Best Tax Software for Professionals - How to Improve Your Tax Game

20

Min Read

Tom Smery

Tax filing can be quite stressful, especially if you are a CPA or an independent tax pro - which means that the best tax software for professionals may turn out to be your biggest ally.

However, considering the number of programs out there, how do you choose the one that works best for your services? What factors should you consider, and what are some good suggestions to use? Well, read on and find out which programs are more equipped at handling your tax information.

Note: If you want to use the best tax software for professionals on the market, try Bonsai Tax. Our app could scan your bank/credit card receipts to discover potential tax write-offs. In fact, users typically save $5,600 off from their tax bill. Claim your 14-day free trial today.

How Taxes Are Filed

When it comes to filing your taxes, there are three ways for you to get things done. These methods include:

Manual Filing

Manual filing is the cut-and-dry method for tax preparation. To get things done this way, you'll need to file form 1040, also referred to as the Individual Tax Return form.

One thing that you have to remember is that manual filing of paper tax returns is among the slowest to process. The IRS is looking at a backlog of as many as 3 million tax returns - all of which need to be done manually. Once you fill in the tax documents, you are looking at a processing time of 20 weeks.

Tax Software Programs

Professional tax software programs are the better alternative to manual filing, as they allow you to file your taxes yourself, but without all the technical delays. These programs will guide you on the tax preparation process, teaching you about tax forms and how to make the most of your tax returns.

Tax preparation software is often paid, but there are also multiple free options out there. Most tax professionals find the extra cost as a good investment, as they receive customer support and get better tax returns.

Tax Preparers or Tax Preparation Services

For those who really have no clue how to do their taxes or simply do not have the time to handle things, a tax preparer or tax preparation software is typically the way to go.

A tax preparer will understand all the tax jargon, will know the tax law, and will often use tax software as a backup. Very often, they will mix their knowledge with the efficiency of a tax program, to ensure they get the most accurate results.

How to Choose The Best Professional Tax Software Programs

There are many tax software options out there - so many, that choosing the best one for your needs may be rather intimidating. What you need to know is that while every tax preparation software is useful on its own, it may not be the best tax helper for your needs.

The professional tax software that works like a charm for one company may not be as efficient for other companies. So, you need to keep several factors in mind, such as:

Budget

Tax preparation software can be very expensive. While Premium plans may offer a variety of benefits, it might not be such a good option if you are working on a low budget as it is. Make a list of features that you need and see whether there is any free tax software out there that can offer this at a low price (or even free of charge).

Platform

Do you want to use a dedicated desktop program, or do you want to use a cloud-based software instead? Think about the circumstances in which you are using the tax software. If you are traveling a lot or if you need to switch between computers to do taxes, then you will benefit more from using cloud versions.

State Tax Returns

When you are using professional tax software, do you need a state tax return as well? If you do, then you might want to pay close attention to the plan that you are getting. Some types of online tax software may charge extra for you to access a state tax form.

Customer Support

Do you have your way with technology, or do you frequently have moments when you get stuck with the technicalities?

If the latter is your case, then the best tax software for you should have a well-set customer support system. You might want to look for those that offer chat-based support, as it is usually faster and much more convenient for those who aren't exactly tech-savvy.

How to Prepare for the Upcoming Tax Season

January 24 was the starting point for paying taxes - so from that point on, you can file anytime you want. Bear in mind that quarterly taxes must be filed by specific deadlines, so make sure that you handle your tax business until then.

No matter if you are working for tax professionals or you are a tax professional yourself, here is how you can handle the tax preparation process. While most tax programs will have their own system that you'll want to check, here are the general steps that you can take:

Review Previous Tax Returns

Most tax professionals will use the tax returns from the previous year as a starting point. This should give you a better idea of the tax deductions that you are eligible for, along with the tax forms that you will need in order to make the most of your taxes.

Save the Receipts

Even if you are using the best tax software, you might not be able to do much unless you save and categorize the receipts. Whether you are doing your own taxes or offering your professional services to someone else, you need a clear image of what each receipt is for.

Download Tax Forms

You may wait for the tax forms to arrive in your mailbox, but you can also download them free of charge from the concerned financial institution. The best tax software will usually have a comprehensive tax form library for you to download the forms, giving you specific recommendations on what you need.

Top Tax Software to Consider

There are many tax preparation programs that a tax professional may use. We'll review the most popular options. First, we will review the software program we know best--our own.

Bonsai

Bonsai Tax is the best tax software to manage your individual and business returns, especially if you are a professional freelancer. The app helps you estimate your tax payments, sends you filing reminders, and can scan your bank/credit card statements to discover potential tax write-offs. Users typically save $5,600 from their tax bill.

