Taxing Subjects

How to Grow and Market Your Tax Business

Fri, 12 Dec 2025 11:00:58 -0500

In today’s competitive market, tax professionals must do more than prepare returns—they must market their services effectively to stay visible, help retain clients, and acquire new ones. Whether you're running a solo tax practice or managing a multi-preparer firm, a smart marketing strategy is key to client acquisition for tax professionals.

Use these effective marketing strategies to help increase visibility, attract new clients, build a strong tax firm brand, and grow your tax business.

Know Your Tax Audience Before You Market

Before diving into tactics, you need to understand who you’re trying to reach. Tax services appeal to various clients—individuals, freelancers, business owners, and corporations. Knowing their needs helps you tailor your messaging for maximum impact.

Break Down Your Market:

Demographics: Age, income level, employment type
Geographics: Local or regional focus, remote services
Psychographics: Attitudes toward taxes, digital habits
Behaviors: Filing history, preferred communication channels, price sensitivity

Use this insight to craft messages that resonate with each segment of your target audience.

Build a Strategic Tax Marketing Plan

A thoughtful marketing plan gives your efforts structure and direction. Here’s how to start:

1. Tax Firm Branding

Your firm’s brand identity. It's not just a logo—it’s your values, tone, and visual presence.

Choose consistent colors, fonts, and visuals
Write with a voice that reflects professionalism and trust
Make your messaging client-focused and solution-driven

2. Optimized Website for SEO

Your website is your digital storefront—and one of your most valuable marketing tools. Make sure it's:

Mobile-responsive and loads quickly
Easy to navigate with clear service pages
SEO-optimized with targeted tax keywords

SEO Tips for Tax Firms:

Keyword Research: Use phrases like “tax filing help near me” or “tax preparer for small business”
On-Page SEO: Add keywords to titles, headings, and meta descriptions
Local SEO: Claim your Google Business Profile, add your NAP (Name, Address, Phone) to every page, and collect client reviews

Create Content That Educates and Converts

Content marketing helps establish your tax firm as a trusted expert while improving your SEO and online authority.

Content Ideas for Tax Professionals:

Blog posts on tax tips for freelancers or small businesses
Simple explainers or blog posts on tax news
Year-round tax planning guides
FAQ pages and how-to articles for common scenarios

Consistency is key—publishing valuable content regularly builds trust and drives traffic to your site.

Harness the Power of Social Media

Social media is essential for building a tax firm brand and client relationships—especially during tax season.

Recommended Platforms for Tax Firms:

LinkedIn: Share educational content and build professional connections
Facebook: Engage local communities and host live Q&As
Instagram & TikTok: Share short tax tips, visuals, or explainer reels for younger audiences
X (formerly Twitter): Post quick updates, share news, and promote blog content

Stay Top of Mind with Email Marketing

Email campaigns help you nurture existing clients and meet new client goals during key filing windows.

Email Best Practices:

Personalize content by name or service type
Segment email lists (e.g., individuals vs. business clients)
Send tax season reminders, deadline alerts, and promotions
Track open and click-through rates to optimize results

Don’t Overlook Networking and Referrals

While digital tools can be very impactful, in-person connections still matter. Attend local chamber events, join professional groups, or partner with financial advisors and attorneys for mutual referrals. Get files from your client – Your client can upload W-2s and other tax documents to your Drake Portals site.

Use Technology to Streamline Communication Such as Client Portals

Client Portals provide a secure document exchange and year-round communication. For example, Drake Portals offers your firm a secure online platform, hosted on the SecureFilePro.com domain, where you and your clients can easily share sensitive tax documents. This can eliminate the need for printing, faxing, or mailing—simply upload PDFs and allow clients to access them whenever it's convenient.

Build an Online Community Around Your Brand

Creating a loyal online community can drive referrals, foster engagement, and increase visibility.

How to Build Your Tax Firm’s Online Community:

Choose the Right Platform: LinkedIn for pros, Facebook for local and small biz clients
Post Consistently: Share blog posts, how-to videos, infographics, and live sessions
Encourage Engagement: Ask questions, run polls, respond to DMs
Listen and Improve: Use feedback to guide future content and services
Stay Transparent: Share accurate info—don’t guess. Trust builds credibility
Promote Interaction: Let your clients talk to each other; this can build loyalty
Track Results: Use analytics to refine what works

Recap: Key Marketing Strategies for Tax Professionals

Here’s an action plan to market and grow your tax business (URL to business growth download) in the digital age:

✅ Define your ideal clients and messaging
✅ Build a strong, mobile-friendly website with solid SEO
✅ Publish helpful content consistently
✅ Use social media to grow your digital presence
✅ Segment and personalize email campaigns
✅ Network offline and build referral partnerships
✅ Leverage marketing tools within your tax software
✅ Create an engaged online community

Final Thoughts

Marketing your tax firm isn’t just about getting more clients—it’s about building trust. Help your firm thrive with the right tools, a consistent plan, and a clear brand voice. Whether you’re just starting or looking to expand, digital marketing can help fuel your tax business growth year after year.

Download our recent business growth infographic , where you’ll learn what your tax professional peers have done to grow their business.

For more tips on how to market your tax business, subscribe to our Taxing Subjects blog.

How to Become a Tax Preparer

Fri, 05 Dec 2025 14:57:25 -0500

Every year, thousands of professionals enter the field and begin building rewarding businesses helping others file their returns. Whether you're pursuing part-time seasonal work or launching a full-time tax practice, one of the first steps is understanding how to become a tax preparer.

In this guide, we’ll walk you through the IRS registration process, key requirements, and how Drake Software®, an authorized e-file provider, can help you start strong.

Step 1: Understand the Role of a Tax Preparer

A tax preparer is a professional authorized to help prepare and file income tax returns. While there are different levels of credentials (such as CPAs, EAs, and AFSP participants), almost anyone can become a paid tax preparer if they meet the applicable requirements. Talk to other tax professionals and do external research on the career.

Step 2: Complete IRS Tax Preparer Registration

To legally prepare federal tax returns for compensation, the IRS requires:

Get a PTIN (Preparer Tax Identification Number)

Visit the IRS PTIN system at rpr.irs.gov to create an account and apply.

Cost: $30.75 (as of 2025)

Optional: Join the Annual Filing Season Program (AFSP)

This voluntary program boosts your credibility and includes your name in the IRS public directory of tax return preparers.

Stay Compliant with Continuing Education

Non-credentialed preparers in the AFSP must complete 18 hours of tax CPE annually, including ethics and tax law updates.

Step 3: Choose IRS-Approved Tax Software

As a new preparer, one of your biggest decisions is which software for tax preparers to use. Software from an authorized e-file provider may help maintain accuracy and enhance data security.

Why Choose Drake Software?

Drake Tax® is trusted by thousands of professionals for its:

Fast, accurate return preparation
Easy learning curve for beginners
Built-in diagnostics and compliance tools
Flexible packages

Step 4: Train and Practice

Before the season starts, take time to learn the software and review IRS publications, such as Publication 17 and Pub 1345. Drake Software offers training videos, tax specific webinars, and practice returns to help you hit the ground running.

Step 5: Start Preparing Returns

Once you have your PTIN, software, and basic training, you can begin accepting clients. As your experience grows, you may decide to:

Pursue an EA (Enrolled Agent) designation
Offer bookkeeping or payroll services
Expand to business or estate returns

Why Now May be the Best Time to Become a Tax Preparer

Tax preparation is a high-demand, recession-resistant field. With the 2025 filing season approaching, there's still time to get registered, trained, and ready.

Becoming a tax preparer doesn’t require a finance degree or accounting license—but it does require the right mindset, compliance knowledge, and tools. To learn more, subscribe to our blog.

For more information on Drake Software, sign up for a Free Trial.

The New Drake Portals Experience: Designed for Tax Pros and Their Clients

Wed, 03 Dec 2025 15:58:12 -0500

A smoother, smarter, and more connected way to collaborate with your clients is here.
Drake Software® is excited to introduce the all-new Drake Portals® taxpayer experience — built to streamline communication, enhance visibility, and simplify your daily workflow.

Why the New Experience Matters

In today’s fast-paced tax environment, clients expect transparency, speed, and convenience — and tax professionals need tools that support efficient collaboration without sacrificing security or control. The latest enhancements to Drake Portals deliver exactly that: a modern interface that makes managing your tax practice — and your clients’ experience — faster and more intuitive than ever.

What’s New for Your Clients

Your clients will likely notice the difference immediately. The refreshed Drake Portals interface makes it easier for taxpayers to stay informed and engaged throughout the filing process.

Here’s what they’ll love about the new experience:

A modern homepage — Contextual guidance and personalized to-do items help clients know exactly what’s next.
Enhanced checklists — Better preparation tools now, and a foundation for future document classification integration.
Simplified navigation — Files, e-signatures, and approvals are all in one convenient location.
Live return status — Clients can now see real-time updates as you prepare their returns.
Quick profile updates — Personal information can be easily reviewed and edited.

