During these unprecedented times of the ongoing COVID-19 (coronavirus) pandemic, companies in the tax software market are stepping in to help their clients with updates about tax filing deadlines and stimulus check payment updates. For instance, TurboTax— a software package for preparation of the American income tax returns, is committed to provide online CPAs (Certified Public Accountants) and EAs (Enrolled Agents) on demand to solve the queries of clients.
Companies in the tax software market are increasing awareness about new coronavirus tax relief database issued by the U.S. Internal Revenue Service (IRS). These databases are proving up-to-date information about how the pandemic is likely to affect a taxpayer’s situation. As such, several states in the U.S. have altered their tax filing deadlines for the year 2023, due to the COVID-19 fallout. Companies in the market for tax software are educating clients to follow the federal guidelines to abide with state filing deadlines.
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Personalized Services for Software Handling Help Increase Client Base
The global tax software market is projected to surpass valuation of US$ 33.6 Bn by the end of 2030. Online websites are ranking the most popular tax software based on their advantages, disadvantages, and pricing. This is helping business owners to make an informed decision with the help of comparison. For instance, the H&R Block Deluxe is being publicized for its clear navigation but has a limited virtual assistant.
Companies in the tax software market are increasing the availability of products that offer personal tax preparation services. In-office services and DIY software are highly preferred by businesses. In order to gain a competitive edge in the market landscape, companies are offering personalized services to clients where the client shares their tax documents and the tax professional prepares the return. Companies are developing software products that offer a comprehensive coverage of tax topics.
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CPA V/S Tax Software: Which is better?
Today’s available tax software is easy to use and do not require in-depth knowledge about tax preparation. However, it is potentially challenging for handling difficult monetary transactions through a software. In such cases, it becomes convenient for business owners to hire CPAs that offer them customized services. As such, cost efficiency and prompt calculations by software in complicated tax returns tend to offset its disadvantages.
In order to strike the right balance between opting for software and CPAs, companies in the tax software market are offering both products and services to gain market recognition. On the other hand, tax software are gaining popularity in India. ClearTax— a startup providing tax preparation services in Mumbai, India, is gaining market recognition for its software, which offers targeted GST (Goods & Services Tax) solutions to business owners.
Software Companies Troubleshoot Issues of Unorganized Services to Minimize Technological Gap
Cloud-subscription based software are gaining popularity in the tax software market. For instance, EZTax— an online tax preparation company headquartered in Hyderabad, India, is providing cloud subscription-based software, which is both web and mobile enabled. In order to boost their credibility credentials, companies in the tax software market are increasing efforts to bring both software and services under one roof, as it is generally a complex procedure to file income tax and GST in India.
It has been found that less than 20% of the SMEs (Small & Medium Enterprises) in India are adopting software technology for taxes. Despite resistance from clients to adopt the technology, the global market of tax software is estimated to advance at a striking CAGR of ~12% during 2023 to 2030. Since customers fall prey to unorganized services by professionals, software companies in India are troubleshooting these problems.
Cloud-based Software Help Record Real-time Adjustments in Workpapers
Multinational organizations demand access to real-time global data that provides them with opportunities, risks, and obligations in tax payments. In order to meet these demands, companies in the tax software market are offering platforms that help to gather data from structured and unstructured sources. With the aim to capitalize on revenue opportunities, companies are providing cloud-enabled platforms, such as the Microsoft Azure. As such, emerging players and startups are posing a stiff competition to established software companies in the tax software market.
Cloud-based software platforms allow scalability and flexibility for businesses. Companies are providing software that facilitate co-sourcing and compliance to industry standards. They are innovating in software that help users calculate taxes as per the right geography and right service. Cloud-based software help to record real-time adjustments in workpapers.
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Powerful Pre-built Integrations in Software Support Core Business Applications
Adding accounting services to offered software products has become a mainstream trend in the tax software market. Drake Enterprises Ltd.— a top-tier provider of professional tax preparation software is increasing efforts to build the businesses of clients and attract new customers. The growing trend of online tax filing is acting as a key driver contributing toward growth of the tax software market. Free and unlimited federal and state e-filing solutions are highly preferred by business owners in the U.S. Data and document management features are growing popular in software in order to simplify tax audit.
Automation of end-to-end indirect tax processes is a growing trend in the market for tax software. Powerful software products are being fueled with proprietary content databases that comply with several thousand jurisdictions worldwide. Companies are increasing their portfolio in offering pre-built integrations for core business applications.
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