It offers a variety of tools that tax preparers may use, including:

  • Invoicing
  • Reporting
  • Project Management
  • Contracts
  • Time Tracking
  • Task Tracking
  • Proposals
  • Accounting and Taxes
  • Expense Tracking

Bonsai features two pricing plans: the Workflow Plan that you can get for $19 per month, and the Workflow Plus that you may get for $29 per month. The Plus plan has certain extra features that the standard plan may not have.

For instance, while the Workflow Plan does include customer support, the Workflow Plus has priority support. This is a great option for professionals who have just started their business. Useful features such as automation or subcontracting have also been provided.

Bonsai is very easy to use as well, from the moment the user signs up for the services. The interface is very clean, and navigating through the features is highly intuitive - no matter if you have experience with using professional tax software or not.

The customer support is highly responsive, with users being able to contact the staff through various means. You have email and live chat, both of which are quick to respond.

For tax preparers that are still getting used to filing tax returns, various educational and research options are made available. You have a knowledge base, a company blog, as well as videos and tutorials to learn from. The company is also active on social media, where users may find relevant content and prepare for the tax season.

Bonsai is a very accurate professional tax software, offering very solid features that both beginners and highly-trained professionals may use. It's an easy way to file for tax returns, without going through various hoops and crossroads.

The majority of users save $5,600 from their tax bill with our software. Claim your 14-day free trial today.

Credit Karma Tax (Cash App)

Many people find it odd when they see Credit Karma listed as a program for tax preparation, as most people associate it with credit scores. That being said, Credit Karma has a very useful software called Cash App Taxes. All you have to do is download the mobile app and you will obtain access to the following features:

  • In-app alerts
  • Secure platform
  • Federal and state tax filing
  • High-yield savings
  • Fast refunds
  • Tax calculator
  • Maximum refund guarantee

What makes Credit Karma Tax so popular is the fact that it is affordable. The majority of the features are free of charge, and there aren't any hidden restrictions and fees - no matter what credits and deductions you get.

Credit Karma is very accurate when it comes to filing taxes. It double-checks everything you place as a return before you submit it, leaving no place for error.

The app is also very fast and efficient. Receiving and refunding usually go in or out of your account two days earlier than usual, making it very convenient for those who need to get a quick hand on their tax returns.

The tax calculator is also a very useful addition, and you may use it before you even download the app for filing. This will allow you to make an accurate estimation of your tax returns.

Credit Karma Tax offers a maximum refund guarantee, as long as you are entitled to it. You can reimburse sums up to $100 for amended tax refunds, regardless of their type.

Overall, Credit Karma Tax is a good option for those who have strict income limits. It can help you with anything from estate tax returns to federal tax returns and all types of tax liability. Available in 40 states, it's a good option for those who are looking for something simple to use.

E-File

If you are looking for something that is both affordable and efficient, then you may want to give E-file a try. This software allows your e-filing to take less than 15 minutes, saving you time - and saving you money as well. Here are the features that you may enjoy with this program:

  • Helpful library for references
  • Low-priced guarantees
  • Tax calculators
  • Tax return storage
  • State and federal filing
  • Expense tracking
  • Tax tracking and reminder

E-file is more or less a DIY tax software that connects you to various financial institutions, but at the same time allows you to take a good look at your taxes. If you are the kind of person who likes to adjust taxes or file them yourself, then E-file can give you the means while allowing you to hang onto the reins.

The interface is rudimentary, yet very straightforward. As a beginner, you will have no issues navigating it. It covers pretty much every tax situation that the most popular options do, such as Bonsai or TurboTax.

In terms of prices, E-file is quite advantageous. You may go for the free of charge version, but you can also pay up to $49.95 for a tier account. If you are looking for unlimited state returns, you'll have to pay an extra $28. Despite that, the prices are still very good, in comparison to other similar programs.

TaxAct

For those with small accounting firms or who calculate individual and business returns, TaxAct is a great option to try. It's robust, while coming at an affordable price and with various platforms to use. Here are the features that you might find useful in TaxAct:

  • Unlimited tax returns
  • Mobile app
  • Online data backup
  • Virtual practice capability
  • Dedicated support
  • Reports and tools
  • Money-back guarantee

The prices for this tax prep software might seem high. However, considering the fact that you have no limit on the income tax return, the final price is quite fair.

You will pay between $150 and $1,325 depending on whether you want the Professional Federal Edition, the 1040 bundle and the Unlimited plan (for business returns and income tax returns).

This online software also features a mobile app that you may use. This allows you to do your e-filing and get your personal or business returns wherever you may be - without you having to open your computer. The mobile app is very easy to use and intuitive, with a simple interface that saves a lot of time during tax preparation.