Together, these updates empower clients to take an active role in the process — while giving you fewer calls and emails to manage.

What’s New for Tax Professionals

The redesigned Drake Portals doesn’t just benefit clients — it makes your day-to-day practice more efficient, too. You’ll find new tools that give you greater visibility and control over every stage of client collaboration.

Highlights include:

New to-do page — View, track, and manage client tasks in one place. You can even review and dismiss items to keep things organized.
Custom return status settings — A new configuration page in Drake Hub^TMlets you decide whether clients can view real-time return progress.
Unified workflow integration — Drake Workflow^TM now connects seamlessly with Drake Portals and Drake E-Sign for a fully web-based, connected experience.

These updates mean fewer manual steps, clearer communication, and smoother progress from start to finish.

See the New Experience in Action

For a deeper look at the enhancements — and how they can elevate both your client relationships and your practice management — access our recent webinar recording:

The Next Evolution of Drake Portals: A Better Experience for Taxpayers & Pro:
Get Webinar Recording

Disclaimer:

A Note on Availability

Purchase of a Drake Portals subscription is required in addition to your Drake Tax® package.
Drake Workflow is currently in beta testing. As such, you may experience interruptions or changes as we continue refining the product. Drake Workflow (beta) is available as a trial with a paid Drake Tax product through April 30, 2026.

Drake Alert: Beware of Phishing Emails Asking for EFIN

Wed, 26 Nov 2025 13:48:13 -0500

We have received reports of emails sent to users as themselves or from Gmail emails with the from sender name, as if they are Drake Software® and use language that looks like an IRS or Drake Software request for EFIN verification. These phishing messages are not from Drake Software.

What’s Happening

They are spoofed emails sent to look like they came from you or another trusted sender. The goal is to trick you into replying or sharing sensitive information such as your EFIN (Electronic Filing Identification Number), PTIN (Preparer Tax Identification Number), or other IRS-related credentials.

A recent example email included messages such as:

“Our records show that we do not have a document for one or more of the EFINs that you transmit with... Please provide a copy of your EFIN Account Summary and PTIN from IRS e-Services…”

While these messages may look official, they are fraudulent and should not be trusted.

What You Should Do Immediately

If you receive one of these phishing emails:

-Do not reply, click any links, or open attachments.

-Do not fax or email any documentation as requested in the message.

-Forward the phishing email immediately to our support team at support@drakesoftware.com for verification.

-Delete the email from your inbox and trash folder.

If you have your own custom company domain you use for email, (not gmail.com or outlook.com but yourcompany.com), please consider working with an IT professional to improve your email security. You can check to see if your custom company domain can be spoofed here at this link.

Remember

-Drake Software will never request your EFIN or PTIN documentation via unsolicited email.

-If you ever receive a suspicious message and are unsure of its legitimacy, contact Drake Support directly through official channels.

-Always verify sender addresses carefully — phishing messages may use your own address or a slightly altered domain name.

-Keep your antivirus and spam filters up to date.

Need Help?

If you have questions about your EFIN verification or want to confirm whether a message you received is legitimate, please contact us directly at:

📞 (828) 524-8020

📧 support@drakesoftware.com

Qualified Business Income Deduction (QBI): A Guide for Tax Professionals

Fri, 14 Nov 2025 15:35:11 -0500

The Qualified Business Income (QBI) deduction, also known as the Section 199A deduction, allows many pass-through business owners to deduct up to 20% of their qualified business income on their tax return. This guide explains what QBI is, how to calculate the deduction, which businesses qualify (and don’t), and special considerations like real estate safe harbor rules.

What is QBI?

Qualified Business Income (QBI) refers to the net income generated by a qualified trade or business, excluding wages, capital gains/losses, dividends, and interest income.

It applies to pass-through entities, including:

Sole proprietorships
Partnerships
S Corporations
Some trusts and estates

The QBI deduction does not apply to C corporations.

The deduction is taken “below the line” and does not affect self-employment tax or adjusted gross income (AGI).

How to Calculate the QBI Deduction

The QBI deduction can be up to 20% of qualified business income, subject to several limitations. Here’s a simplified outline:

General Calculation:

Determine your QBI from all qualified trades or businesses.
Multiply by 20%.
Apply income thresholds and W-2 wage/UBIA (Unadjusted Basis Immediately After Acquisition) limits (if applicable).
Deduct any Specified Service Trade or Business (SSTB) limitations.
Compare with 20% of taxable income minus net capital gains — the lesser amount is the deduction.

Example:

Qualified business income (QBI): $100,000
20% × $100,000 = $20,000 potential deduction
Compare with 20% of taxable income (excluding capital gains; other exclusions may apply) to determine actual deduction.

Need help automating the calculation? Drake Tax software includes tools to calculate and track QBI across clients.

What Businesses Qualify for the QBI Deduction?

Most pass-through businesses qualify, but there are limitations based on income thresholds and whether the business is considered a Specified Service Trade or Business (SSTB).

Common Businesses That Qualify:

Retailers
Manufacturers
Restaurants
Construction companies
Real estate agents (if not SSTB)
Consultants (non-SSTB types)
Farmmain

What Businesses Do Not Qualify for the QBI Deduction?

If total taxable income exceeds IRS thresholds, owners of certain Specified Service Trades or Businesses (SSTBs) may not qualify.

Examples of SSTBs with limitations:

Health (e.g., physicians, dentists)
Law (e.g., attorneys, legal services)
Accounting
Consulting
Financial services (e.g., investment advisors, wealth managers)
Actuarial science
Performing arts
Athletics
Brokerage services
Any business where the principal asset is the reputation or skill of one or more employees

2023 & 2024 QBI Income Thresholds

If your income is below the threshold, no limitations apply — even for SSTBs.

If your income is above the threshold, wage and SSTB rules apply.

Tax Year	Married Filing Jointly	All Others
2023	$364,200	$182,100
2024	$383,900	$191,950

Note: A phaseout range applies above these thresholds.

QBI for Rental Real Estate: What is the Safe Harbor Rule?

Rental real estate businesses may qualify for the QBI deduction if they meet the IRS safe harbor test.

Safe Harbor Requirements:

Maintain separate books and records for each rental enterprise
Perform 250+ hours of rental services per year
Maintain contemporaneous records of hours, description, dates, and who performed services
Real estate used by the taxpayer as a residence for any part of the year does not qualify

If the safe harbor isn’t met, the taxpayer may still qualify if the activity rises to the level of a trade or business under Section 162.

Documentation & IRS Forms

To properly calculate and claim the QBI deduction, tax professionals should ensure the following:

Review Form 8995 or Form 8995-A
Confirm income thresholds are properly calculated
Ensure SSTB determinations are made accurately
For S Corps or partnerships, ensure W-2 wages and UBIA are reported correctly

Common QBI Issues Preparers Face

Multiple business types with mixed SSTB and non-SSTB income
Rental properties with passive income vs. trade or business activity
W-2 limitations where wages or asset basis is low
Aggregating businesses for combined reporting

Helpful Links & Resources

For professional tax preparers, mastering the QBI deduction is essential for maximizing savings for eligible clients.

For more information on how Drake Software can accurately calculate and track QBI, sign up for a free trial.

Preparing for Policy Changes Ahead of Tax Season

Fri, 14 Nov 2025 14:57:55 -0500

Here is an overview of what may happen and how to prepare ahead of the next tax season.

Download the resource below for a comprehensive breakdown of key policy areas and actionable steps for tax professionals and small businesses.

Note: These are just predictions. Things change and happen very quickly. We will notify you as quickly as possible. Please subscribe to Taxing Subjects for further updates.

Bank Products and Mobile Payment Apps

Thu, 13 Nov 2025 09:20:31 -0500

Bank Products and Peer-to-Peer Apps: What Tax Pros Need to Know

As tax season approaches, clients increasingly want fast, flexible options for receiving their tax refunds. While bank products remain a trusted method used by tax professionals for years, peer-to-peer (P2P) payment apps like Cash App®, Venmo®, and PayPal® are becoming more popular—especially among younger taxpayers. But which method is best? And what should tax professionals keep in mind when offering or advising on refund delivery options?

Let’s break down the differences between bank products and P2P apps in the context of tax preparation.

What Are Bank Products in Tax Preparation?

Bank products are financial services offered by tax preparers—via software partners like Drake Software—that allow clients to pay tax prep fees directly from their refund, often with additional refund delivery options such as:

Direct Deposit
Prepaid Debit Cards
Paper Checks

These products are often backed by banks like EPS Financial, Refundo®, and TIGTA-compliant institutions. Drake Software integrates with several bank product providers to streamline this process.

