Tax season means different things for different people. For the average American taxpayer, it means collecting all your W-2s and various simple forms before filing in the hopes of receiving a tax return. For businesses, taxes mean making sure your bookkeeping efforts throughout the year were accurate enough to avoid penalties from the IRS. For tax professionals who help everyone else correctly file their taxes, the time between mid-January and April 15 is the busiest time of year.
After conducting a thorough review, we recommend Drake Tax as the best online tax software for professionals serving small businesses. If you want to look at our methodology to understand how we chose Drake Tax or see a comprehensive list of online tax software vendors, visit our best picks page.
Why Drake Tax?
Drake Tax is a thorough, accurate and easy-to-use software application for tax professionals and preparers who cater to small and mid-market clients. Where it really shines is in its customizable reporting, which offers granular insights into every aspect of your practice's operations. Beyond its tax preparation capabilities, Drake Tax includes a module that serves as a wholesale practice management system that gives you a centralized view of the health and efficiency of your business.
Ease of Use
Like any good piece of software today, Drake Tax's interface is simple to navigate and allows tax preparers to move from one item to the next. It doesn't matter if you're a member of an accounting firm, corporation or nonprofit, the tools you need are included and are easily accessible. It has all major tax forms, allows you to prepare gift and estate taxes, offers all state returns, and includes additional applications to manage clients and document transfers.
A major useful feature of Drake Tax is its SecureFile Pro, which allows clients to electronically fill out the required paperwork and return it directly, streamlining the process and cutting out unnecessary paper copies. We also like that state returns can be prepared directly in Drake Tax without needing to purchase add-ons or additional software.
As a program designed for tax professionals, Drake Tax is packed with features to help you prepare taxes for your clients accurately and efficiently. The company offers demos, videos, a user's manual, a quick reference guide and other resources on its website to help you take advantage of all its capabilities. Here's a sampling of its features.
- Comprehensive filing: Drake Tax includes support for even the most complicated filers, though it's primarily used by firms with small and mid-market clients. It comes with all 1040 forms, all federal packages and 48 state packages (plus the District of Columbia), including forms for partnerships, S-corps, C-corps, estates, trusts, tax-exempt organizations and more.
- SecureFile Pro: This is Drake Tax's paperless tool that helps you obtain the source documents from your clients that you'll use in the tax-preparation process. This streamlines things on both ends, allowing for seamless communication between you and your clients.
- Paperless options: In addition to SecureFile Pro, Drake Tax has other tools to help you reduce the amount of paper needed to prepare and file client taxes, such as sharing information for revisions, and e-signing and e-filing documents.
- Data import: You can easily import data from QuickBooks or Microsoft Excel, which simplifies the implementation process. If you like working in spreadsheets, importing them is straightforward and easy.
- Refund estimator: Like our other best picks, Drake Tax provides a refund estimator that runs throughout the process, so you can identify issues affecting your clients' refunds and keep clients apprised of your expectations throughout the process.
- Planning tools: This software's tax-planning features help you compare taxes from year to year. It also allows you to archive old information so you easily retrieve it for your clients, whether they need it for personal reasons or in the event of an audit. Its planning tools also include an amortization schedule.
- Review tools: Mistakes and oversights happen, but Drake Tax has built-in recommendations to help you avoid them and prevent IRS rejection. Rejections are costly both in terms of productivity and reputation, so having software with this feature is reassuring.
Drake Tax has two main pricing plans for their services. For companies that have a large number of returns to file, there are unlimited tiers that have zero restrictions on the number of state and federal returns filed through the program. Smaller organizations can more cost effectively file their returns through the company's pay-per-return pricing structure.
For Drake Tax's unlimited models, you pay $1,695 for the Power Bundle, which includes Drake Tax Unlimited and Drake Accounting. Or, for $100 less, you can get Drake Tax Unlimited (Drake Accounting is sold separately for $395).
Under the pay-per-return plan, you pay an upfront cost of $395 that includes 15 returns. Each subsequent return costs $22. After 85 returns, the plan automatically converts itself to the unlimited package. If you want to include Drake Accounting with the pay-per-return plan, it costs $495.
Across the web, customer testimonials regularly sing the praises of Drake Tax's customer service. After contacting the company, posing as a tax professional considering new software, we understand why that's the case. When we called customer service, the representative we spoke with was attentive and took the time to walk us through the company's tax program.
Along with numerous online resources and help materials, Drake Tax maintains a regularly accessible technical support department. During tax season – from December 3 through April 19 – customer support is available Monday through Friday, from 8 a.m. to 10 p.m. ET, and Saturdays from 8 a.m. to 6 p.m. ET. During the off-season – from April 20 through December 1 – customer support is available Monday through Friday, from 8 a.m. to 9 p.m. ET, and Saturdays from 9 a.m. to 5 p.m. EST.
Drake Tax is not like most tax preparation software. While its layout is easy to navigate and intuitive, there are aspects that take some getting used to. It's so deep in its functions that unless you've worked with its previous iterations, you may need some time to get your bearings straight.
If you're a small business with simpler tax needs, this software just isn't for you. Drake Tax is meant for accounting and tax preparation firms, and mid-market companies handling complex tax situations.
Ready to choose online tax software? Here's a breakdown of the rest of our coverage: