Become a Certified Tax Preparer
Tax preparation can be a profitable and rewarding gig, provided you’re suitably educated and certified to do it.
While there are some huge tax preparation firms out there, the majority of accountants and tax preparers work for small, local operations – often in the service of long-time community members and other area businesses.
These firms are great, and there’s a lot of expertise housed in these small operations, but they still need the right tools to succeed. Unlike a huge firm like H&R Block, though, they’re not about to produce their own tax software. They need to look to a third-party program, but which one?
In order to choose the best tax software, there are a number of factors any preparer should consider, and there are a number of different options out there. Here’s who’s competing for your business and what’s on offer from each.
Before diving into the different programs on offer, it’s important to establish a few points of evaluation. Among the most important factors to think about before choosing a tax preparation program are the following:
Platform: Tax preparation software comes in two major forms –
conventional, desktop programs. While most business functions are transitioning to the cloud for all their functions, some tax professionals still prefer desktop programs. The advantages of cloud-based programs are debatable for tax preparers compared to other industries, since you’ll still typically need new software each year. Some brands will let you renew your subscription and will provide updates, but constant changes to tax code have long presented a challenge to professionals and program developers alike.
Firm Size And Function: You’re a small preparer compared to the major players, but that doesn’t mean you’re preparing taxes as little more than a part-time job. For example, you may be a small firm that does taxes, accounting, and auditing; in that case, you’ll need different capabilities. Even if you’re just doing taxes, you’ll still want to carefully run the numbers to see what filing and tax document storage options will best accommodate your needs.
Desired Integrations: Easy return completion relies heavily on having access to the right software integrations. Just about any program will sync with common programs like QuickBooks, but look much beyond that and you’ll be more limited. Simply filtering the software offerings by available integrations will significantly reduce your options.
Customer Support: Any time you’re using software from another company, you want to be assured that you have access to tech support any time you need it. During peak tax season, you don’t have time to mess around with crashing software; you need immediate access to support. Be sure to look into what the software company offers in terms of customer service.
Security: In the last year, there’s been increasing concern around tax return theft and, even among professional preparers – this isn’t just a problem for people doing their taxes at home. It’s important to evaluate the program’s security history and ask the supplying company what steps they’ve taken to protect users and end clients.
There are an awful lot of tax preparation programs on the market, but you only need to seriously consider a few of them; the majority are really only made for individuals and won’t be sufficient for your needs as a preparation firm. The main tax programs available to small preparers are Lacerte, Drake, and ProConnect Tax Online. Each of these is also available with varying degrees of access, including different features, forms, payment models, and hosting options.
What about the big names like H&R Block or JacksonHewitt? The fact is, the biggest names don’t make tax software for professionals because that would be a threat to their core business. Instead, they just make programs for individuals who would prefer to do their own taxes. After all, who wouldn’t prefer a small preparer and the personal connections that come with that to a megacorporation? We trust community firms and organizations, so you won’t find H&R Block, JacksonHewitt, or similar companies on this list.
ProConnect And Lacerte – One Parent Company, Two Choices
ProConnect Tax Online and Lacerte are both made by Intuit, one of the biggest names in digital tax preparation, so what’s the difference? There are a number of major points of divergence between the two programs. One of the biggest differences is that ProConnect provides practice management solutions and is cloud-based, allowing for constant updates, while Lacerte is a PC-only, desktop program without firm management tools.
From the start, this distinction between ProConnect and Lacerte would suggest that ProConnect is the dominant program, but a big problem with this platform is that it’s really designed for smaller firms. William Perez at FitSmallBusiness only prices the platform up to 99 returns, and while the platform can handle some business filings, it can’t tackle payroll taxes.
Lacerte, in comparison, is considered to be the gold standard for high volume or complex filings. Even small preparers are likely going to complete more than 100 returns in a season, and you certainly want the option to tackle any filing clients bring your way. You can’t provide specialized services without the additional features that come with Lacerte. The Lacerte platform is also substantially more customizable and can easily handle multi-state returns.
Drake – For All Around Professionals
Closer to Lacerte than ProConnect, DrakeSoftware’s professional tax software is surprisingly affordable – though the number may come with some sticker shock at first. That’s because Drake’s unlimited program allows firms to file as many individual and business returns as needed for no added filing fees, setting the platform apart from competitors. If, as a tax preparer, you’re hoping to undercut some of the other firms, Drake’s pricing may work to your advantage, but the price isn’t the only benefit to the Drake software.
One of the major advantages of the Drake tax preparation software is that it’s perfect for any workflow arrangement. While Lacerte and ProConnect only sync with QuickBooks and other basic programs, the DrakeAccounting interface comes ready to link up with Quickbooks, as well as GruntWorx and SecureFilePro. Drake also makes their own e-sign and e-pay programs, making it easier for your firm to offer start-to-finish services. One of the only major complaints about Drake from those evaluating the program is that it can’t import 1099 data from financial institutions, but compared to what it can do, this is a mild gripe.
The Final Decision
While it’s easy to compare pricing and integrations between different tax programs, many of the most important factors in your decision are what might be described as intangibles. Ultimately, it comes down to comfort – do you like the keyboard shortcuts available? What program did you use at a previous firm? Is the interface intuitive? No one else can evaluate these factors for you, but any company worth working with will be happy to demo their program for you. The chance to onboard a new customer is too important to let slip, so don’t hesitate to ask.
At Taxfyle, we want all of our tax professionals to feel comfortable, so we don’t mandate the use of a particular platform. All that’s important to us is that you can provide high-quality results to clients. In fact, this relationship goes both ways. Whether you’re a firm partnering with us through our onshoring program to increase your capacity or you’re an independent CPA or EA looking for jobs, how you complete a return is up to you. There’s room for everyone in the Taxfyle family.
Contact Taxfyle today to learn more about how we can work together to enhance your tax preparation services. The traditional firm structure is alive and well – we’ve just found a way to make it work better.
Get the latest posts delivered right to your inbox