and federal tax returns. It all depends on what the company is offering, the software will strictly only allow the filling of 1040’s. With this in mind the major tax software providers include
- Intuit ProConnect: known for its cloud-based convenience.
- Drake Tax: favored for its user-friendly interface.
- TaxAct Professional and TaxSlayer Pro, are also great options.
These tax software’s vary in features, pricing, and integration capabilities, so tax professionals should research and choose the one that best aligns with their specific requirements and the needs of their clients.
Annually, the Journal of Accountancy (J of A) and the National Association of Tax Professionals (NATP) put out a survey to tax professionals to rate the software they use. Below is an image of the J of A 2023 survey results. You can read the results of each survey by clicking each of their names below:
Pricing & Plans
In regards to pricing, software cost vary widely and have different plans that may apply to each individual preparer. To begin Drake has three different plans offered to people and they all vary and have add on prices. Similarly, Intuit offers different prices for 3 different software’s with descriptions on what each one offer, this option is relatively cheaper than Drake. TaxAct has a similar approach with a variety of 1040 bundles available for purchase. Finally, TaxSlayer offers three bundles with prices that range from $1,200 up to $1,600.
It’s also important to note that you don’t HAVE to buy the full version of a tax software. Many offer what is called “Pay Per Return” where you pay for a base number of tax returns. If you go over that amount? Well, then you pay for each tax return you need over that. Make sure you check out the YouTube video below as we discuss Pay Per Return in detail.
Overall, most tax software’s have similar prices and bundles based on the options and the amount of forms that they allow a preparer to file. These are not your only options, but these are the major providers for tax software’s.
Factors to Considered Before Purchase
In order for you to make the right decisions on the specific tax preparation software to use consider the following factors:
- User-Friendliness: How smooth and quick the software reacts and works with you as your inputting data. If there are little reviews or feedback on the actual software then we recommend taking advantage of demos or free trials offered by the providers.
- Data Integration: How easy it is to convert your existing files and client data to the new software. Asking a customer representative gives you the opportunity to determine how easy or difficult data integration is.
- Customer Service: Customer service aids you through any obstacles you may face during the preparation process, or even during data conversion. Therefore, it is crucial that they are helpful and there to help.
Questions to Ask Representatives:
- What problems do other customers usually encounter when integrating their data?
- How can I back up my data before the conversion process begins?
- How long does data conversion usually take?
- How will I be directed through the data conversion process?
Cloud-Based vs. Desktop-Based Software
Every software is different in regards if it is a cloud-based software or desktop-based. You may work anywhere with internet connection on any device with the convenience of cloud-based software. Desktop-based software sometimes supports a variety of forms than cloud-based software and can be incorporated into your office’s network server. You must consider the kind of necessities your business needs since it is an important step in order to assure a successful business. There is an article highlighting the benefits and disadvantages of each type of software.
Summary
Overall using a tax software can have a variety of benefits for your business and practice in tax preparations. Therefore, it is crucial for you to do further research to figure out what tax software will be the best for you. There are a number of factors to consider other than just the price such as how easy it is to navigate through the system and data transferring. So keep in mind that there are great range of providers that can offer exactly what you are looking for.
The tax software options we reviewed give you the advantage of increased efficiency, reduced errors, and saving time. With this being said take, the next big step in preparation for this upcoming tax season and stop filing with the traditional paper tax returns and turn to e-filling with a tax software.
If you want our take on the 5 Things You Need To Start Your Tax Business, then check out the video below. In it, we talk about tax software specifically. 😉