Effective tax administration is a major pillar of revenue generation. With digital transformation permeating every aspect of businesses, it only makes sense that the tax management process must also shift from spreadsheets to digital systems that can capture the intricacies of local jurisdictions. This is where tax software comes in.
Tax software offers tools that automatically adjust entries based on local standards and delivers effective tax management. Aside from increasing tax compliance, the use of digital technologies in the public sector facilitates the collection of valuable data that can inform strategy. It benefits both the government and the taxpayers. When it comes to the digitization of tax administration, 92% of tax managers agree that the transformation is moving faster than expected (Deloitte, 2021).
To help you find a system that works well with your tax administration processes, this guide presents a list of the best tax software on the market. The key features of each platform are provided, as well as pricing information to aid tax preparers in making informed software purchasing decisions.
Digital tax administration has recently been transformed with the application of artificial intelligence (AI), the Internet of Things (IoT), cloud computing, and blockchain technology, among others. According to a survey conducted by the OECD (2021):
The tax software statistics in the report also revealed that governments have also been increasing the use of public financial management systems to streamline workflows and boost productivity.
Source: Tax Operations Transformations Trends Survey by Deloitte 2021
Aside from pursuing efficiency and productivity through automation, businesses are seeking more strategic counsel from tax. To accelerate sustainable transformation, companies are exploring uncharted territories in tax administration. Among them, 65% see more effective tax administration as a potential source of deeper advisory support, while 49% expect that it would help in supply chain restructuring (Deloitte, 2021). In fact, heads of tax from global organizations are saying that digital tax transformation will have a moderate (55%) to high impact (37%) on tax operations and resources (Deloitte, 2021).
Tax software statistics also show that when it comes to the adoption of tax software, 78% of users prefer having the platform in their own network rather than cloud-based. Only 22% use tax software from the vendor’s server. Among the top benefits identified by tax software users are the comprehensiveness in the number of forms (54.2%), ease of use (50.3%), and accuracy (49.9%). On the other hand, major pain points include price (54.7%), tax research (33.1%), and lack of support service (14.8%) (Journal of Accountancy, 2022).
Source: PWC Paying Taxes 2020
The transition into digital tax collection has delivered unprecedented benefits but also challenges most notably in the area of security. The following tax software trends are set to influence how software products will be designed and used by tax preparers.
Implementing a tax technology strategy, however, is not as simple as adopting new technology. In the area of tax administration, organizations that maintain data in multiple systems will be challenged by inconsistencies in data. Another possible hurdle is the lack of tax function in current ERP systems, as well as the difference in compliance and standards among jurisdictions. As such, it is important to thoroughly assess prospective tax systems and choose one that can keep up with industry standards and align with your company’s goals.
Source: Tax Operations Transformations Trends Survey by Deloitte 2021
TaxDome is an all-in-one platform for the management of tax, bookkeeping, and accounting. It manages clients, documents, jobs, and teams. TaxDome reduces operating costs by replacing your accounting tech stack with a single platform that takes care of workflow automation, document management, and integrated tax CRM.
For both internal and external clients, TaxDome provides an outstanding user experience. For clients, the platform facilitates secure payments, secure sharing of documents, and secure communication. TaxDome supports seven languages.
TaxDome plans start at $25/month for one user.
Mango Practice Management offers a suite of tools that makes it easy to run your business. It tracks time spent on client services, streamlines workflows and task management, and helps you secure file sharing and e-signature collection.
As a fully integrated platform, Mango Practice Management covers project management, document management, time and billing, reporting and analytics, and integrations in one platform. In addition, Mango Practice Management easily integrates with the business tools that matter to your business.
Mango Practice Management plans start at $35/user/month.
Taxfiler is an accountancy and tax software that offers tools for accounts preparation, corporation tax, personal tax, partnership tax, VAT filing, and for filing tax for trusts and estates. It also has a deadline diary that organizes all tax filing activities.
The VAT Filers helps clients comply with the requirements of the Making Tax Digital initiative in the UK. Taxfiler connects seamlessly with other popular bookkeeping systems while keeping tax returns in one place. Taxfiler delivers complete compliance with flexible solutions.
Taxfiler starts at ￡10/month for a single user with a maximum of 10 clients.
Avii is a software solution that provides a unified workspace for accounting teams. It offers powerful tools for automation that connect workflows between clients and practitioners that improve relationships and deliverables.
The cohesive suite of solutions offered by Avii enhances accounting practice management for tax, advisory, audit, compliance, and management consulting organizations. The Avii platform unifies all client interactions, interconnects all accounting systems and workspace, and automates processes.
Digita Professional Suite is a fully integrated software for accountants that offers tax and accounting solutions. It links software modules around a central database and manages personal tax, corporation tax, accounts production, practice management, and company secretarial solutions.
As a scalable compliance software, Digita Professional Suite manages the compliance process and enables organizations to save time. It offers cost-effective tax and accounting packages through the Efficiency Packs that provide flexibility to accounting teams.
Digita Professional Suite starts at ￡45/month for 10 desktop-based user package.
Taxaroo is an online accounting and tax practice management software that offers tools for boosting operational efficiency. The client organizers of Taxaroo make it easy to collect, manage, prepare, and share documents. It also offers a secure document portal.
