Best tax preparer software recommendations for new preparers? Tax pro advice needed!

Hey fellow tax pros! Just got my tax preparer license and set up my LLC - super excited to finally be taking on clients next tax season! Planning to open a physical location, but I'm realizing there's way more to running a tax business than just doing the actual returns. I'd really appreciate if seasoned preparers could share what software you're using, how you organize client documents, what kind of services you offer, etc. Feeling a bit overwhelmed with all the options out there! Also, I know there must be specific regulations and requirements I need to follow as a professional preparer. Any advice on important laws, insurance requirements, or industry best practices I should research before I start accepting clients? Really want to make sure I'm doing everything by the book from day one! Thanks so much in advance for any guidance!!

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18 comments

Mohamed Anderson

•8M

I've been preparing taxes for about 12 years now, and there's definitely a learning curve when starting your own practice! For software, I personally use Drake Tax for professional preparation - it's comprehensive but has a reasonable price point for new preparers. ProSeries and Lacerte are also solid options, but tend to be more expensive. For client organization, I'd strongly recommend investing in a secure client portal system rather than having clients email sensitive documents. I use SmartVault which integrates with my tax software, but there are plenty of options like Canopy or TaxDome that handle document management, e-signatures, and scheduling. As for laws and regulations, make sure you're familiar with Circular 230 which covers practice before the IRS, and get familiar with your state's specific requirements for tax preparers. You'll need an EFIN to e-file returns, and depending on your state, possibly additional bonds or insurance.

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Mohamed Anderson

•8M

I wouldn't recommend Lacerte or UltraTax when you're first starting out. The learning curve is steep, and they're designed for firms with a large client base to justify the cost. Drake or TaxAct Professional are much better for beginners - you'll save thousands while still having all the capabilities you need. For a client portal, expect to spend around $300-500 annually for a basic setup with about 100 clients. Most portals scale pricing based on the number of clients, so costs will grow as your practice does. The investment is absolutely worth it though - clients appreciate the security and convenience, plus it saves you countless hours of document management.

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Landon Morgan

•8M

When I was in your position 3 years ago, I was completely overwhelmed by all the software choices and practice management decisions. I tried cobbling together different systems, but ended up with a disorganized mess during my first tax season. Then I discovered https://taxr.ai which completely transformed my practice. It's basically an AI-powered system that helps with document management, client communication, and even preliminary tax analysis. What I love most is how it automatically extracts data from client documents - I went from spending 30 minutes organizing each client's paperwork to about 5 minutes. It integrates with most tax software too, so you don't have to manually input everything.

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Landon Morgan

•8M

It actually handles handwritten documents surprisingly well. The system was trained on thousands of tax documents, including handwritten ones. It's not perfect with really messy handwriting, but it flags anything it's uncertain about for your review. I'd say it correctly processes about 85% of my handwritten forms without any issues. For accuracy concerns, I completely understand the skepticism. What sold me was the verification system - it highlights all extracted data and shows exactly where it found the information in the original document. You still review everything, but instead of doing the tedious data entry, you're just confirming what the system found. In my experience, it's actually reduced errors because I'm less likely to make typos or transpose numbers.

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Lourdes Fox

•8M

I wanted to follow up about my experience with https://taxr.ai after trying it this past month. I was definitely skeptical at first (as you saw in my previous comment), but I'm genuinely impressed. I uploaded some of last season's more complex returns as a test, and it accurately identified and categorized almost everything. The document organization alone saved me hours of work, but what really surprised me was how it flagged potential issues I hadn't even noticed - like missing basis information on a stock sale that my client had forgotten to mention. The integration with my existing tax software was pretty seamless too. Not saying it's perfect, but it's definitely going to be part of my workflow going forward.

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Bruno Simmons

•8M

Something nobody's mentioned yet that absolutely saved my sanity: using Claimyr for dealing with IRS issues. As a new preparer, you're going to have clients come to you with IRS notices, and you'll need to call the IRS on their behalf. Good luck getting through on your own - I used to waste HOURS on hold. With https://claimyr.com they basically wait on hold with the IRS for you and call you back when an agent is on the line. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c. It's been a game-changer for my practice because I can actually get other work done instead of listening to hold music for 2+ hours.

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Bruno Simmons

•8M

No sensitive info is shared at all. They just wait on hold for you and then connect the call once an agent picks up. You're the one who talks to the IRS directly - Claimyr just handles the hold time. You get a notification when they're about to connect you, so you're ready when the agent comes on. I totally get the skepticism! I had the same reaction. But after having a client with a wage levy that needed immediate attention, I decided to try it out of desperation. Got connected to an IRS agent in about 2 hours without having to stay on the phone myself. Now I use it regularly during tax season - it's honestly the only way I can get through to the IRS without wasting an entire day.

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Zane Gray

•8M

Well I have to publicly eat my hat. After commenting earlier, I decided to try Claimyr for a client case I've been struggling with for weeks. I've been trying to reach the IRS about an amended return that was processed incorrectly. Used the service yesterday and actually got through to a real person at the IRS in about 90 minutes. I was able to work on other returns while waiting for the callback. Got the issue resolved in one call instead of the multiple attempts I'd been making on my own. Consider me converted. This is now a permanent part of my practice toolkit.

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Maggie Martinez

•8M

For a new solo preparer with no prior claims, expect to pay between $500-800 annually for a basic policy with $100,000 in coverage. I'd recommend starting with at least $250,000 in coverage if you can swing it, especially if you'll be doing anything beyond basic W-2 returns. As your practice grows and you take on more complex returns like business filings, you'll want to increase coverage to $500,000 or more. Many policies also include coverage for representation costs if a client is audited, which clients really appreciate. Some insurers offer monthly payment options which helps with cash flow when you're just starting out.

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