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Taxpayers more likely to use DIY tax software, but less satisfied with results

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Taxpayers are more than twice as likely to use DIY tax preparation software as an accountant to do their taxes, but they’re 38 percent less satisfied with the results, according to a new survey.

The survey, from tax practice management software provider Canopy, polled more than 500 taxpayers across the country.

The report found that just over half (51 percent) of the DIY software users surveyed made the switch from self-service to hiring an accountant, mainly because their tax situation became more complex, they needed more personalized service, they wanted better accuracy, the accountant found more deductions, or just to save time.

Conversely, the study also revealed that 55 percent of the accountant clients surveyed citing the following top reasons for switching to a DIY software solution, based on priority: cost savings, time savings, their tax situation became less complex, their accountants found more deductions, and better accuracy.

“The truth is, no one can escape taxes, and increasingly, we’re seeing digital automation impacting all facets of the accounting industry,” said Canopy chief revenue officer Jordan Ray in a statement. “More Americans will use DIY software to file their taxes than tax accountants, but taxpayers have also shared powerful insights on how accounting professionals can come out ahead of technology.”

The company suggested several ways accountants can win DIY software users as clients:

  • Provide tax legal advice.
  • Have a deep understanding of their personal tax situation.
  • Offer free or discounted services if audited.
  • Help with investment advice.
  • Partner with additional service providers: attorneys, financial advisors, insurance agents etc.

For a copy of the report, click here.

Last year, Canopy began developing and testing its own cloud-based professional tax preparation software, but after a series of layoffs and a change in management, it has since decided to focus on its practice management software and delay plans to launch the professional tax prep product (see Canopy cancels brand-new Tax Prep product, offers full refunds).

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Tax prep software Tax practice Client strategies Practice management software Tax season
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