Clients can easily sign documents using the IRS-compliant electronic signature functionality, and make electronic payments. Taxaroo keeps clients connected through integrated chat, text messaging, and video calls.
Taxaroo plans start at $99/month. For those interested, the vendor offers a 14-day free trial.
Automated Tax Office Manager (ATOM) is a practice management software solution for tax and accounting offices that incorporates systems developed by leading tax professionals. As such, ATOM’s suite of tools can guarantee flexibility, scalability, and adaptability.
As an all-inclusive app for tax and accounting, ATOM helps firms save on practice management costs by using automation in document management. Task assignments are in a central location, which ensures that projects are completed on time.
ATOM plans start at $149/month or $1,499/year.
Once Accounting, formerly BaCo Tech, is a software solution that unifies all accounting data to optimize tax preparation and planning. It has an intuitive year-round tax planning feature and automates tax preparation.
This platform provides real-time alerts and catches client data entry issues and makes clients smarter with proactive tools. Making book-to-tax adjustments eliminates repetitive annual adjustments and creates efficiencies.
Corvee Tax Planning is an accounting software solution that includes tools for multi-entity planning and calculates estimated task savings at the federal and state level. This platform uses a questionnaire to develop strategies for clients. It also comes with detailed information and requirements from the Internal Revenue Service (IRS) as well as generates transparent calculations.
The tax return scanning tool of Corvee Tax Planning collects the tax information of each client for the past year. It automatically adjusts tax calculations and uses six different calculations for tax accuracy. Corvee Tax Planning is used by accountants, tax advisors, and tax attorneys.
Fyn, formerly Bear Tax, is a tax software solution specifically designed to calculate the performance of crypto investments for tax reporting purposes. It is used by CPAs and accounting firms to compute crypto tax by using APIs. The Fyn platform performs digital asset accounting and is built for global enterprises.
Fyn easily integrates with your financial tools and workflows so you can gather all the data that you need for tax and accounting processes. It offers solutions for internal teams and accounting firms, and also for custodial and treasury assets.
Fyn can be used to import transactions, calculate gain/loss, and generate summaries of gain/loss for free. However, the platform requires a subscription should you decide to download a detailed CSV for tax reporting or capital gains.
OIC Tax Planner is a tax resolution software that provides the required tax representation forms and current IRS Offer in Compromise regulations in one platform. It is the ideal software for handling Offer in Compromise, Currently Non-Collectible, Installment Agreement, Spousal Defense, CDP, and other IRS collection cases.
The network edition and the online edition are the two solutions offered by OIC Tax Planner. Both allow your accounting team to manage multiple accounts and businesses and deliver complete tax resolutions to clients.
OIC Tax Planner is currently priced at $249
SeQwens is a practice management solution that simplifies tax and accounting processes through automation. It offers a wide range of tools, including a secure document portal, online client organizers, and other tools that enable tax and accounting teams to grow.
The SeQwens platform facilitates a multi-office management portal and has an integrated customer management tool that captures leads and keeps customers close. Through the customizable client portal, clients can access all their forms, emails, and invoices in one place.
Taxjoy is a messaging platform built for tax professionals in order to secure and streamline communication with clients. This tax software facilitates easy and secure document sharing for seamless tax preparation.
As a collaborative tax management tool, Taxjoy includes tools for task and questionnaire management, insights, practice management, and payments. Client data is fully encrypted using 256-bit SSL encryption, ensuring secure communication at all times.
Taxjoy plans start at $45/user/month. However, the vendor also provides a free plan for small businesses or freelancers that handle only up to 20 entities per month.
Aeco Tax Technology is a tax software that provides digital transformation services by analyzing your current IT strategy and providing a digital roadmap for your strategy. It automates repetitive tasks, facilitates change management, and provides integrated solutions.
By helping tax and accounting firms build an integrated solution, Aeco Tax Technology assists in streamlining processes and automating workflows. In addition, it helps in vendor selection to ensure that only the most applicable systems are built into the unique work processes of tax and accounting teams.
TaxWorkFlow is a premium tax software and practice management solution that simplifies the tax preparation process by creating streamlined workflows. It allows users to customize tasks at the universal or individual client level and ensures that a full tax return is completed on time.
The robust system of TaxWorkFlow alerts the user of errors and other issues. The document management system facilitates the easy organization and sharing of documents while the integrated email system keeps everyone in the loop.
TaxWorkFlow is only available through an annual fee of $1,500.
The best tax software for tax preparers significantly reduces the time spent on tax administration and preparation. In addition, it is able to collect data that can support and accelerate sustainable transformation for your practice. However, to increase citizen engagement, tax software should be able to provide a seamless experience. Remember, the adoption of advanced technologies in the area of tax administration requires a deep understanding of context, stakeholders, and technology to gain its benefits.
In addition, it is important to note that investing in this type of software alone may not be enough to deliver your expected results. Tax software is just one of the many types of government software that help accelerate the digitization of public sector processes. As such, to reap the rewards that digital transformation has to offer, it is crucial to build a solid tech ecosystem for your practice and come up with iron-clad adoption strategies and policies.