The technical support is also very helpful. You may contact the team via email or phone if you need personal support. However, if you do not want to talk to them, there is also a highly comprehensive knowledge base that you may use, along with a page where you may troubleshoot your issues.

The money-back guarantee is also highly convenient. Not only does it give peace of mind to the client, but it's also great in the event you realize it's not the program for you.

Thanks to the automation feature, TaxAct allows you to give professional tax preparation advice to your clients. It gives you tax planning suggestions that you or your clients may follow when doing your taxes.

TurboTax

If you are an investor, then you might find it convenient to use TurboTax. This professional tax software is perfect for tax preparers who need multiple features within their reach. These features include, but are not limited to:

  • Maximized refund
  • Robust customer services
  • Secured Cloud services
  • Teaching and research tools
  • Deduction finder
  • Tracking audit risks
  • Comprehensive tax form library

TurboTax plans have various convenient features, but the plans are also quite expensive. The cheapest plan (Deluxe) costs $60 per month, the middle tier (Premier) costs $90, and the most expensive plan (Self-Employed) is $120.

Plus, depending on the features that you will need, you will have to pay extra. State services charge an extra $50, and other paid features may be quite costly as well. There is also a free plan with TurboTax, but for the most part, it is only useful for those who do not require a big feature pool.

With that in mind, TurboTax is very easy to use, and investment documents are very easy to import. The Deluxe plan helps you maximize your tax deductions and credits, whereas Premier helps you with your investments (stocks, cryptos, bonds, property, etc.).

If you don't itemize deductions and don't receive Social Security benefits or W-2 income, then TurboTax is the right tool for you. People on active duty in the military will receive certain benefits, getting free access to paid plans. All you have to do is to go to their portal and enter your rank.

Overall, the program may be quite expensive - but for tax prepares tracking investment expenses along with their tax return, this tool may be useful.

H&R Block

If you are looking for something that is similar to TurboTax in terms of features but not as expensive, then H&R Block might turn out to be a good alternative. Depending on the plan that you go for, you may receive some or all of the following features:

  • Free online filing
  • Multiple W-2s
  • Simple importing
  • Multiple income types
  • Education interest deductions
  • Expat tax tool system
  • Full access to documents
  • Support with professional tax preparers

H&R Block is a good option for those who are professionals but are still at the beginning of their career. The filing program is very easy to use, and it can help you get matters done in a timely and organized manner.

H&R Block has a specific target: people who have an open Health Savings Account. H&R helps clients maximize credits and deductions for those who are filing. However, the services are only available if a paid tier is used; the free version is not available in these circumstances.

H&R Block provides free federal income tax, along with state tax returns, supporting multiple forms that you may need during your tax preparation process.

The help center is highly responsive, and is very efficient when it comes to offering you accurate information. This makes H&R Block a good option for people who are filing for the first time. It's easy to use and affordable, making it a good option for small and mid-sized companies.

TaxSlayer

Whether you have a bigger or a smaller firm, Tax Slayer can help you "slay" your taxes. The preparer comes in professional and commercial products that can help you cover your whole business.

Tax Slayer comes with multiple features that professional tax planners should be able to enjoy, including:

  • Tax return
  • Reports
  • Client status
  • Depreciation module
  • Return viewing
  • Unlimited E-filing
  • Mobile app
  • Web option
  • Updates

TaxSlayer features multiple plans that you can go for: Classic, Premium, and Web. The pricing depends on the plan that you get, from $1,195 to $1,795. The Classic version is the lowest priced option, whereas Web is the most expensive. If you get a corporate plan, it can also add to the final price.

You are also given the option of a demo, where you may try the features of the program for free. This allows you to determine whether Tax Slayer is the right choice for you or not.

Tax Slayer offers unlimited business returns - meaning that you may file as many times for tax returns as you need. There aren't any charges per return either, which means that despite the high price tag, you may actually save money in the long run.

The tax preparation program is a cloud-based software that is also compatible with iOS. You may connect it across multiple devices, as long as you have a secure Wi-Fi connection.

The mobile app allows you to do your tax planning en-route, even without the use of a personal computer. This makes it easier for you to reach or help your clients, no matter where you are working from. It also allows you to do your own taxes in an efficient manner, even if you are constantly traveling.

If you are active in the military, then Tax Slayer provides free filing of your federal taxes, no matter what your income type may be. However, you are still required to pay state taxes, which will cost $39, regardless of the state. If you are filing for multiple states, you will have to pay a separate fee for each state.

The app is designed for tax professionals, meaning that it is not recommended for personal tax returns. While as a tax professional you may put in your own taxes, the price and features are typically not worth it if you are filing for one person only.

Finally, the customer support is also highly responsive. You receive live chat assistance from other tax professionals, as well as reminders for tax payments. This ensures that no errors or extra payments are made due to a forgotten payment.

