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Curious how to save half the time on preparing taxes?
There's tons of pressure every tax season. Between busywork, calculations, and the annual deadline, tax pros need help from software.
Here's the issue…
The tax prep industry is growing massively. Statistics show over 78% of taxpayers use tax software to file their taxes today. That number continues to climb each year.
It's no longer optional for professionals.
If you prepare taxes for clients each year, this article is for you. I'm going to cover the top features your tax software needs to help you save time while running your professional practice.
Let's cover…
1. Why Tax Software is Important for Professionals
2. Essential Features Professional Tax Programs Should Have
3. Faster Processing With E-Filing Options
4. How to Select the Best Option For You
Why Tax Software Is Important for Professionals
Tax preparation isn't what it used to be.
Not even close.
With changing regulations, shorter deadlines, and clients expecting more, professionals have to embrace automation to keep up. Manual return prep is a thing of the past.
Here's some food for thought…
Between 2015 and 2024 we'll see self-prepared returns increase from 50 million filings to over 66 million. That's a 32% jump in the LAST DECADE.
As a professional, you NEED to be leveraging technology to help you keep up.
One wrong deduction on your client's return = lost money for them (and you).
We all know how important money is when it comes to taxes. That's why your tax filing software for professionals should empower you to prepare accurate returns fast.
Top benefits of quality tax software:
- Minimize data entry errors
- Speed up return prep time
- Stay compliant with automatic updates
- Connect with clients easily
Simple stuff. Let's dive into the features that can help your prepare accurate returns quickly.
Essential Features Professional Tax Programs Should Have
Not all tax programs are created equal. When researching tax prep software for your professional practice, look for these features:
Automatic Calculations
I can't stress this enough. Doing your client's taxes manually opens you up to careless math mistakes.
Good tax programs will do all of the calculations for you.
The IRS reported closing over 505,000 tax audits in 2024. The IRS also recommended taxpayers pay over $29 BILLION dollars in extra taxes. YIKES.
Many of those math errors could have been avoided with good ol' fashioned tax prep software.
Wide-Ranging Form Support
Tax pros work with all types of clients. You need software that can handle any form of tax return.
That means support for…
- Personal tax returns
- Business owners
- Partnerships
- S Corps
- Quarterly estimated tax payments
Everything.
Smart Error Detection
This is where modern tax prep software REALLY shines.
Top-notch software will detect common errors before you even hit "e-file." It will highlight missing data, inconsistencies in your client's information, and basic errors that may raise a red flag with the IRS.
Accurately prepare returns FAST.
Client Information Management
Smoothly managing multiple clients is a MUST.
You should look for software that allows you to communicate with your clients through secure portals. Not only will this allow you to easily send intake forms and information requests, but you'll be able to pull up prior year returns quickly.
Look for these qualities:
- Client upload portals
- Import prior year client data
- Automated reminders when information is due
- Encrypted storage of client files
Faster Processing With E-Filing Options
The option to e-file returns has revolutionized the tax preparation industry.
Instead of printing, folding, stuffing, and mailing your client's returns… You can e-file returns directly to the IRS and receive confirmation in mere hours. That's days of processing time saved per return.
There's more benefits to e-filing than just saving time, too.
Quick Returns for Your Clients
E-file returns are typically refunded within 21 days. Individuals who mail in their returns? It's now six weeks or more.
Happy clients remember who helped them file quick.
Lowered Rejection Rates
Did you know that e-filed returns are checked by the IRS prior to actually hitting their database?
That means if you're missing a form or made a simple formatting error, the IRS will notify you via email immediately.
Paper returns? Who knows when your client will find out there is an issue.
Combined Federal + State Filing
Many software options allow you to e-file returns at BOTH the federal and state level.
Say goodbye to preparing separate documents and tracking two deadlines.
How to Select the Best Option For You
You've made it this far. Excellent.
There are tons of options out there for tax pros these days. How do you know which one is best for you? Here are some tips.
Assess Your Clientele
Take a serious look at your current client base. Are you servicing small business owners? Do you prepare individual returns year-round?
Your ideal software will mirror your client workload.
Integration Capabilities
Tax software shouldn't live on its own.
Look for programs that can integrate with your current accounting software, client portals, and even document storage. These technologies shouldn't force you to enter the same information twice.
Support and Training
This computer software makes ZERO difference if you don't understand how to use it.
Make sure you know what kind of support the vendor provides BEFORE purchasing. Do they offer phone support? How long are clients on hold? Is there live chat support? Training for YOU and your employees?
Ask questions!
- What training is provided? (both for you and your clients)
- How long does it take for support to respond?
- Are updates included in your price?
- What happens if you exceed your return limit?
Test It Out
You'll be happy to know that nearly every software vendor offers a trial period.
Take them up on it. Run a few returns through their software. See how intuitive the interface is. Make sure it works for YOUR business, not the other way around.
Don't settle when it comes to your tax software.
Wrap Up and Key Takeaways
Preparing taxes wouldn't be possible without modern-day software.
The right platform can save you countless hours each season. Not only will you prepare accurate returns, but your clients will receive their refunds faster than ever before.
Remember:
- Software should do the math for you
- Make sure it supports ALL of your return types
- Use software with e-filing capabilities
- Test it out before your purchase!
Tax professionals that use smart software gain a massive advantage over their competition. Take some time to research your options. Tax season always arrives faster than you think!