Benefits of Bank Products:

Clients don’t pay upfront tax prep fees

Secure, IRS-compliant delivery of refunds

Transparent fee structure

Can offer multiple refund delivery options

Why It Matters:

Bank products give tax pros greater control over the process, ensure compliance with comprehensive policies, advanced technology safeguards, routine evaluations, and continuous staff education. Also, bank products can offer value-added services like audit protection or identity theft monitoring.

Peer-to-Peer Apps: A Growing Trend

Apps like Cash App, Venmo, and PayPal offer instant access to money, making them attractive options for refund deposits. Some P2P platforms even offer direct deposit routing numbers, which taxpayers can use to receive IRS refunds.

Pros:

Fast access to funds

Popular among Millennials and Gen Z

Easy-to-use mobile interfaces

Cons:

Not all P2P apps support IRS refunds reliably

Risk of routing/account errors

Lack of tax-specific support or compliance safeguards

Compliance Note:

As of recent IRS regulations, P2P platforms must issue Form 1099-K for payments over $600. This could lead to confusion for taxpayers who use these platforms both personally and for business-related income—especially if they receive refunds or stimulus payments via these apps.

IRS Direct Deposit Recommendations

The IRS recommends using direct deposit for the fastest and safest delivery of tax refunds. Taxpayers can split their refund into up to three accounts, but must ensure that the account information is accurate and valid—especially when using non-traditional platforms like P2P apps.

Pro Tip for Tax Pros: Always verify that the account and routing numbers provided by clients for direct deposit—whether for a bank or P2P app—are valid and capable of receiving IRS funds.

Final Thoughts for Tax Professionals

While peer-to-peer apps offer speed and convenience, they don’t yet match the security, compliance, and control provided by traditional bank products integrated into tax preparation software like Drake Software.

Recommendation: Offer bank products to clients as a default option, highlighting the security and fee-payment convenience. If a client insists on using a P2P app, educate them on potential risks and verify routing/account details with extra care.

For more information on Bank Products by Drake Software, please visit our bank products page.

Disclaimers:

This article is for informational purposes only and not legal or financial advice.

Drake Software, LLC ("Drake") receives fees from some third parties that provide offers to its customers. This compensation may affect what and how we communicate their services to you. Drake is not a party to any transactions you may choose to enter into with such third party(ies) and disclaims any liability arising out of such transactions. Please see such third-party site for their terms and conditions.

All trademarks not owned by Drake that appear in this blog are the property of their respective owners, who are not affiliated with, connected to, sponsoring, or sponsored by, Drake

6 Practical Tips for Managing Difficult Tax Clients

Thu, 06 Nov 2025 11:39:07 -0500

6 Practical Tips for Managing Difficult Tax Clients

Tax season can bring out the best—and worst—in your clientele. Stress, deadlines, and complex financial issues may cause some tax customers to act impatient, defensive, or outright combative. As a professional tax preparer, knowing how to handle difficult clients is essential for maintaining professionalism, protecting your time, and delivering accurate returns.

Here are six actionable tips for client management for tax preparers when dealing with difficult tax clients.

Set Clear Expectations Early

Before you prepare a single form, make sure your clients understand the scope of your services, timelines, required documents, and associated costs. Provide an onboarding packet or checklist that outlines what they need to bring. This reduces confusion and gives you a reference point if disputes arise.

Pro tip: Share Drake Software’s Client Tax Document Checklist to get clients organized early.

Use Calm, Assertive Communication

Difficult conversations are best handled with a calm tone and steady posture. When tensions rise, try not to match the client’s energy. Instead, use clear, direct language and reframe issues around solutions rather than blame.

Pro tip: Acknowledge the client’s position and present action items. For example, “I understand this is frustrating. Let’s look at what we can do next to resolve it.”

Don’t Skip Documentation

In any case where there’s a dispute or pattern of hostility, make sure you’re documenting conversations and decisions. Keep copies of email threads, engagement letters, and notes from phone calls. If needed, this can help protect you from liability or justify your decisions to the IRS.

Create Boundaries Around Availability

Managing clients during tax season requires time-blocking and structure. Let your clients know your office hours and how to reach you for urgent versus non-urgent needs. Establish boundaries for same-day turnaround and weekend availability — you can even include these details in your voicemail or email signature during peak season.

Empathize, But Stay Professional

Sometimes, tax clients are difficult because they’re anxious about refunds, audits, or unfiled returns. Acknowledge their emotions without taking on their stress. Keep the conversation focused on facts, not feelings.

Pro tip: For example, you could say, “It’s completely normal to feel overwhelmed. We’ll work through this step by step.”

Know When to Say Goodbye

If a client is consistently disrespectful, refuses to follow your advice, or becomes a liability, it may be time to disengage. You have the right to protect your practice and your peace of mind.

Use a disengagement letter to formally end the relationship, outline what work (if any) will be completed, and document how sensitive information will be disposed of on your end.

Ready to Reduce Stress with Your Clients?

Improve your workflow by downloading our Client Checklist to help your tax customers be prepared and reduce friction during intake.

Drake Software: Empowering Tax Professionals with Comprehensive Solutions

Fri, 24 Oct 2025 21:00:06 -0400

In today’s fast-paced tax and accounting world, professionals need more than just software — they need reliable tools, integrated solutions, and a partner who understands the evolving challenges of the industry. Let’s explore Drake’s products and services – your chance to see what’s ahead and stay ahead with Drake.

Our products and how they can help tax professionals

1. Drake Tax

At the heart of Drake’s offerings is Drake Tax®, a robust desktop-based tax preparation software designed for both individual and business returns.

Comprehensive Coverage: Supports federal and state returns for individuals, businesses, estates, trusts, and nonprofits.
Speed & Efficiency: Features like auto-fill data entry, multi-state returns, and real-time error checking save valuable time.
E-Filing: Secure, streamlined e-file capabilities for both federal and state returns.
Customizable Workflows: Tools like the return manager, client status tracking, and reporting make it easier to manage practices of any size.

2. Drake Tax Online (DTO)

For firms that want flexibility and mobility, Drake Tax Online^TMbrings the power of Drake Tax into the cloud.

Access Anywhere: Work from almost any device with an internet connection—no local installs required.
Collaboration: Preparers and staff can collaborate in real time, whether in the office or working remotely.
Security: Built-in cloud protections help keep sensitive client data safe.
Integrated Tools: Includes the same reliable calculations and compliance support as Drake Tax desktop.

DTO gives tax professionals the ability to stay productive year-round, even when working across multiple offices or locations.

3. Drake Accounting

Drake Accounting® expands the firm’s reach beyond tax season, providing a year-round solution for accounting needs.

Payroll Services: Process payroll efficiently with built-in tax tables and reporting.
General Ledger & Accounts: Manage bookkeeping tasks with integrated accounts payable/receivable features.
Client-Focused: Offer additional services to clients, helping firms diversify and strengthen relationships.

4. Drake Workflow

Managing deadlines, staff collaboration, and client deliverables can be overwhelming. Drake Workflow ^TM is designed to simplify practice management.

Task Management: Assign, monitor, and track staff tasks to help ensure nothing slips through the cracks.
Client Communication: Centralize communications for smoother collaboration.
Workflow Templates: Standardize processes across the firm for consistency and compliance.
Dashboard Oversight: Provides visibility into firm-wide productivity, project progress, and upcoming deadlines.

By integrating Drake Workflow, By integrating Drake Workflow, firms can gain better control over efficiency and staff management, helping reduce bottlenecks and ensure timely delivery of services.

5. SecureFilePro

In an era where data security is critical, Drake offers SecureFilePro®, a cloud-based file exchange portal that enables tax professionals to:

Share sensitive tax documents securely with clients.
Allow clients to upload documents from anywhere, anytime.
Provide e-signature capabilities for faster processing.

6. Drake Portals & Mobile Tools

Drake embraces modern, mobile-friendly tools to help firms stay connected. Drake Portals and mobile features allow preparers and clients to interact seamlessly, from secure messaging to document sharing—all accessible on the go.

Complementary Services

Training & Support

One of the most appreciated aspects of Drake Software® is its award-winning customer support.

Training Programs: In-person, virtual, and self-paced training courses.
CPE Webinars: Continuing professional education opportunities for tax preparers.
Knowledge Base: Extensive resources to help users get answers quickly.

Bank Product Integration

Drake partners with leading banks to offer refund transfer options and other financial products, giving firms additional flexibility to meet client needs.¹

Data Conversion Services

For professionals transitioning from another platform, Drake provides data conversion services to ensure a smooth switch with minimal disruption.

Why Choose Drake?

Affordability: Pricing is competitive without sacrificing features.
Reliability: Trusted by thousands of preparers nationwide.
Efficiency: Tools designed to maximize productivity and accuracy.
Flexibility: Desktop, online, and cloud solutions fit different firm needs.
Scalability: Ideal for solo practitioners, small firms, and larger practices alike.

Drake isn’t just a software provider—it’s a long-term partner for tax professionals who want to grow their practice while delivering exceptional client service.

