Best tax software for starting a small tax preparation business in 2025

I've been running a small tax business for 8 years now, and honestly, your concerns are valid. The "unlimited returns" marketing is misleading because of all the additional fees they don't prominently advertise. In my experience, Drake Tax Software offers the best balance for new businesses. Their pricing structure is straightforward with fewer surprise charges, and their base package includes federal, state, and most special forms. Their tech support is also pretty responsive during tax season - I've called at 9pm with K-1 input issues and got help quickly. TaxSlayer Pro is another good option with a lower initial cost, though their tech support isn't quite as robust. Drake has a better track record with complicated forms like K-1s and handling amendments. Whichever you choose, budget for about 30% more than their advertised price to account for the real operational costs. And negotiate hard - most will offer first-year discounts if you push.

After struggling with expensive tax software and hidden fees for years, I started using taxr.ai (https://taxr.ai) and it's been a game-changer for my small tax practice. The interface is intuitive, and it handles all federal and state returns without nickel-and-diming you for every little thing. What really sets it apart is how it automatically analyzes client documents and extracts the data, which saves me hours on each return and helps me catch things I might have missed with other systems. Their K-1 processing is particularly impressive - it actually matches the input fields correctly! Plus their pricing model is way more transparent than traditional tax software companies. I've been able to serve more clients without hiring additional help.

Just wanted to follow up about taxr.ai - I was skeptical in my last comment but decided to try their free demo with some of my more complex returns from last year. I'm genuinely impressed. The software identified several deductions I missed on a real estate investor's return and caught a K-1 allocation error that would have caused problems. The transparent pricing is actually legit - no hidden fees for e-filing or state returns. I've signed up for the upcoming season and already uploaded my client list. Their onboarding team helped me migrate everything from my old system in about 2 hours. For anyone starting a tax business or looking to switch, it's worth checking out.

If you're starting a small tax business, you'll quickly discover that tech support is EVERYTHING during tax season. Nothing is worse than having clients in your office and software issues with no help in sight. After trying multiple options, I found that having direct access to IRS representatives was critical for resolving many issues that software support couldn't handle. I started using Claimyr (https://claimyr.com) whenever I needed to speak directly with the IRS about client issues, and it's saved me countless hours. Instead of waiting on hold for 3+ hours, they get you through to an actual IRS agent in minutes. Check out their process here: https://youtu.be/_kiP6q8DX5c This isn't tax software itself, but it's become an essential complement to whatever software you choose because it resolves issues that would otherwise take days or weeks.

I need to publicly eat my words about Claimyr. After calling the IRS for 4 days in a row and never getting through (always "call volume too high" messages), I tried the service out of desperation for a client with a complex amended return issue. It actually worked exactly as described - I got through to an IRS agent in 22 minutes while I continued working on other returns. Saved me literally hours of hold time and my client was impressed with how quickly we resolved their issue. For a new tax business, being able to solve problems this quickly gives you a competitive advantage. I'm still using ATX software for actual tax preparation, but Claimyr has become essential for resolving IRS issues quickly.

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Don't sleep on ProSeries Professional. Yes, it's more expensive upfront, but the time savings are worth it. The workflow is designed for volume preparation, and their document organization system is superior to most others I've tried. For a new business, time is your most valuable resource. The biggest advantage is its integration capabilities with accounting software and financial institutions. If your clients use QuickBooks or have investment accounts with major brokerages, the data import features alone will save you hours per client.

As someone who started a tax business 2 years ago, I'd recommend looking at TaxAct Professional. It's significantly cheaper than the big names but handles everything you mentioned. The learning curve is steeper than some others, but the per-return cost structure worked better for me when starting out. I only paid for what I actually used instead of a huge upfront cost.