How to build a Tax Preparation App Like TurboTax?
Tax preparation software is one of the crucial tools that is currently dominating the digital world, especially in countries with complex tax systems. These software are often delivered as Software as a Service (SaaS) and have gained immense popularity due to their convenience and efficiency. SaaS-based tax preparation software empowers individuals and businesses to navigate the complexities that are associated with tax compliance and file their taxes with ease via the Internet.
Now, one of the famous tax preparation software that is currency dominating the FinTech space is TurboTax. The software is backed by a user-friendly interface that makes way for accuracy in calculations, offering real-time updates on tax laws and data security. This makes the tax filing process more accessible and efficient for the users.
In addition to this, it accelerates processing, offers audit assistance, integrates with other financial software, and provides educational resources. Its cost-effectiveness and electronic filing options further contribute to its growing popularity.
According to Fortune Business Insights, the global tax management software market size is expected to grow from $ 15.89 billion in 2023 to $ 38.49 billion by 2030, witnessing a CAGR of 13.5%. The increasing market size can be attributed to the increasing volume of financial transaction data by the organizations and the vital need for advanced platforms to create and manage everything related to tax, audits, payments, etc.
Thus, if you, too, wish to empower your financial business and streamline your tax processing measures, it is the right time to partner with a dedicated FinTech app development company that can help you build a tax preparation software similar to Turbo Tax while streamlining all the other managerial constraints.
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Exploring TurboTax Tax Preparation Software
TurboTax is a Software as a Service (SaaS) tax preparation app that enables users in the United States and Canada to electronically file their taxes. This financial tool generates revenue by offering subscriptions for premium products and services. The core software offered by the app is free for use. The software was developed in 1984 by the parent firm TurboTax and was later acquired by Intuit in 1993 for $225 million.
TurboTax provides a range of tax preparation tools tailored for multiple user categories, including employees, investors, rental property owners, freelancers, and small business owners. To facilitate tax filing, it offers varied resources, including calculators, reform information, tips, and instructional videos.
The platform can be accessed via CD for offline use or through the company’s website, along with mobile apps compatible with Android and iOS devices. Currently, TurboTax is one of North America’s premier tax management applications.
Comprehending the TurboTax Business Model
TurboTax adopts a business model backed by a freemium approach, where the majority of its functionality is accessible for free. This approach serves two primary purposes:
It encourages users to upgrade to premium versions for enhanced features as their tax situations become more complex. It familiarizes users with the platform, making them well-equipped to handle more intricate tax scenarios.
TurboTax offers three premium versions for purchase, namely Deluxe, Premier, and Self-Employed. Each of the listed premium models caters to specific tax needs. Customers need to pay a one-time fee that may range from $60 to $120 at the time of tax filing. Premium versions provide advanced capabilities, such as reporting investment income from bonds, stocks, cryptocurrencies, and more.
For users seeking expert assistance, TurboTax also offers access to dedicated professionals. The level of access to these experts varies across the premium versions, with features including the ability to consult with a professional during the tax preparation process, guides for understanding the process, and a review of final filings. This approach allows TurboTax to accommodate a wide range of tax situations while generating maximum revenue from both premium software sales and expert assistance services.
Steps to Build a Tax Preparation App Like TurboTax
Developing a tax preparation app involves a well-structured approach. Here are ten steps to guide you through the process efficiently:
Initiate with Local Testing
Begin by researching and testing your concept in your local market to identify and correct any shortcomings. This allows you to gain control over various aspects of developing the software, such as logistics, training, marketing, and app updates.
Conceptualize Your App
Make sure that you have an original idea and concept for your tax preparation app. They must be able to differentiate and stand out from the competitors. These measures may include underlying the steps to identify the unique functionalities, the core idea behind the app, and the value it offers to the users as well as your business.
Identify Your Target Audience
Understand your target audience’s demographics, behavioral trends, and needs. Create user personas to tailor your app to their preferences and requirements.
Create a Strategy for Development
Develop a business plan that outlines your app’s goals, user acquisitions, and revenue expectations. Consider all the constraints and scenarios to determine your budget for building a Minimum Viable Product (MVP)
Select a FinTech App Development Firm
Choose a skilled and professional app development firm that aligns with your project’s goals. Consider factors like their hourly rate of development, their overall expertise in the domain, their communication skills, etc. For instance, if you also wish to avail of digital wallet app development within your tax preparation app, the overall cost, features, and tech stack will vary, depending on the initial requirements.
Discovery Phase
In collaboration with your desired app development company, conduct a discovery phase where the functional characteristics of your app are determined. This phase results in a well-crafted UI/UX design, which further acts as a crucial foundation for app development.
Development Phase
Commence the development process, which can vary in duration based on the complexity of your app. Regularly test for performance issues to ensure optimal user experience.
Define Your Pricing Strategy
Carefully decide on your pricing strategy for the app and keep in mind the existing competition. Overcharging can usually stray the users away, while underpricing can undermine your efforts.
Perform Ongoing Maintenance and Support
Plan for ongoing maintenance to ensure your app remains effective. Consult with your app development provider to organize maintenance and support services.
Summing Up
Recognizing and catering to your tax preparation app’s target audience is a crucial step in the development process that empowers the overall ROI. By thoroughly understanding your users’ requirements, you can enhance your app and deliver a superior final product.
Partnering with a dedicated FinTech app development firm is invaluable during this journey. Such collaboration can offer you access to a pool of top-tier talent, ensuring that your app benefits from the expertise and experience necessary to thrive in this competitive financial technology ecosystem.