Tax professionals face increasing complexity, but with the right technology, that complexity can be turned into opportunity. Drake Software’s products—Drake Tax, Drake Tax Online, Drake Accounting, Drake Workflow, SecureFilePro, and its suite of services—are designed with professionals in mind. Together, they can help firms streamline operations, strengthen client relationships, and thrive in an ever-changing landscape.

Whether you’re a seasoned CPA, an independent tax preparer, or building a growing firm, Drake Software offers the tools and support to help you succeed.

For more information, please sign up for a free trial²

1. Additional terms and conditions apply.

2. Download requires submission of contact information and consent to receive marketing messages. This offering does not allow returns to be printed or e-filed. Offer subject to change. Additional terms and conditions may apply.

What’s New at Drake Software

Thu, 23 Oct 2025 11:29:41 -0400

By: Noha Ghazouani, VP, Product Management

New Features That Make a Difference

Your daily tax office operations rely on tools that are both powerful and intuitive. At this year’s Update Schools, we’re showcasing time-saving features that were influenced by user feedback — because we’re listening — a key promise we make to our customers. We understand your pain points and concerns, so that we can make impactful product improvements.

Drake Workflow

Drake HubTM was introduced in the summer of 2025, and remains a central command center for your client data. Building on the foundation of Drake Hub, we are now rolling out Drake Workflow. Drake Workflow connects all Drake Software® tools so they link seamlessly.

To learn more about Drake Workflow, please visit the following resources:

Recorded Webinar

Knowledge Base Article

Drake Workflow website

Whether you’re reviewing tax returns, scanning documents, or managing communications, Drake Hub helps keep everything in one place. Drake Workflow automates tasks and tracks progress to enhance productivity.

The System Continues to Evolve

These tools were developed based on real tax office needs — many of which were raised through direct feedback, conversations at update school sessions, user surveys and other ways of collecting feedback including email.

What’s new:

Common Client List: View all clients shared across preparers and staff, simplifying collaboration.

Non-Tax List: Manage clients with non-tax services (like bookkeeping or payroll) to better organize your work.

Client Notes: Add and view notes regarding your clients across your firm to ensure that all staff members are up-to-date.

These updates help you stay on top of every client interaction from intake to filing — and beyond.

Drake Workflow Beta

Drake Workflow is now in beta — giving you early access to our new tax practice automation platform that connects all your Drake products in one place. From tax preparation to client communication and payment collection, you can manage every task, owner, and status in a single, streamlined view.

As a beta user, you’ll be among the first to experience new workflow features and provide feedback that shapes future enhancements. During this phase, we’ll continue refining functionality and performance, and pricing is subject to change. The beta will be available through April 2026.

Drake Software Update Schools

Each year, Drake Software Update Schools offers tax professionals the chance to prepare for filing season with hands-on product training, industry updates, and previews of new tools designed to make your workflow more efficient.

In addition to the usual federal and state program overviews, this year’s sessions highlight exciting enhancements across our suite of tools. Don’t miss it!

Drake Software Update Schools aren’t just about training — it's about listening. This year, we’ve highlighted:

Updates to the Hub for better client access

Workflow tools like Common Client List and Non-Tax List

Direct feedback channels to help guide future development

Let us know what works, what doesn’t, and what you want to see next. We’re listening —and we’re building Drake Software with you in mind.

We Want Your Feedback!

Everything mentioned above was shaped by tax professionals like you. Whether you loved a feature or wished something worked differently, we want to hear about it.

Like what you see?

Want to see something improved?

Send your feedback—good, bad, or in-between—to:

feedback@drakesoftware.com

We take your input seriously. Our development teams review every submission and use your insights to guide product updates and enhancements.

The One Big Beautiful Bill Act Guide for Tax Pros

Fri, 17 Oct 2025 20:38:44 -0400

A guide to the latest updates and resources on OB3

Here's what you'll learn more about:

What is the One Big Beautiful Bill Act?
Permanent Extension of 2017 Tax Cuts
Increased SALT Deduction Cap
Enhanced Child Tax Credit
Senior Deduction Introduction
R&D Expensing Reinstated
Tip Deduction: Which jobs qualify?
New Car Loan Deduction
Overtime

What is the One Big Beautiful Bill Act?

The One Big Beautiful Bill Act (OBBBA or OB3) or H.R.1 - 119^th significantly changes how taxpayers qualify for deductions, requires new employer reporting standards, and introduces IRS oversight in areas like tip income, wage classification, and transition-year compliance. With major implications for 2025 and beyond, preparers must update workflows, educate clients, and ensure tax software is aligned with the new rules.

We are committed to providing the latest resources and updates relating to OB3 to help tax professionals get through the upcoming tax season with as little uncertainty as possible.

We have a few resources that cover introductory topics related to the One Big Beautiful Bill Act. Please visit:

Blog Post: The One Big Beautiful Bill Act: What Tax Pros Need to Know

Video: The One Big Beautiful Bill Act Explained

Recorded Webinar: Pending

Let’s break down the One Big Beautiful Bill Act for tax professionals

Permanent Extension of 2017 Tax Cuts

The Permanent Extension makes the Tax Cuts and Job Act (TCJA) permanent with lower tax brackets and higher standard deductions.

More explained:

Keeps lower tax brackets, higher standard deduction, 20% pass-through deduction, bonus depreciation, and doubled estate/gift exemptions beyond 2025.
Baseline update: Assumptions in projections, planning, and software shift — TCJA rules are now the “new normal.”
OBBB adds new deductions (tips, overtime, car loan interest, higher SALT cap) and some temporary provisions.
Client communication: Many clients avoid a 2026 “tax hike,” but you’ll still need to track temporary or phased-out items.

More resources:

Blog Post: Congressional Reconciliation Tax Changes

Download: Prepare for Policy Changes Ahead of the 2025 Tax Season

Increased SALT Deduction Cap

The increased SALT deduction cap allows taxpayers to claim a higher deduction for state and local taxes on their federal returns.

More explained:

New higher cap (2025–2029): The SALT deduction limit rises from $10,000 to $40,000 (for joint filers) in 2025.
Married filing separately: Cap is $20,000 under the new rule.
Phaseout for high income: For filers with MAGI above $500,000 (or $250,000 if married filing separately), the cap is reduced by 30% of the excess income.
Floor & reversion: The deduction can’t be reduced below the old cap ($10,000). Beginning in 2030, the cap reverts back to $10,000.
PTET workarounds stay intact: Pass-through entity tax (PTET) workarounds stay intact: The Act doesn't eliminate or limit PTET strategies used to bypass SALT caps.

Enhanced Child Tax Credit

Higher & permanent: Credit increases to $2,200 per child (from 2025, inflation-indexed) with a larger refundable portion ($1,700 in 2025).
No 2025 sunset: The higher credit and phase-out thresholds ($400k MFJ / $200k others) are now permanent.
SSN requirement: Both the child and taxpayer must have valid SSNs.
Other dependents: $500 credit stays, but nonrefundable.

For tax pros: More predictability in planning, bigger refunds for lower-income families, and a need to update projections and client communication.

Senior Deduction Introduction

New deduction (2025–2028): $6,000 per taxpayer age 65+ ($12,000 for couples if both qualify).
Phase-out: Begins at $75k MAGI (single/HOH) or $150k (MFJ, both 65+); fully gone at $175k / $250k.
Stacks with other deductions: Can be claimed with standard or itemized deductions and in addition to the existing senior standard deduction.
Temporary: Expires after 2028 unless extended.

For tax pros: Model income carefully near phase-out thresholds, highlight the short planning window, and update client projections accordingly.

Drake Knowledge Base Article: KB Article 18837 – Senior deduction values and thresholds

R&D Expensing Reinstated

Immediate expensing back (2025+): Domestic R&D costs can again be deducted in full the year incurred.
Transition relief: Unamortized 2022–2024 R&D expenses may be deducted in 2025 (or spread over 2025–26).
Small business retroactive option: Firms ≤ $31M gross receipts can amend prior returns to claim expensing.
Foreign R&D unchanged: Still amortized over 15 years.
Optional amortization: Taxpayers can elect to spread costs instead of expensing.

For tax pros: Stronger cash flow for R&D-heavy clients, need to track domestic vs foreign R&D, evaluate amending past returns, and update projections/software for new Section 174A rules.

Tip Deduction

New deduction (2025–2028): Up to $25,000 above-the-line for qualified tips.
Who qualifies: Employees in IRS-listed tipped jobs; must report tips on W-2/1099.
Phase-out: Starts at $150k MAGI (single) / $300k (joint).
Limits: Self-employed can’t deduct more than net business income; Specified Service Trade or Business (SSTB) occupations excluded.
Qualified tips: Voluntary customer tips (cash, card, electronic); not mandatory service charges.
Temporary: Expires after 2028 unless extended.

For tax pros: New planning tool for service-industry clients, but phase-out rules and reporting compliance will be critical.

Resources:

Drake Knowledge Base Articles:

Who qualifies for the new car loan deduction?

