Guides
3 things to check in tax preparation software
Three things to check in tax preparation software decide a purchase: return coverage, e-file and state handling, and the real cost of switching your practice.
What to take away
- Check one is return coverage in your tax preparation software: the forms your client mix files, including the states and entity types.
- Check two is e-file and state handlingIRS e-file support and the state mandates your clients fall under.
- Check three is total cost of switchingconversion, training, per-return fees and the season you lose learning a new system.
- A demo that runs your own hardest return tells you more than any feature grid.
- Confirm current forms, deadlines and e-file rules with the IRS or your state tax authority before you commit.
This article covers software selection for a tax practice. It is not tax, legal or credential advice. Requirements vary by tax year, return type, jurisdiction and credential, so verify current IRS and state guidance or ask a licensed CPA or enrolled agent.
Check one: return coverage
Return coverage means the forms your client mix actually files, not the vendor's full form list. Pull last season's returns and count the outliers. Look for multi-state filers, S corporations, partnerships, trusts and foreign income. Rental schedules count too.
Return coverage checklist
- Count last season's return outliers
- Multi-state filers
- S corporations and partnerships
- Trusts and foreign income
- Rental schedules
- Open a live return per category
If ten clients file in two states, multi-state support is a requirement rather than a preference. Drake Tax bundles individual and business returns in one annual package, which suits a high-volume 1040 shop.
UltraTax CS and Lacerte sell entity and state modules in tiers. A partnership-heavy book costs more than a 1040-only book on the same license, so ask which module covers each return type you file.
Ask the vendor to open a live return in each of those categories during the demo. A form that sits in the library but produces a return your reviewer rebuilds by hand is not coverage.
Check two: e-file and state handling
E-file support is the second check because a gap here stops the return rather than slowing it. Confirm the software handles IRS e-file for the return types you file, and check the state e-file mandates that apply to your clients.
E-file rejection path
- Confirm IRS e-file for your return types
- Check state e-file mandates
- Track federal, state, city dates
- Federal accepted, state rejected
- Ask who takes that call in April
California and Illinois require e-file for most paid preparers, and those thresholds change, so confirm the current rule with each state authority. New York City adds a second layer: federal, New York State and New York City deadlines do not always land on the same day.
Test whether the software tracks all three dates for a client who files in the city. Ask what happens when a state e-file is rejected after the federal return was accepted, and who on the vendor's support line takes that call in April.
Check three: total cost of switching
The sticker price is the smallest number in this check. Add conversion of prior-year data, training hours, lost billable time during the first season, and per-return or per-state fees that appear only at checkout.
Switching cost figures
- $400-$1,200ProSeries season
- $2,000+Lacerte tiers
- $30-$60ProConnect federal 1040 plus state
- $50-$110TaxDome per user per month
List prices shift by package and by year, so treat these figures as typical ranges and confirm them with each vendor. ProSeries commonly runs about $400 to $1,200 for a season, or per-return fees near $20 to $40. Lacerte tiers typically start around $2,000 and climb with entity and state modules.
ProConnect Tax bills per return, often $30 to $60 for a federal 1040 plus a state. UltraTax CS and CCH Axcess Tax are annual subscriptions that commonly land in the low thousands for multi-state, multi-entity firms. TaxDome and Canopy charge per user, typically $50 to $110 per user per month.
Training often gets left out of the estimate. Forty hours of onboarding at $150 an hour is $6,000 in billable time before the software earns anything back. Count the returns you expect to lose to a slow first season, then compare that total against staying put.
What the named products are for
These are real products in the market. Confirm current pricing and capabilities directly, since vendors change both.
| Product | Built for | Typical pricing (confirm with vendor) |
|---|---|---|
| Drake Tax | High-volume individual and business returns, price-sensitive practices | Annual license by package, often a few hundred dollars a season |
| Lacerte | Established firms needing depth across entity types | Annual license, tiered, commonly $2,000 and up |
| ProSeries | Solo preparers and small firms already in the Intuit ecosystem | Annual license or per-return, roughly $400 to $1,200 a season |
| ProConnect Tax | Firms that want cloud access and Intuit integration | Per-return, typically $30 to $60 for a federal 1040 plus state |
| UltraTax CS | Firms with complex multi-state and entity work | Annual license, modular, often in the low thousands |
| CCH Axcess Tax | Larger firms wanting tax, workflow and document tools together | Annual subscription, modular, often in the low thousands |
| TaxSlayer Pro | Small and mid-size firms watching cost per return | Annual license or per-return, entry packages typically under $1,500 |
| TaxDome | Practice management with tax workflow, not a return engine | Per-user subscription, typically $50 to $110 per user per month |
| Canopy | Practice management and client portal | Per-user subscription, typically $45 to $100 per user per month |
TaxDome and Canopy manage the practice; they do not prepare the return. Many firms run one of each.
Match the tool to the check that hurts most. A multi-state, multi-entity book points to UltraTax CS or Lacerte. A price-sensitive 1040 shop is better served by Drake Tax or TaxSlayer Pro.
Run your own return in the demo
Bring your hardest return from last season, stripped of client identifiers, and ask the vendor to walk it through. Watch how the software handles a state carryforward, an amended return and a rejected e-file. The rejection workflow matters most: a return that bounces at 11 p.m. on deadline day needs a clear path back to filing.
For the security side of the evaluation, the NIST small business quick-start guides and CISA guidance for small businesses give checkable starting points on data protection. The IRS recordkeeping guidance covers what client records you must retain and for how long.
Common questions
Does the cheapest license win?
Rarely. A low license fee with per-return charges can cost more than a flat annual license once you pass a few hundred returns. At $30 a return, 400 returns is $12,000, above most unlimited annual packages. Price both against your actual volume.
Can I run two systems in one season?
Some firms keep the old software for complex returns during the first year. It works, but you pay two licenses and your staff splits attention. Decide the cutoff date for retiring the old system before the season starts.
How long does a switch take?
Plan on conversion and training before the season, not during it. A first season on new software runs slower, so budget for fewer returns or longer hours.
Track that cost against the savings you expect. For a fuller picture of the tax preparation tech stack and performance metrics for 2027, including how to measure whether the switch paid off, review the benchmarks before your next renewal.
