Tax Management Software

What is tax management software?

Tax management software helps individuals and businesses organize, track, calculate, and file their taxes efficiently. It automates the process of filling out forms by pulling information from financial records to reduce errors in tax filing. These platforms can handle various types of taxes such as sales tax, corporate tax or individual income tax.

Tax management software is designed to help reduce errors often associated with manual calculations and save time. Additionally, this software ensures compliance with changing government regulations regarding taxation, avoiding penalties due to non-compliance or late submissions.

What are the core features of tax management software?

• Tax compliance: Ensure compliance with tax laws and regulations by accurately calculating tax based on the latest local and national regulations. The software should update automatically to reflect changes in legislation, minimizing errors and penalties for non-compliance.

• Audit trail: Record a chronological sequence of activities in the tax management process to ensure transparency and compliance. An audit trail helps users track changes, identify unauthorized activity or errors, and access historical records to verify the accuracy of financial reports and adhere to regulations.

• Tax calculation: Calculate the exact amount of tax to be paid based on income, expenses, and deductions, applying all relevant tax codes accurately for optimal results. Tax management systems also generally keep track of any changes in tax laws or rates, ensuring compliance with legal requirements at all times.

What are the benefits of using tax management software?

• Simplifies complex tax calculations: Tax management software takes into account varying rates, international regulations, and other factors to provide accurate tax calculations. The software eliminates potential human error in manual computations and ensures compliance with ever-changing tax laws. This saves time for businesses while reducing the risk of non-compliance penalties.

• Saves time on data entry: The software automates data entry process, reducing manual work. It allows users to import financial data directly from bank statements or integrated financial software. This not only speeds up the tax preparation process but also minimizes human errors that can occur with traditional manual methods of input.

• Ensures regulatory compliance: Tax management software automates the process of applying up-to-date tax rules and rates. It helps businesses avoid penalties associated with non-compliance, such as fines or legal action. The software is regularly updated to reflect changes in legislation, ensuring users are always compliant with current regulations.

What are the potential issues with tax management software?

• Data security breaches: Data security breaches are a potential issue with tax management software. These platforms handle sensitive personal and financial information, which, if compromised, could lead to identity theft or fraudulent activities. Users may lose trust in the service provider's ability to manage their data securely, causing a significant impact on both user experience and business reputation.

• Software compatibility issues: If the tax management software doesn't integrate well with other systems that a business uses, it can cause significant disruption and inefficiency in operations. This could lead to errors during data transfer or even loss of important financial information, negatively impacting tax computations.

• Complex user interface: A complex user interface (UI) could make it difficult for users to navigate and utilize the features of tax management software effectively, leading to errors or inefficiency. A complicated UI can also increase time spent learning how to use the tool rather than completing tasks efficiently.

How much does tax management software cost?

Most tax management software products are priced on a “per user per month” basis, and their entry-level pricing plan ranges from $11 to $249+*. An enterprise plan may cost more but will generally include additional features such as workforce costing and reports, cash flow, multiple currency options, or a mobile application.

*The pricing included is for the entry-level/lowest-priced offerings found on vendor websites as of June 14, 2024.

Which software tools integrate with tax management software?

Tax management systems may integrate with various solutions for data export and import. We analyzed thousands of reviews from tax management software users to identify the products reviewers most frequently mentioned as integrations with the tools they use:

• QuickBooks Online billing and invoicing software can integrate with tax management software to automatically populate sales data. This helps minimize the need for manual data entry and reduce the risk of errors. 

• Calendly is a scheduling software tool that integrates with tax management software to allow clients to book appointments for tax consultations. This eliminates the need for phone calls and emails to confirm availability. This integration also sends automated reminders to both clients and tax professionals when filling dates are nearing in order to avoid missing deadlines.

• Stripe payment processing software integrates with tax management software to accurately reflect sales data for tax calculation and reporting. This way, the tax management system can automatically calculate sales tax during online payments for eCommerce stores based on the customer’s location and product type.

• Gmail email marketing software integrates with a tax management system to allow segmenting client lists and send targeted emails with relevant information such as client name, deadline, and due amount. For example, tax professionals can send automated reminders to clients approaching deadlines, share tax tips based on their industry, or promote new services relevant to their tax situation. 

• Zapier is a workflow management tool that allows users to integrate their tax management software with other third-party tools to allow a connected flow of information, such as client documents, deadlines, and client communication. The integration provider facilitates quick access to information across teams, helping them identify bottlenecks and ensure timely completion of tax preparation and filing tasks.

*We identified these integrations mentioned most often in verified reviews of tax management software published on GetApp within the past two years. (as of June 14, 2024).

Key considerations when purchasing tax management software

• Evaluate financial data import and export capabilities: Import and export capabilities in tax management software are crucial for seamless data transfer. The tool should allow users to easily move financial information between different systems, such as accounting or payroll tools. This streamlines the process, reduces manual errors, enhances efficiency in filing taxes on time, and ensures accurate tax calculations.

• Check support for multiple tax forms and schedules: An ideal tax management system should cover all possible taxation scenarios. This should accommodate different business structures, income types, deductions, or credits. This means the software can be used by various users with diverse needs, from individuals to businesses, making it a more efficient tool for managing the taxation process.

• Assess the tool’s compliance with tax regulations: Tax management software must comply with tax regulations to ensure accurate and legal calculations. Non-compliant software can lead to errors, penalties, or audits from the taxation authorities. Thus, assessing compliance is crucial when purchasing this type of software for reliable results and peace of mind.

• Determine the tool's capabilities for tax planning: Tax planning capabilities in tax management software help businesses forecast future tax liabilities, ensure compliance with regulations, and potentially reduce payable taxes. The software should provide features such as income calculation, deduction identification, and credit tracking that help businesses make strategic decisions to effectively minimize their overall taxable amount.

Sources

Products evaluated for the pricing calculation were taken from GetApp’s tax management software directory. The pricing ranges exclude freemium versions of the products. The features highlighted were identified based on their relevance and the percentage of products in GetApp's directory that offer them. 

Disclaimer

This tax management software buyers guide was authored by GetApp's content team. We develop our guides using the author's expertise, insights from 2M+ unique user reviews, and our proprietary data science algorithms to identify trends in user sentiment, preferences, and priorities. Some text was generated with assistance from artificial intelligence tools.