Time window: Applies to interest on auto loans taken out after December 31, 2024 and before 2029 (i.e., tax years 2025–2028).
Vehicle must be new & U.S. assembled: The car (or SUV, truck, van, or motorcycle) must be new (original use begins with the taxpayer) and its final assembly must occur in the U.S.
Weight & vehicle type limits: Only passenger vehicles under 14,000 lbs. qualify.
Personal use only: The vehicle must be for personal use—not a business, commercial fleet, or lease.
Loan must be secured & eligible: The loan must be secured by the vehicle, with a first lien. Refinanced loans may qualify (if the original loan met the rules).
Income phaseouts:
The deduction begins to phase out when a single filer’s MAGI exceeds $100,000, or $200,000 for married filing jointly.
It is fully phased out for single filers over $150,000 MAGI, and for joint filers over $250,000 MAGI.
Reporting required: Taxpayers must include the vehicle’s VIN on the return, and lenders must report interest (similar to Form 1098) when interest paid ≥ $600.

Overtime under OB3

New above-the-line deduction (2025–2028): Eligible workers can deduct up to $12,500 (single) or $25,000 (joint) of “qualified overtime compensation.”
What qualifies: Only the premium (the “half” in “time-and-a-half”) for overtime required under the FLSA (i.e., federal overtime).
What doesn’t qualify:
Overtime mandated by state/local law (unless same as FLSA)
• Employer-paid premiums beyond FLSA minimum (like double-time)
• Non-exempt bonuses or incentive pays not tied to overtime hours
Phase-out / income limits: Begins phasing out at $150,000 MAGI (single) / $300,000 MAGI (joint).
Reporting & employer duties: Employers must separately track and report “qualified overtime compensation” on W-2s. For 2025, they may approximate using a “reasonable method.”
Taxes still apply: The deduction applies only for federal income tax. FICA (Social Security and Medicare) still applies to full overtime pay.
Temporary: Set to expire after 2028, unless extended.

Drake resources:

KB Article 18837 – Drake Tax Planner Updates (has overtime fields)

We will update this page as often as possible. To learn more, please check back regularly for updates.

AI and Cybersecurity Trends Every Tax Professional Should Watch

Tue, 07 Oct 2025 17:32:34 -0400

As the demand for digital tax services grows, so do the risks associated with protecting sensitive client data. At the same time, AI is also being used to strengthen cybersecurity defenses. For tax preparers, understanding this dual role is critical to maintaining a secure and compliant practice during peak filing season and beyond.

The Role of AI in Modern Cybersecurity

AI as a Defensive Tool

Firms that incorporate AI into their tax practice cybersecurity strategy may benefit from faster, more intelligent protection. AI tools may help:

Detect unusual login behavior or access patterns
Automate incident response actions such as quarantining devices or blocking suspicious logins
Identify new threats based on past attack data

Tax software platforms and security vendors increasingly offer AI-driven features to enhance fraud detection and network monitoring.

AI as a Threat Vector

Cybercriminals are also leveraging AI to make attacks more effective and harder to detect. AI-generated phishing emails can mimic natural language patterns, making them appear more legitimate. Hackers use AI to automate network scanning, bypass multi-factor authentication, and impersonate voices or writing styles in social engineering attempts.

This creates a more complex threat environment, requiring tax professionals to go beyond traditional antivirus solutions.

Cybersecurity Best Practices for Tax Preparers

To reduce the risk of a data breach and protect client information, tax professionals can implement a layered cybersecurity strategy that combines technology, training, and compliance.

Download our cybersecurity checklist to help you and your tax business reduce the risk of a cybersecurity scam.

1. Follow the IRS Security Six

The IRS and its Security Summit partners recommend the following foundational protections:

Use antivirus software and update it regularly
Enable firewalls on all devices
Require two-factor authentication for all logins
Back up sensitive data to secure, offsite locations
Encrypt drives and files that store client data
Use a virtual private network (VPN) for remote access

Drake Software users benefit from built-in features like multi-factor authentication and encrypted data storage that align with these guidelines.

2. Invest in Security Awareness Training

With AI enhancing the realism of phishing attacks, tax firms must regularly train staff to recognize suspicious emails, links, and requests. Simulated phishing exercises and refresher courses should be conducted quarterly, especially ahead of tax season to help keep tax clients safe from scams.

3. Use AI-Enhanced Security Tools

Look for endpoint protection platforms, email security services, and firewall solutions that use AI or machine learning to detect and respond to threats in real time. These tools can help reduce reliance on manual monitoring and catch threats before they spread.

4. Monitor for Data Leaks

Consider using cybersecurity services that scan the dark web for leaked credentials or references to your firm’s data. If a breach is suspected, prompt action — such as password resets and client notifications — can help limit the damage.

5. Apply Role-Based Access Controls

Limit access to sensitive tax data based on job roles. Not all team members need full access to every client file. By restricting access, you reduce the potential impact of insider threats or compromised accounts.

As AI continues to evolve, it will shape both the threats facing tax professionals and the tools used to defend against them. Embracing AI-powered cybersecurity solutions while staying vigilant against emerging threats is essential to help protect your practice and clients.

For more information on cybersecurity best practices for tax professionals, please download our latest cybersecurity checklist.

Learn more about Drake Software Security Features.

Drake Software Desk Reference Guide for Tax Year 2025: Version Two

Tue, 07 Oct 2025 17:25:40 -0400

With the IRS still developing instructions for Schedule 1-A and making revisions to previously released guidance—such as the updated figures in Rev. Proc. 24-40, along with several provisions still awaiting official regulations—tax professionals are navigating an unusually uncertain landscape.

Stay Informed in a Year of Constant Tax Law Shifts

Because IRS guidance continues to evolve, portions of the current Desk Reference Guide may change. We are monitoring developments closely to ensure accuracy.

To keep you informed, Version 3 of the Desk Reference Guide will be released as soon as the IRS publishes clarifying updates, ensuring you always have the most current and reliable information at your fingertips.

Why is the 2025 desk reference guide considered a tax season best practice?
From a preseason checklist to due diligence requirements to updated tax rate schedules, having a checklist can help streamline your practice.

What is included in the desk reference guide?

Updated deductions including standard and MACRS recovery periods, information on medical savings accounts (MSA) and health savings accounts (HSA)
Filing requirements for tax year 2025 including dependents
Child tax credit updates
Student load deductions
Earned income credit
Drake Software best practices, and much more

Taxes for Gig Work: What Tax Pros Need to Know

Wed, 01 Oct 2025 20:43:21 -0400

In today’s ever-expanding freelance economy, more Americans are working outside traditional employment. Whether it’s delivering meals for DoorDash, creating content on YouTube, or driving for Uber, this growing pool of gig workers brings new challenges for tax professionals — especially with upcoming changes from the One Big Beautiful Bill Act (OBBBA).

Here's what you need to know to guide your clients who earn freelance income or work in the gig economy.

What Is Gig Work?

“Gigging” is a type of freelance work (officially referred to as independent contracting) that usually refers to short-term or project-based work arrangements, often facilitated by digital platforms. Common examples include:

Rideshare driving (Uber®, Lyft®)
Food delivery (DoorDash®, Grubhub®)
Online marketplaces (Etsy®, eBay®, Fiverr®)
Payment processor income (PayPal®, Stripe®, Venmo®)
Part-time or seasonal freelance services (writing, graphic design, tutoring)

These income streams are often reported through Form 1099 rather than a W-2, and that changes how the income is taxed — and how it should be reported.

Gig Economy Trends: Why It Matters Now

According to recent IRS trend reports, gig economy participation continues to rise, with more than 16% of U.S. adults reporting some kind of freelance income. Platforms like PayPal and Stripe are making it easier than ever to earn side income, which means more taxpayers need help understanding their obligations.

For a deeper dive into recent tax trends, check out our free guide analyzing tax year 2025.

OBBBA: Major Changes Ahead for Freelancers, Including Gig Workers

The One Big Beautiful Bill Act introduces key provisions that could reshape freelance tax planning:

New 1099-K Thresholds: OBBBA adjusts income reporting thresholds for third-party platforms. This means more gig workers will receive a 1099-K — even if their earnings are relatively modest.
Tip and Overtime Deduction: Beginning in tax year 2025 (filed in 2026), workers can deduct up to 25,000 dollars of tip or overtime income from their federal taxable income. This provision is especially impactful for service-based gig workers.

These changes require tax pros to educate clients early and help them prepare to track and categorize income properly. Learn more about 1099-K guidance.

How Are Gig Workers Taxed?

Gig workers are usually classified as self-employed, which makes them responsible for the self-employment tax, currently 15.3% (12.4% for Social Security and 2.9% for Medicare).

Many taxpayers are unaware that they need to make quarterly estimated payments if they expect to owe 1,000 dollars or more in taxes when filing. Failing to do so can result in penalties.

Who Qualifies as a Gig Worker?

Worker classification continues to be a hot topic — and a compliance trap. Because employees and freelancers are taxed differently, misclassifying an employee as a gig worker can result in fines, back taxes, and audits.

A range of factors go into determining employee or freelancer classification, and these fall into three main categories:

Behavioral Control: Does the company direct what the worker does and how the work is performed? The more control the company exerts over day-to-day tasks, the more likely the worker is an employee.
Financial Control: Who manages the business aspects of the work? Consider how the worker is paid, whether expenses are reimbursed, and who provides tools or supplies. A worker with greater financial independence typically leans toward contractor status.
Type of Relationship: Are there written contracts or benefits such as health insurance, retirement plans, or paid time off? Does the relationship seem ongoing, and is the work integral to the business? These factors may point toward an employment relationship.

No single factor determines classification on its own, so the best practice is to evaluate all relevant factors, recognize that some may carry more weight than others depending on the situation, and document the reasoning behind the final determination.

Tax professionals should review how their clients are being paid, note the level of control exercised by platforms or clients, and seek legal advice as needed.

Tax Forms for Gig Work

Taxpayers with gig or freelance income should be familiar with the following forms:

Form 1099-NEC – For nonemployee compensation.
Form 1099-K – For third-party payment platform transactions.
Schedule C (Form 1040) – To report income and expenses from self-employment.
Schedule SE (Form 1040) – To calculate self-employment tax.
Form 8829 – For home office deductions (if eligible).

Pro Tip: Minister Taxes as a Special Case

Ministers and clergy can sometimes be categorized as self-employed for federal income tax purposes, while still being considered employees for other benefits. They often have to pay self-employment tax on housing allowances or stipends, making them a unique gig-work-adjacent group tax professionals should be aware of.

Support Your Freelance Clients with Drake Software

With new legislative changes, it's more important than ever for tax professionals to proactively guide clients with gig income. From planning for self-employment tax to staying current on 1099-K requirements, your expertise can help clients avoid surprises come tax season.

Drake Software has resources to help you support clients in the gig economy:

Comprehensive Pro Tax Software: Equip your office with professional tax preparation software that provides fast calculation results, hundreds of accuracy checks, and customizable program options.
Award-Winning Customer Service: Rely on our expert support for quick, friendly assistance whenever you need it.
Simple, Flat-Rate Pricing: Browse packages designed to support tax professionals of any kind, from solo preparers to multi-site tax preparation businesses.

Ready to get started? Join us for a webinar introduction, take a guided tour with a free seminar, or download a free trial of Drake Tax today.

Disclaimer: All product names, logos, and brands such as Uber, Lyft, DoorDash, Etsy, eBay, Fiverr, PayPal, Stripe, and Venmo are the registered trademarks of their respective owners. Any use of these names is for identification and reference purposes only and does not imply any endorsement, affiliation, or sponsorship.

Essential Tax Documents Checklist for Your Clients with OB3 Updates

Sat, 27 Sep 2025 18:57:39 -0400

Tax season can be overwhelming, but a well-organized checklist simplifies the process for both tax professionals and their clients. By ensuring clients gather the necessary documents ahead of time, tax preparers can save time, reduce errors, and improve efficiency.

In addition to helping with annual filing, this year’s resources also include important information about the One Big Beautiful Bill Act!

This guide will walk you through how to help clients understand what forms they need, where to find them, and why they matter. By proactively guiding clients, you can streamline your workflow, enhance accuracy, and build trust—making tax season smoother for everyone.

How do I help clients gather key tax documents?

For the average taxpayer, being provided the list of tax documents below may raise more questions than answers:

Forms W-2 (Wage and Tax Statement)
One Big Beautiful Bill Act Checklist
Various Forms 1099 (Reporting non-wage income)
Various Forms 1098 (Reporting deductible expenses)
Records of tax-deductible expenses
Healthcare coverage forms (1095-A, 1095-B, 1095-C)
Identifying information (SSN, previous tax returns, IP PIN, bank details)

That’s why we’ve made a thorough checklist for your clients to use as they gather their documents. This handy resource explains what the forms are, why they need to be passed along to you for tax prep, and where they can be found—along with updates on how the One Big Beautiful Bill Act may change or clarify certain filing obligations.

Download the essential tax forms checklist below!

Drake Workflow: Smarter Tools to Keep Your Tax Office Moving

Fri, 19 Sep 2025 22:33:02 -0400

Tax season can be overwhelming. Between juggling client files, assigning tasks, and making sure nothing slips through the cracks, it’s easy to feel like you’re running on spreadsheets and sticky notes. That’s why we built something new: Drake Workflow (Beta).

Drake Workflow brings your favorite Drake Software® tools together to help you and your team stay on track, save time, and get real-time visibility into every return. To access it, simply log into the Hub and look for the Drake Workflow (Beta) tab on the left side navigation.

What Can Drake Workflow Do for You?

Think of it as your office command center. Drake Workflow automatically keeps tasks and return statuses updated, routes work to the right person at the right time, and gives you a clean dashboard to see the status of every client.

Here’s how it makes your life easier:

Automatic status updates. No more tracking in spreadsheets—returns update as you go.
Smart task routing. The right work gets to the right team member, right on time.
Clear visibility. See every client return at a glance, with alerts for items that need attention.
Simple controls. Drag-and-drop status changes, quick task delegation, and even client payment tracking in one place.

A Beta with More to Come

Drake Workflow is launched in beta, which means you’ll be among the first to use it. Even better, your feedback will help shape the future of the tool. We’ll continue to add improvements, fine-tune the experience, and build on your ideas to make Drake Workflow an indispensable resource for tax professionals.

See It in Action

Listen to the recorded webinar. Our product experts will walk you through the new automation suite.
Log into user.drakesoftware.com and navigate to the Workflow (Beta) tab on the left side of the screen.
Explore our Knowledge Base Article. Get step-by-step guidance on using Drake Workflow.

2025 Drake Tax® Planner: One Big Beautiful Bill Act Updates Unpacked

Wed, 10 Sep 2025 23:59:47 -0400

As we gear up for the 2025 tax season, the Drake Tax Planner has been updated to reflect important provisions from the One Big Beautiful Bill Act, helping tax professionals quickly adapt and accurately model client scenarios.

Here’s a breakdown of what’s new:

1. 100% Bonus Depreciation

For assets placed in service after January 19, 2025, bonus depreciation now stands at a full 100%.

2. Section 179 Expense Limit Increase

The Section 179 deduction limit has risen to $2.5 million, with phase-outs beginning at $4 million— a substantial enhancement for high-cost asset purchases.

3. Updated Standard Deductions

Married Filing Jointly (MFJ): $31,500
Head of Household (HOH): $23,625
Single / Married Filing Separately (MFS): $15,750

4. Child Tax Credit (CTC) Increase

The credit has been elevated to $2,200 per qualifying child.

5. SALT (State and Local Taxes) Limitation Raised

The SALT cap is now $40,000, subject to reduction by 30% of AGI exceeding $500,000.

6. Additional Deduction for Age 65+

Taxpayers aged 65 and older receive an extra $6,000 in deduction, helping to reduce their taxable income .

7. Clean Vehicle Credits Sunset

The Clean Vehicle Credit, Previously Owned Clean Vehicle Credit, and the Qualified Commercial Clean Vehicles Credit will expire for vehicles acquired after September 30, 2025.

8. New Tax Planner Enhancements & MISC Screen Fields

A new checkbox — “For assets placed in service after January 19, 2025, apply the transition rules”— now appears on screen 10 in the Drake Tax Planner. It also appears outside Tax Planner in returns needing fiscal year adjustments.
On the MISC screen, you’ll find new bottom‑screen fields to account for:
- No tax on tips
- No tax on overtime
- New car loan interest deduction

Why It Matters for Your Practice

These updates drastically influence scenario outcomes in the 2025 Tax Planner. Early adoption helps you:

Run accurate forecasts — plan for asset purchases, expanded deductions, and tax credits.
Fine-tune client strategy, especially for business owners and retirees.
Avoid last-minute surprises — the clean vehicle credits expire soon, so plan accordingly.
Improve tax savings, especially for high-earners contending with the revised SALT limitation.

Quick Tips

Always toggle the transition‑rules checkbox for applicable assets to ensure full bonus depreciation or Section 179 benefits are captured.
Use MISC screen options to reflect common deductions like car interest or tip/overtime adjustments—great for fine-tuning tax planning.
Verify the clean vehicle credit eligibility date for any client purchasing vehicles in late 2025.

The Drake Tax Planner now aligns with the One Big Beautiful Bill Act to incorporate significant updates—100% bonus depreciation, higher Section 179 and standard deductions, an improved child tax credit, elevated SALT limits, and more. These changes, active as of July 17, 2025, are essential for accurate tax planning and should be leveraged now as you model client returns for 2025.

Please visit the Drake Tax Planner. Read our blog article about the One Big Beautiful Bill Act.

To learn more about Drake Software, please sign up for a free trial.

Drake Tax Online™: A Smart Cloud-Based Option for New Tax Pros

Thu, 04 Sep 2025 14:33:26 -0400

If you're a new tax preparer looking for your first professional tax software, you’ve got options — but some of those options may not be built with new preparers in mind.

That's where Drake Tax Online™ comes in.

Drake Software has launched a new web-based product that’s perfect for new preparers who want a fast, flexible, and secure solution.

Let’s walk through why Drake Tax Online is a great fit for professionals just starting their tax careers.

Work from Anywhere — Even on a Mac or Chromebook

As a new tax preparer, you may not have invested in a full office setup yet. Drake Tax Online works from any major browser, including Chrome, Edge, Firefox, and Safari — so it’s compatible with Macs, Windows PCs, and even tablets.

That means you can start preparing returns from your home office, local library, or even a coffee shop — securely.

Easy-to-Follow Workflows for Form 1040

Not sure where to start when preparing a return? Drake Tax Online includes a guided 1040 workflow designed to walk you through the prep process step by step.

Prefer to dive right into the forms? You can do that, too. Drake Tax Online offers a flexible experience, allowing you to switch between guided and traditional data entry modes as you build your confidence.

Built-In Security for Peace of Mind

As a tax pro, protecting your clients’ data is your responsibility. Drake Tax Online has you covered with:

128-bit encryption

Multi-factor authentication

Automatic updates and security patches

No need to worry about installing Drake Tax Online updates or managing software security — it’s all handled in the cloud.

Used another tax software last season?

Drake Tax Online supports data conversion from other major platforms, so you won’t lose your client history when you make the switch.

Powerful Integrations

Drake Tax Online works with tools that streamline your workflow, including:

Drake Portals® – Secure file exchange with clients

Drake Pay™ – Simplified payment processing

Protection Plus® – Audit assistance for your clients

TheTaxBook® WebLibrary Plus – Trusted tax research resources

These integrations save you time and help you serve your clients better — even in your first season.

Get Started with Drake Tax Online Today

Drake Tax Online is available now for the upcoming filing season. Whether you're preparing your very first return or getting ready to open your own virtual tax office, Drake Tax Online gives you the flexibility and reliability to help you succeed.

Want to try it for free?

Contact our Sales Team at (800) 890-9500 or visit Drake Tax Online to learn more. Start your free trial here.

All product names, logos, and brands are the property of their respective owners. Chrome and Chromebook are trademarks of Google LLC. Windows, and Edge are trademarks of Microsoft Corporation. Mac and Safari are trademarks of Apple Inc. Firefox is a trademark of the Mozilla Foundation. Any use of these names is for identification purposes only and does not imply endorsement

Drake Hub: Current Features and Upcoming Enhancements

Thu, 04 Sep 2025 13:52:06 -0400

We’re making it a priority to keep you informed about the latest updates and what’s ahead. Here are a few highlights to keep you up to speed.

If you’re still getting familiar with Drake Hub, check out our previous webinar for a full overview of how it works and visit our recent Knowledge Base Articles.

Watch the Recorded Webinar here

Knowledge Base Articles & Resources:

These resources cover the ins and outs of Drake Hub, along with answers to top questions that we received during the webinar.

What's new? Drake Workflow

We've built Drake Workflow—a new automation suite designed to simplify the way tax offices work, collaborate, and stay on top of every return.

During filing season, efficiency isn’t just nice to have—it’s essential. We heard from tax professionals that they wanted three things:

Real-time visibility into client and return status
Fewer manual steps between tasks
Integrated tools that truly work together

Drake Workflow was designed to deliver on all three.

How Drake Workflow Helps You Stay on Track

Drake Workflow connects your favorite Drake Software tools — including Drake Tax®, Drake Portals®, Drake E-Sign, Drake Pay^TM, and Drake Tax Online^TM — so your office can work smarter, not harder.

Here’s what you can expect:

Automatic status updates – Returns update themselves as you work, so you’re always looking at the latest info.
Smart task routing – Tasks flow to the right person at the right time, with flags for anything that needs attention.
A clear dashboard view – See where every client stands at a glance, without searching or second-guessing.
Simple team controls – Assign tasks, update statuses with drag-and-drop, and even track payments—all from one place.

Instead of piecing things together across multiple systems, everything just works.

When You Can Try Drake Workflow?

Drake Workflow is now available in beta on September 16. If you’re ready to simplify your workload and give your team more visibility this tax season, you’ll want to take advantage of it.

Learn more and stay updated here: Drake Workflow

Check back soon — we’ll be updating with more details as they’re ready.

Live webinar session Thursday, September 18 at 2pm EST.

Whether you’re already using Hub or just getting started, this webinar will show you what’s coming soon — and how these tools can make your practice run more smoothly. Register here

It’s Back-to-School Season: Help Clients with Tax Tips and Education Credits

Wed, 27 Aug 2025 15:06:53 -0400

Two of the most widely used credits — the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) — may offer significant opportunities to reduce a client’s federal income tax liability.

This article provides an overview of these credits, including qualified expenses, income limits, institutional reporting requirements, and common filing issues — so you can better support your clients this back-to-school season and beyond.

1. American Opportunity Tax Credit (AOTC)

The AOTC is a partially refundable credit available for up to four years of postsecondary education.

Key Features:

Maximum credit: $2,500 per eligible student
40% refundable (up to $1,000)
Covers tuition, required fees, and course materials, including books and supplies
Student must be enrolled at least half-time in a degree or credential program
Credit phases out at MAGI:
- $80,000–$90,000 (single)
- $160,000–$180,000 (married filing jointly)

2. Lifetime Learning Credit (LLC)

The LLC is a nonrefundable credit aimed at part-time students, graduate students, or those seeking to gain or improve job skills.

Key Features:

Maximum credit: $2,000 per return (20% of the first $10,000 in expenses)
Available for any number of years
Covers tuition and required fees, but not books or supplies unless required
No enrollment minimum—available even for one course
Income phase-out:
- $80,000–$90,000 (single)
- $160,000–$180,000 (MFJ)

3. Qualified Education Expenses

It’s critical to distinguish between allowable and disallowable expenses:

Allowable	Disallowable
Tuition	Room and board
Required enrollment fees	Insurance
Required books/supplies (AOTC)	Transportation
Course materials (if required)	Health fees, personal expenses

Note: For AOTC, books and supplies can be claimed even if not paid directly to the institution, as long as they are required for coursework.

4. Institutional Reporting Requirements

To claim either credit, the taxpayer must have received a Form 1098-T from an eligible educational institution.

Institutions must report payments received (Box 1) for qualified tuition and related expenses (QTRE)
Box 1 may include amounts paid by third parties (e.g., grants, scholarships)
Form 1098-T must also include the student’s TIN (Taxpayer Identification Number)

Encourage clients to verify the accuracy of their 1098-T forms early in the season to avoid delays or disallowed credits.

5. Filing the Credit on Form 8863

Both credits are claimed using IRS Form 8863, which is built into Drake Software’s tax prep system. Errors on this form are common and can lead to:

IRS rejections or audits
Delayed refunds
Future year disqualification due to improper claims

Common Errors to Watch For:

Missing or incorrect TINs
Claiming AOTC for more than 4 years
Incorrect expense classification
Overstating Box 1 payments

Drake Software includes validation checks to help prevent these errors and supports electronic filing of Form 8863 with detailed audit trails.

6. Looking Ahead: The “One Big Beautiful Bill Act” and Education Policy Changes

While the AOTC and LLC remain the foundation of federal education tax benefits, proposed legislation like the One Big Beautiful Bill Act may introduce significant changes for tax professionals to monitor. This wide-reaching bill includes provisions that could expand employer-sponsored education benefits, enhance loan forgiveness tax exclusions, and simplify reporting requirements for both students and institutions.

Stay informed so you can adjust planning strategies if these reforms are enacted —particularly for clients with student debt or employer education benefits.

Help your clients get ahead.

Read out next blog post about The One Big Beautiful Bill Act.

Proactively support your clients with a pre-season checklist (URL to checklist) designed to prevent delays and reduce filing pressure.

Drake Software Shines in 2025 NATP Software Survey

Tue, 26 Aug 2025 15:39:33 -0400

Each year, the National Association of Tax Professionals (NATP) surveys its members to evaluate the industry's leading tax software providers. The 2025 NATP™ Software Survey results are in — and once again, Drake Software has earned standout marks across a wide range of categories, reinforcing its reputation as a trusted choice among professional tax preparers.

What Does This Survey Measure?

The NATP Software Survey evaluates key areas that matter most to tax professionals, including:

Ease of use
Customer support
Value for cost
Accuracy of calculations
Integration capabilities
E-filing efficiency
Overall satisfaction

Thousands of NATP members share their experiences with the software they use daily — offering one of the industry’s most credible barometers of professional tax software performance.

