Five tips for selecting the best software partner for your tax advising practice

by TaxJar November 1, 2023

Please note: This blog was originally published in 2020. It’s since been updated for accuracy and comprehensiveness.

As a tax advisor, you’re likely already very familiar with the landmark Supreme Court ruling that shifted the landscape of sales tax in the US, South Dakota vs. Wayfair, If you have clients in the e-commerce space, this likely made the task of managing your clients’ state and local sales tax much more complicated. There are complex requirements regarding what constitutes economic nexus in each state as well as nuanced guidelines for how specific goods and services should be taxed. This all requires you to conduct a lot of state-by-state research. Not to mention the processes and procedures of actually filing returns in each of those states. Partnering with the right technology partner can help you automate these tasks so you can spend less time managing sales tax and more time focused on growing your tax advising practice.

Now that you’ve decided a technology partner would be beneficial for your practice, what should you be looking for in a tax automation solution/partner? Here are five key features and services we believe you should focus on.

Easy client management – Many of the accountants we work with today already have numerous clients in the eCommerce space or are looking to grow their client base in this area in the near future. The ability to manage those clients’ calculations, reporting and filing from a central dashboard is incredibly important. You will want to maintain administrative access on your clients’ accounts so you can easily access whatever information you need. Additionally, as you set up client accounts, ensure the setup can be completed with just a few clicks of a button.
Nexus determination – When you look for a technology solution, be sure to find one that can help you determine where your clients have economic nexus, as well as alert you as your clients are approaching economic nexus thresholds in each state. These alerts will allow you to stay ahead of registering your clients to collect sales tax in new states so they are always in compliance.
Sales tax calculations – It’s important to ensure the calculation of sales tax is accurate when the transaction is happening. Look for a partner that can accurately calculate tax on transactions in real time and is looking past the local jurisdictions and ZIP codes to provide rooftop-level calculations for your clients.
Reporting – After you’ve ensured your clients’ sales tax is being calculated correctly, you will want to make sure the reports from your technology partner are easy-to-read. You will need to have a breakdown of state and local jurisdictions when you start to file. Also, double check that you can export your clients’ reports and have access to detailed audit trails.
Automated filing – Having easy-to-read reports is critical, but it may also be beneficial to work with a partner who can accurately and automatically file state submissions and payments on behalf of your clients. Filing taxes can take a lot of time so you will likely want to find a partner who can automate these tasks for you. Automating filing means more time for you to focus on the strategic needs of your business.

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