Each year, nearly 1 in 4 small businesses say tax season is the most stressful time on their calendar. But it doesn’t have to be. Tax season can be a burden for many businesses. Whether you’re a medium-sized business with tax credits to claim and a complex return or a small business with just a few employees, you need to file taxes every year to remain compliant with state and federal regulations. Businesses often lean on technology to streamline business processes, and professional tax preparation software can be a valuable resource for business owners looking to improve efficiency during the busy tax season.
As your business grows and faces increasing complexity in tax filing, tax preparation software can ensure accuracy, efficiency, and compliance. Learn how to identify the best professional tax preparation software for your needs and streamline the tax filing process.
Business Tax Preparation: Where To Start
Whether it’s your first time filing as a business or you’ve been through the process before, it’s important to come at tax season with a fresh start. Tax regulations and your business status could have changed throughout the year to make this year’s return a bit different than last year. To get started:
- Know the types of small business taxes you owe: Depending on your business entity and how your business is structured, you may owe income taxes, estimated taxes, excise taxes, self-employment taxes, sales taxes, or employment taxes.
- Know what forms to file: Different businesses may have to file different forms based on their activities during the year.
- Gather the necessary documentation: To file your taxes, you’ll need basic identifying information like an Employer Identification Number (EIN), as well as income and expense documentation and evidence of any applicable deductions or already-paid taxes.
- Identify credits and deductions: There are many tax credits and deductions available to businesses. Professional tax software can help you find ones your business may be eligible for.
Streamline Tax Season: Why Use Professional Tax Software?
Filing your business returns requires organization, patience, and precision. Making a mistake could cost your business money, result in penalties, or expose you to an IRS audit. Using a professional tax preparer’s software saves you time and money by guiding you through a digital tax workflow that ensures you meet all relevant regulations and identifies opportunities for credits and deductions. Streamlining your tax return processing helps you avoid costly mistakes that can put a dent in your small business cash flow.
Key Features of Professional Tax Preparation Software
Business tax preparation software offers many of the same benefits you’d get from software used for filing individual income tax returns. Tax returns can be complicated, and time spent sorting through forms and performing income calculations manually is time you could be running your business. Professional tax tools simplify the filing process, reduce errors, and save time.
These are some of the key basic and advanced features that an online professional tax preparation software provides.
Data Security
Your business tax return involves sensitive information about your company and employees. The best professional tax preparation software maintains rigorous security standards to keep your financial information secure as you prepare your taxes, submit the return to the IRS, and receive a refund, if applicable.
Accurate Returns
Taxes are complex. There are many places where you could accidentally input the wrong number or inaccurately claim a deduction — especially if you’re filling out a paper return. Since professional tax software is programmed to guide you through a tax workflow, it provides alerts when it detects inconsistencies. Some of the best programs can even allow you to run “what if” scenarios that allow you to analyze tax outcomes depending on different business activities.
When you work with a tax preparation business, you get access to professional software that offers safeguards like real-time return diagnostics and visual tax refund indicators to help you audit the numbers as you go.
Fast Preparation
Business tax software makes filing your state and federal returns much faster. With professional tax software, you don’t have to manually enter information over and over. It automates important functions, making it easy to power through simple returns quickly and simplify more complex returns. Professional software performs calculations more quickly, offers secure e-signature options, and timely e-file status alerts to get you through your return quickly and keep you apprised of its status.
Integrated Solutions
Business accounting is difficult, but meticulous bookkeeping is essential to filing accurate tax returns. Many businesses utilize accounting software, payment processing tools, and other technology to keep their books in order. A good tax preparation software can seamlessly integrate with your books and simplify all of your reporting needs.
What Should You Look for in Business Tax Software?
With quite a few professional tax preparation software options on the market, how can you choose the best one? Finding the right one for your business requires weighing the following factors:
- Compliance and regulatory considerations: Confirm that your preferred tax software actually supports the forms you need to submit, especially in highly regulated industries like healthcare, finance, and manufacturing.
- Cost: Every software has a cost, but affordable professional tax preparation software exists. Small businesses with simpler returns can likely save on tax software.
- Customer service: Testimonials from previous customers should inform your research. You want software that’s user-friendly and, when things aren’t going as smoothly as you’d like, has reachable customer service representatives who can guide you through any issues.
- Accessibility: Whether it’s a cloud-based or desktop service, you need tax software that’s easy for your tax preparer to access, even if they’re not in-house.
Feature | |||||
Best For | Traditional tax firms | QuickBooks users | Budget-conscious businesses | Budget-conscious businesses | Large or complex firms |
Ease of Use | Moderate | Easy | Moderate | Easy | Moderate |
Cloud Access | No | Yes | Yes | Yes | Yes |
Supports all Business Types | Yes | Yes | Yes | Yes | Yes |
E-File Ready | Yes | Yes | Yes | Yes | Yes |
Error and Checks Alerts | Yes | Yes | Yes | Yes | Advanced |
Integrates with Bookkeeping | Limited | Quickbooks | Multiple | Xero | Accounting CS |
Price Range | $$ | $$$ | $ | $$ | $$$$ |
How altbanq Supports Your Tax Preparation Business
Using professional tax preparation software is one of those small business tips that can pay dividends for years to come. These software packages can help your business avoid costly tax filing penalties and make it easy to report your income and claim tax credits.
With altbanq payments, you can save a significant amount of time by accurately recording and reporting your business transactions throughout the year. Through more detailed, accurate payment processing, you’ll have your income data organized and easily accessible to accurately report sales tax and other taxes your business paid, which simplifies tax season and protects your business from regulatory violations.
Get started today with altbanq payments for your business and discover the convenience of secure payment processing all year round — not just at tax time.
FAQs: Your Questions Answered
Does tax preparation software need to be approved by the IRS?
Any professional tax preparation software that offers electronic filing must be approved by the IRS. Software vendors may only market their tax preparation software as approved for electronic filing after receiving an approval form from the IRS.
What is a benefit of using tax filing software to file your taxes?
There are several benefits to using tax filing software, including more accurate reporting, more efficient filing, and error reduction when filing your taxes.
How can tax preparation software help prepare and file your taxes?
A professional tax preparation software provides a digital tax workflow that lets you fill out your return by answering questions about your business rather than just showing you forms and expecting you to put in numbers. It can perform calculations automatically in real time and prevent errors by checking your return before filing.
What are the advantages of using tax preparation software instead of paper returns?
Using tax preparation software gives you more context and information to understand how to fill out tax forms. Digital returns are also easier to update when you have to make changes. Moreover, the software can digitally audit your return for mistakes before you file and inform you about potential credits or deductions.