2025 Drake Software Highlights

Drake Software® delivered strong performance across the board in the 2025 survey. Key highlights include:

Top ratings in overall satisfaction, value for cost, and customer support.
Continued strength in e-filing functionality and calculation accuracy.
Improved scores in integration and usability — two categories that matter more as firms expand digital workflows.

Why Does This Matters For Tax Professionals?

Choosing the right tax software impacts everything from accuracy and client satisfaction to profitability. NATP’s annual survey (waiting for survey URL to be announced) offers an unbiased, practitioner-driven look at how software solutions perform under pressure.

Drake’s continued top-tier performance is a signal to new and returning customers that the company remains committed to excellence, innovation, and responsive support.

Looking Into The Next Tax Season

As the 2026 tax season approaches, Drake Software will continue listening to its customers and building solutions that help preparers serve clients efficiently, accurately, and confidently.

If you’re looking for a dependable, full-featured tax software backed by real-world results, Drake Software is a name you can trust—just ask the pros who use it every day.

Discover how Drake Software can help simplify your workflow and maximize efficiency this tax season. Contact our sales team or sign up for a free trial.

You can access the full NATP Tax Software Survey results. Please note that Drake Software is independent of the National Association of Tax Professionals (NATP).

DISCLAIMER Download requires submission of contact information and consent to receive marketing messages. This offering does not allow returns to be printed or e-filed. Offer subject to change. Additional terms and conditions may apply.

Beware of Unauthorized Drake Software Offers: How to Stay Protected

Tue, 26 Aug 2025 11:55:29 -0400

Recently, one of our valued customers reported receiving a suspicious call from an unfamiliar number offering a "discounted" version of Drake Software. We want to make it absolutely clear: this offer was not legitimate.

Here is how to stay informed and protected:

Avoid Third-Party Software Offers

If you receive unsolicited emails, calls, or messages offering discounted or promotional Drake Software from sources you do not recognize, treat them as potential scams. These fraudulent offers can expose your firm to serious risks, including:

-Malware or ransomware embedded in unofficial downloads

-Theft of sensitive client data

-Financial fraud or identity theft

Scammers often disguise themselves as "authorized resellers" to gain your trust. Drake Software does not sell or distribute licenses through third parties.

Official Ways to Buy or Renew Drake Software

To ensure you’re purchasing from a legitimate source, only use the following official channels:

-Website: www.DrakeSoftware.com

-Phone: Call our official line at 800.890.9500

-Email: Reach out through verified company emails ending in @drakesoftware.com

-Sales Representative: Contact your assigned Drake Software representative

Pro Tip: Always double-check URLs and caller ID. If in doubt, call our official number to verify any offer or message.

How Drake Software Protects You

We take security seriously. Drake continuously monitors threats targeting tax professionals and proactively works to shield our customers from fraud. Here’s how we help:

-Scam Alerts: We’re adding scam alerts directly in the application

-Secure Renewal Process: Drake Software’s website and Drake Portals provide TLS encryption

-Dedicated Support: Our customer service team is trained to help you verify offers and avoid suspicious contacts

Stay Connected and Informed

If you suspect you've been targeted by a scam or want to confirm the legitimacy of any Drake Software offer, contact us immediately at 800.890.9500. We're here to help you stay secure and focused on your clients.

Don’t risk your data or your business. Only trust official Drake Software channels.

Drake Hub is Here

Fri, 15 Aug 2025 16:10:11 -0400

Here’s what you need to know about this update and how it benefits your workflow.

What is Drake Hub?

When logging in, you'll now land on the Home tab of Drake Hub — your new control center for navigating the tools and tasks you use every day. This page provides a snapshot of your recent client activity, shortcuts to essential features, and centralized access to your apps and staff management.

What Hasn’t Changed?

While the login experience is new, many things remain the same:

Your login credentials and user permissions are unchanged.

You’ll still find support content and User Manager features.

Any existing bookmarks to Support.DrakeSoftware.com or User.DrakeSoftware.com will still work.

Key Features of the New Drake Hub

Drake Hub is organized by intuitive tabs to help you manage your practice more efficiently:

Home Tab

Your new launchpad, featuring:

Recently accessed clients

Quick links to common actions

Easy navigation to other areas of the Hub

Apps Tab

Open any Drake Software application you're licensed for in one click.
Learn more: Using the Apps Tab

Clients Tab

View and manage both tax and non-tax clients with built-in shortcuts to frequently used tasks.
Learn more: Working with Clients

Staff Tab

Formerly part of User Manager, this tab lets you:

Add or deactivate staff

Edit user access to applications and clients
Learn more: Managing Staff Access

Support, Reports, and My Drake Software Menus

These sections will take you to familiar pages on Support.DrakeSoftware.com for further navigation.

Here are some helpful resources on Drake Hub

Get a guided tour of the new interface by watching the Drake Hub Overview video and exploring these Knowledge Base articles:

Webinar: Coming Soon - Streamline Your Practice with New Workflow Tools

>Register

The Smart Tax Pro's Guide to Building and Marketing a Thriving Practice

Thu, 07 Aug 2025 14:00:19 -0400

Get your copy of The Smart Tax Pro’s Guide to Building and Marketing a Thriving Practice

Are you a tax professional looking to grow your client base, retain loyal customers, and make your firm stand out—without sacrificing time with your clients?

We’ve got the perfect resource for you. Introducing The Smart Tax Pro’s Guide to Building and Marketing a Thriving Practice —a new, easy-to-use guide crafted specifically for today’s tax pros.

This comprehensive digital resource compiles proven strategies and practical tools into a streamlined playbook for strategic growth.

What You’ll Learn

This guide includes practical, actionable strategies for:

Implementing AI in your tax workflow
Boosting visibility through email marketing and local SEO
Engaging clients during the off-season
Managing referrals, reviews, and online reputation
Creating exceptional client experiences (even with tough clients)
Optimizing your website and social media presence

Whether you're a seasoned tax preparer or just launching your own practice, this guide provides the insights you need to succeed in today’s competitive landscape

Download the full guide today!

How the Reconciliation Process Impacts 2025 Tax Law

Tue, 05 Aug 2025 16:54:50 -0400

As the 2025 tax season approaches, tax professionals should keep a close eye on Congress — especially when lawmakers pursue sweeping tax reform using a powerful legislative tool: the reconciliation process. Commonly used to sidestep Senate filibusters, this fast-track mechanism could be the engine behind significant updates to the tax code.

What Is the Reconciliation Process?

Reconciliation allows Congress to expedite budget-related legislation. In the Senate, instead of needing the usual 60 votes to break a filibuster, reconciliation bills can pass with just a simple majority — 51 votes. Debate is also capped at 20 hours, streamlining the process and giving the majority party a chance to advance legislation without bipartisan buy-in.

Key Aspects of the Reconciliation Process

The reconciliation process offers several strategic advantages for lawmakers. It allows legislation to pass the Senate with just 51 votes, avoiding the 60-vote threshold typically required to overcome a filibuster. Debate time is limited to 20 hours, which helps prevent procedural delays and keeps the process moving swiftly. Additionally, if one party controls both chambers of Congress, it can pass legislation without needing bipartisan support.

Debate and amendments are tightly restricted, limiting discussion. The Byrd Rule can remove provisions that don’t have a direct budgetary impact, narrowing the scope of what can be included in the bill. Finally, the party in control bears full political responsibility for any unpopular outcomes, since they alone push the legislation through.

The Byrd Rule and “Byrd Bath”

Named after Senator Robert Byrd, this rule bars “extraneous” measures from reconciliation bills. That means anything that doesn’t directly affect the federal budget — or impacts Social Security — is subject to removal during a detailed review process known as a “Byrd Bath.”

Key triggers that can get a provision removed include:

No budgetary impact
Jurisdictional overreach
Increase in the deficit beyond the budget window
Social Security-related changes

What Tax Pros Should Expect in 2025

The reconciliation process has been used to address numerous tax policies in the One Big Beautiful Bill Act (OBBBA).

Permanent Extension of 2017 Tax Cuts
Increased SALT Deduction Cap
Enhanced Child Tax Credit
Senior Deduction
R&D Expensing Reinstated

For more information on these changes, see our blog post covering the OBBBA.

Strategic Implications for Tax Professionals

With major legislative changes in place, tax pros should start preparing now to answer client questions and adjust for new tax policies.

Plan for TCJA expirations. Model different scenarios for both individual and business clients
Stay flexible. Resources and IRS guidance may lag legislation, so prepare for rapid shifts
Monitor reputable sources. Track developments from Congress and the IRS closely
Advise proactively. High-income and business clients may be especially impacted and should consider mid-year strategy sessions

Want a deeper dive? Read more about staying prepared for legislative changes in 2025.

The reconciliation process has already been used as a vehicle for significant tax reform in 2025. As the legislative picture sharpens, tax professionals will need to translate policy into strategy for their clients quickly and confidently.