New Accounting Firm Buyer's Guide: What to Look For
A practical guide for new accounting firms on what to look for when buying tax software, with a comparison of top options and pricing.
Starting a new accounting firm means making your first major software purchase: tax preparation software. The right choice affects your efficiency, accuracy, and client satisfaction. This guide compares the leading options in 2026, with realistic pricing and features, so you can make an informed decision.
What to Look for in Tax Software for a New Firm
Before comparing products, define your needs. Key factors include:
- Client volume: How many returns do you expect in your first year? Most new firms start with 100 to 300 returns.
- Return complexity: Will you handle individual 1040s only, or also business returns (1120, 1120-S, 1065)?
- State requirements: Do you need multi-state filing? Some software charges per state.
- E-filing: Ensure the software supports e-filing for federal and state returns, including extensions.
- Integration: Does it integrate with your accounting software (e.g., QuickBooks, Xero) and practice management tools?
- Support and training: Look for onboarding help, tutorials, and responsive customer support.
- Pricing model: Per-return pricing is common, but some offer flat annual fees. Consider your volume to estimate total cost.
Comparison of Tax Software Options (2026)
The table below compares six popular tax preparation platforms for new accounting firms. Prices are per return unless noted, and reflect current market rates.
| Software | Best For | Pricing (2026) | Key Features |
|---|---|---|---|
| Drake Tax | Small firms, high volume | $1,500-$2,200 flat annual fee (unlimited returns) | Low cost per return, robust e-filing, good support |
| UltraTax CS | Firms needing comprehensive features | $2,500-$4,000 annual subscription plus per-return fees ($20-$40/return) | Advanced workflows, integrates with Thomson Reuters suite |
| ProConnect Tax Online | Cloud-based, collaborative firms | $49-$79 per return (with volume discounts) | Browser-based, real-time collaboration, integrates with QuickBooks |
| Lacerte | Mid-sized firms, complex returns | $2,000-$3,500 annual license plus per-return fees ($15-$30/return) | Strong for business returns, extensive forms library |
| TaxAct Professional | Budget-conscious new firms | $500-$1,000 flat annual fee (unlimited returns) | Low cost, basic features, good for simple returns |
| ATX | Cost-effective, small firms | $1,000-$1,800 flat annual fee (unlimited returns) | Includes e-filing, decent forms coverage, lower learning curve |
Note: Prices vary based on modules (federal, state, business) and add-ons. Always request a demo or trial before committing.
Detailed Look at Top Choices for New Firms
Drake Tax
Drake is a favorite among new firms due to its flat fee. For a firm doing 200 returns, the cost per return is around $7 to $11, which is very competitive. It offers a comprehensive forms library, e-filing, and a straightforward interface. The downside: the interface feels dated, and advanced features like workflow automation are limited. But for a new firm, it’s a solid, affordable start.
ProConnect Tax Online
If you want cloud access and collaboration, ProConnect is worth the higher per-return cost. It integrates seamlessly with QuickBooks, which many new firms use for bookkeeping. The pricing is per return, so your costs scale with volume. For 200 returns, expect to pay $9,800 to $15,800, which is steep, but you get real-time data syncing and the ability to work from anywhere. It’s ideal if you plan to grow quickly and need flexibility.
TaxAct Professional
TaxAct is the budget option. The flat fee is attractive, but it lacks some advanced features like fixed asset management and complex state handling. It’s best for firms handling simple individual returns. If your client base is straightforward, this can keep your overhead low in year one.
Practical Steps to Choose This Week
- List your expected return mix: Write down how many 1040s, 1120s, and 1065s you anticipate. This will guide which software handles your needs.
- Request free trials: Most vendors offer a 30-day trial. Download sample returns and test them. Pay attention to data entry speed and error checks.
- Calculate total cost: For per-return pricing, multiply your expected volume by the per-return fee. Add any annual subscription costs. Compare this to flat-fee options.
- Check state support: If you have clients in multiple states, confirm the software covers those states and any additional fees.
- Ask for references: Join accounting forums or local CPA groups. Ask other new firm owners what they use and why.
- Consider scalability: Choose software that can grow with you. If you plan to add business returns, ensure the software supports them without a major upgrade.
FAQ
Q: How much should I budget for tax software in my first year? A: For a new firm with 100 to 300 returns, budget $1,500 to $5,000 for software, depending on the platform and features. Flat-fee options like Drake or TaxAct are at the lower end, while per-return options like ProConnect can be higher.
Q: Can I switch tax software later if I’m unhappy? A: Yes, but it’s a hassle. You’ll need to convert client data, which can be time-consuming. Many vendors offer data conversion tools, but expect a learning curve. It’s better to choose carefully now.
Q: Is cloud-based software better than desktop? A: Cloud-based offers flexibility and automatic updates, but requires a stable internet connection. Desktop software like Drake works offline and can be faster for high-volume data entry. Consider your work style and client needs.
Q: Do I need separate software for business returns? A: Most professional tax software includes business return modules, but some charge extra. Check if your expected business returns are covered in the base price or if you need to purchase additional modules.
The Bottom Line
Choosing tax software for your new accounting firm is a balance of cost, features, and scalability. Start with a clear picture of your client base and volume. For most new firms, Drake Tax offers the best value with its flat fee, while ProConnect is ideal if you prioritize cloud collaboration. TaxAct is a budget-friendly alternative for simple returns. Test your top two or three options with a trial, calculate your total cost, and pick the one that fits your workflow. Your software is a long-term investment, so take the time to make the right choice now.