Canopy to begin beta testing professional tax prep software

Canopy, a provider of cloud-based practice management software for tax professionals and accountants, is continuing to develop its professional tax preparation software, with an eye toward beta testing it this tax season and selling it this summer in time for next tax season.

Canopy originally disclosed plans for the software last November, but is releasing more details now (see Canopy plans cloud-based tax prep software). The cloud-based software will integrate with the company’s existing Practice Management, Transcripts, Notices and Tax Resolution systems. Among the planned features, the system is expected to group all the tax forms and schedules into user-friendly categories to make it easier to navigate and prepare returns. A Quicklook feature will answer contextually-related questions within different federal and state tax forms, giving users access to questions related to the topic they’re working on so they don’t have to switch back and forth between sections or revisit topics again.

Hotkeys will allow users to work with familiar keyboard shortcuts, even in the cloud. Taxpayer review and authorization will be part of the workflow to streamline the client review and sign-off process online. Tax preparers will be able to securely deliver tax forms for client review and collect e-signatures for the federal Form 8879 and state authorization forms.

Courtesy of Canopy

Users will be able to automatically collect client bank account information and facilitate payments and refunds. After reviewing tax documents in the client portal, clients will be able to designate which accounts to use and enter their banking details directly.

“We’ve secretly been building tax prep for a number of years now,” Canopy CEO Kurt Avarell told Accounting Today. “We have a pretty significant team of CPAs who are actually in-house at Canopy in our headquarters in Utah who have been building out the rules, federal and state, for the individual 1040. What’s a differentiator is it’s all native cloud.”

Canopy recently moved its headquarters into a bigger office in Levi, Utah, to accommodate all the development, with support from the governor’s Office of Economic Development.

In March, Canopy also plans to offer a mobile app that will integrate with the tax prep and practice management systems in the cloud. “You’ll be able to do work on the move, whether you’re in front of your computer or you’re out at your kid’s soccer game and you just need to check on the status of a project or a tax return,” said Avarell. “All of that will be seamlessly connected. We think that is a huge step forward in the way that most accountants do taxes. Then, over time, data will start to flow into that tax return, and we’re starting to work with partners on getting data that sits out in all these different places, like W-2 income and 1099 income, and having that income flow into the tax return. It just makes the whole process much more seamless, for both the practitioner as well as the taxpayers.”

Canopy has already signed up many of its existing users to start testing the software this season, “There are already a lot of accountants who have signed up to prepare returns in beta,” said Avarell. “Everybody is excited to have some new technology, We’ll start selling it in the spring and the summer for the next tax season. It will be available for use next January, which will be the 2019 tax year.”