How to Choose the Best Tax Software

Knowing how to choose the best tax software for your business will save you a lot of time and increase productivity.

Manual tax preparation is time-consuming and prone to mistakes and errors. Luckily, tax software helps ensure precise taxes are paid, safeguarding you from tax overpayment or underpayment, which can negatively impact your profitability.

If you are running a tax preparation firm and manually entering client data, you may have to hire several staff, increasing business costs. Investing in the best tax software can minimize labour expenses while saving money and eliminating the need for manual data entry. Preparing tax manually reduces your team’s productivity.

With the right tax tool, you can automate tax preparation processes for increased efficiency and productivity. Data privacy and security play a vital role in your tax firm’s success and growth.

Tax solutions have advanced security features for data privacy and security. To make the most of your tax software, ensure it aligns with your business needs and requirements. Here is how to choose the best tax software for your business.

1. Weigh between cloud-based vs. desktop-based tax software

A tax preparation business requires picking the tax tools you’ll invest in. While cloud-based and desktop-based tax software can help meet your objectives, weighing the pros and cons of each can enable you to settle on the best one.

Cloud tax software lets you connect, keep, and control all your tax information from multiple locations. It makes it easier to download documents, such as bank statements directly into your software for a quick comparison with business financial records to ensure everything adds up.

Since the cloud tax software is kept in a remote server, you can access your files from anywhere using any device, provided it has an internet connection. This software functions fully in the cloud, meaning you don’t need to maintain or install software on several computers. The desktop-based software should be downloaded and then installed on your computer.

Since the program is pre-bought, extra expenses like hiring an expert to install and update the program, server installation, and licensing fees for every computer system with the software installed may be involved. Desktop tax software has useful feature options you can leverage and may be integrated with your firm’s network.

2. Consider pricing

The best tax software should suit your financial needs. However, determining its actual price can be challenging. While you can find the cost of tax software on a provider’s website, fees, and other additional expenses may not be included.

Some providers may charge extra fees for filing a substantial number of returns. This is why you should carefully read and understand the terms and conditions of use and inquire about the extra you might incur upon adopting the software.

Be cautious of software prices that significantly fall below competitor costs because this could signify limited function.

3. Know the features and functionalities to look for

The correct tax software should be robust to enable you to do your work successfully with room for scalability. Knowing the features to look for in tax software ensures your investment is worthwhile.

Ensure the software you settle for the forms you require to file client tax returns. The most basic options may not contain what you need if you deal with business clients. So, research to find solutions that align with your business requirements.

For robust functionality, you should also look for audit protection, quick tax estimators, mobile apps, and refund calculators.

4. Ascertain platform compatibility

Based on your specific business requirements, you want tax software that runs well on your device.

Most tax programs have mobile applications or web-based software, which lets you work from anywhere as long as you have an internet connection. However, other platforms may not be completely compatible with different media. Consider whether the software works on PCs, Macs, or both. If it has a mobile app, can it work on iOS and Android phones?

The software’s compatibility and flexibility are vital, so ensure it can operate on your platforms before purchasing.

5. Ensure ease of use

Tax preparation processes can be complex, so you don’t want an intricate solution that introduces further complications. Considering that some tax programs can be challenging to use, familiarizing yourself with the user interface before purchasing can be helpful.

Ensure the interface is straightforward enough for easy tax preparation. You want to avoid buying software only to find that it makes tax preparation more confusing or difficult to navigate.

When choosing tax software, ensure it has simple navigation menus to determine where to input tax forms. Consider whether there’s a Q&A interview with the correct queries to direct you to the tax forms needed to file tax returns. Go for tax software that allows for a trial before committing to pay.

6. Consider how robust the security features are

Tax documents are sensitive and shouldn’t be made public. Only you and a few trusted team members can see your clients’ financial information.

The desktop tax software wouldn’t be ideal, as it keeps data in physical drives, which can easily be stolen. Web-based tax software uses cloud-based security protocols, which leverage advanced data protection and are more robust.

However, your web-based tax software may be compromised if you use public computers, including those in printing stores, coffee shops, and insufficiently regulated offices.  

7. Ensure seamless integration and installation ease

The right tax software should seamlessly integrate with your firm’s existing systems and operations to eliminate silos, foster robust development and growth, and drive overall strategic and operational efficiency. It should also be easy to install without requiring much time and support from the provider.

8. Ascertain guaranteed accuracy

While tax software makes it easy to complete tax preparations, it also gives you more accurate returns. The software you choose should provide an accuracy guarantee that the program’s calculations are correct. This guarantee should apply to the software’s mistakes, not the user’s.

Accurate returns help minimize the risk of errors that result in an audit while reducing the possibility of getting maximum credits and deductions or optimal tax refunds where warranted.

9. Look for customer support options

Since you might need help handling your tax return, review the available support options.

If you can reach support through the phone, find out the provider’s operating hours and consider whether the product you are buying provides email or live chat support when doing your tax return. Inquire if there are upcharges for extra support and, if so, at what cost.

The best customer support option should have a tax professional option for customer service and technical support to help file taxes. This will ensure your queries are responded to on time should something go wrong with the software.

Avoid compromising on the value of this one because excellent tech support may turn a significant crisis into a mere inconvenience.

10. Find out how the data conversion process works

Switching tax software can be time-consuming, thanks to data conversion. If you are worried that client data may be lost or become hard to navigate and misformatted, talk to a customer care representative to learn how the software provider helps with data integration.

Ask specific questions to know how challenging or easy data integration can be. Find out how you’ll be guided via the data conversion procedure, how long the process takes, how you can back up your data before conversion starts, the problems other users face when integrating data, and the role customer support plays in helping you convert your data.

11. Ensure that the tax software is low maintenance

When selecting the best tax software for your business, ensure it is easy to use and doesn’t need a lot of maintenance.

Find software that handles changes well and updates automatically because tax laws change frequently, and it may be challenging to stay updated with these changes will all the work you have to do.

Endnote: How to choose the best tax software for me

Knowing how to choose the best tax software is crucial for any tax preparation business or individual. Use these tips to choose the best tax software for your business:

• Weigh between cloud-based vs. desktop-based tax software.

• Consider pricing.

• Know the features and functionalities to look for.

• Ascertain platform compatibility.

• Ensure ease of use.

• Consider how robust the security features are.

• Ensure seamless integration and installation ease.

• Ascertain guaranteed accuracy.

• Look for customer support options.

• Find out how the data conversion process works.

• Ensure that the tax software is low maintenance.