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Choosing The Right Tax Software: The Top 10 Questions Everyone Should Know

Choosing The Right Tax Software: Top 10 Questions To Ask

Having worked in the tax and accounting field, I have had the pleasure of working with many tax professionals. One topic that often arises, in particular at trade shows, is tax software. You have your loyal Drake followers, your Lacerte advocates and everything in-between. Value is one term you hear a lot when you are in the Drake circle. For Lacerte, it’s a workhorse that is complete and very efficient in regards to entry style. The fact is that renewal rates in the industry are very strong and usually run in the 95% range across the board. On occasion, you will have a tax software company make a mistake or two that cost them a few points off their renewal rate but in general the rates stay very stable. The point I want to discuss today is for new preparers or preparers that have finally realized that consumer DIY software is not the right fit to run a growing business.


The most obvious place to start is with your budget or so you might think. The ‘budget’ is important but I see a lot of new preparers with lofty plans gravitating to software they will outgrow in 3-4 years, or worse yet, it is not the right fit from the start. The word ‘cheap’ comes to mind as well, opting for the lowest priced software versus purchasing what they really need to fit their business. Here are some important questions to ask when deciding on tax software:

What type of returns you will support?

Will you have multi-state returns or do you want to include states outside your own.

What about business returns or non-profit?

What is your expected traffic based on your marketing efforts?

What is your market demographic?

Will you need to offer bank products like refund transfers?

Will you hire staff and have to train them?

You get my point. There is a lot to consider when you’re hanging your shingle.


You could spend 30 mins in one program and 2 hrs. in another doing the exact same return. If you bill by the type of return, then you are losing money using the slower program. Accounting work is also another vehicle to earn income.

Does your vendor offer a good accounting program that provides integration or does your tax software integrate with another accounting program?

Is the integration easy to use or does it take less time to enter the data manually?

I have seen integration that is easy and seamless and I have seen supposed integration that would stump Stephen Hawking. 

These are some good questions to get started on choosing the right software. We'll be sharing more tips like these along the way. Comment below for any questions or comments! We'd love to discuss more of what works and what doesnt for everyone in the tax preparation business.


Topics: Tax Updates, tax professionals, Productivity, easy, tax organizations


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