Drake Tax

Tax preparers looking for the best professional tax software at a lower price should pay a close eye to Drake Tax. The company has been in business since 1977, which means that the creators of the program had quite a bit of experience when designing the features. Here is what tax preparers may get:

  • Look-Back feature
  • Double-Check Diagnostics tool
  • SecureFilePro
  • Hardware add-ons
  • MultiState returns
  • Data Import
  • E-filing
  • Planning and reviewing tools

Compared to other professional tax software options, Drake Tax is very easy to use - the most preferred feature being the automated data import.  

Drake Tax also has some great e-filing features in the form of SecureFilePro. This dedicated paperless feature allows you to obtain the documents needed for tax preparation. It allows you to get forms from your clients, tax research applications and facilitates easy electronic e-signature components.

The tax planner provided by Drake Tax is also quite efficient. You can compare your data from your previous tax year, giving you a better idea of what your future tax years might look like.

The information for amortization can be found on the Drake Tax user dashboard, and you may also find amortization scheduling in its functions.

Drake Tax comes with built-in features that make oversights less likely to happen. If you make a mistake caused by an oversight, it can lead to the IRS rejecting your request for a tax return.

Drake Tax is very popular among small and mid-sized CPA companies, as it features all the relevant forms that a tax professional might need. Both the simple and more complicated filers are supported, making tax preparation a much easier task to deal with.

With Drake Tax, you may choose between two platforms. If you have your own personal computer that you constantly use for tax planning, then you may use the desktop version.

Drake Tax's diagnostic tool is also very efficient at tracking any changes that may affect your data entry - and consequently, your business tax returns. If Drake notices any problems, then they will automatically flag them so that they may be reviewed. This way, you will not be making any extra tax payments as a result of a mistake.

On the other hand, if you are traveling a lot or use multiple computers, then you can go for the web-hosted version instead. The data is stored in Cloud, which means that you may easily shift from one device to another.

Prices differ based on whether you use a desktop version or the Cloud version. The Cloud-based software costs $99 per month, and it is very useful for individual and business returns.

On the other hand, the desktop version can cost between $330 and $1,695 per month, depending on the features that you require. It is believed to be among the best professional tax software programs for those who have more complex tax circumstances.

FAQ on Tax Preparation Software Programs

Tax preparation can often yield many questions. To make matters easier for you, here are the most common questions, along with their answers.

What Tax Software Do Small CPA Firms Use?

Bonsai is popular among small CPA companies, as it comes with proposals, invoices, and contract features. It is a good expense tracker for those who are just starting up their company. Drake Tax is also very popular as a tax planner, especially among small and mid-sized accounting firms.

What Is the Most Accurate Tax Software?

People looking for accuracy very often turn to TaxAct, but all the tax preparation software programs on our list are highly accurate. TaxAct is good for tax preparers who are willing to pay the extra dollar, but if you are looking for affordability and ease of use, then Bonsai and TaxSlayer are the best runner-ups.

What Software Do Tax Consultants Use?

Most consultants use TurboTax in their tax preparation efforts, but Bonsai and H&R Block are also superior runner-ups. It mainly depends on how much you are willing to spend on fees. Tax consultants looking for lower fees might benefit more from using Bonsai.

What Is the Most Popular Tax Software?

This mostly depends on what you are looking for. If you prioritize ease of use, accuracy, and low costs, then Bonsai is a good option for most tax preparers. Credit Karma Tax (Cash App Tax) is also a great alternative.

Is Free Tax Preparation Software Really Free to Use?

In many cases, many tax preparation software programs that label their service as "free" will provide a wide range of services that you may use without paying a dime. Still, most of these programs will also have a Premium version that you may opt for, where you will have to pay to solve the more complex tax situations.

How Long Does It Take to Get a Tax Return?

Depending on the tax software companies that you use, the tax filing process may take 3 weeks or less. By choosing direct deposit as a refund method, the tax refund should enter your account within one month.

However, if you choose to have your tax refund delivered in the mail, then you may expect it to take anything between 6-9 weeks. Mainly, it depends on what professional tax preparation software you use and how quickly it processes the orders.

Final Thoughts: What Should You Use?

In the end, the tax software you use will depend on your needs and the features that you require. Most people seem to lean towards Bonsai, TurboTax, and H&R Block. However, each program we mentioned above has great use and potential, depending on what you are looking for. If you want to give Bonsai Tax a try, claim your 14-day free trial here.

Tom Smery
Tom Smery is a certified CPA for over a decade. In his free time, he writes articles to pass on his expert knowledge on taxes and accounting. Thomas has a wide range of deep knowledge on 1099 taxes, and finance topics. You can find him fishing when he is not preparing taxes for his clients or writing about accounting.

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