Tax preparation outsourcing 101: Pros, cons and top companies
Has tax season ever been anything but stressful for business owners? Managing complex tax laws, ensuring compliance, and meeting deadlines requires expertise, time, and precision.
Enter outsourced CPA services: a solution designed to simplify your workload while maintaining accuracy, ensuring data security, and saving on costs.
In this guide, we’ll explain everything you need about tax preparation outsourcing—its benefits, challenges, and the best tax outsourcing companies to consider in 2025. Whether you’re a small business looking for back-office tax solutions or a firm exploring bookkeeping and tax outsourcing, we’ve got you covered.
What is tax preparation outsourcing?
Outsourcing CPA tasks involves entrusting your tax-related tasks to external professionals specializing in tax preparation. This strategic move allows businesses to focus on their core operations while ensuring that their tax obligations are handled with precision and up-to-date knowledge.
Common services offered include:
Tax filing support services: Comprehensive preparation and submission of tax documents, ensuring they meet all regulatory standards
Tax audit preparation services: Assistance in tax document management to navigate audits with confidence
Tax compliance services: Ensuring adherence to the latest tax laws to minimize risks and maintain legal standing
Strategic tax planning: Developing forward-thinking strategies to optimize financial outcomes and reduce liabilities
Tax return preparation: Detailed preparation of accurate tax returns to ensure timely filing and compliance
Remote tax preparation has become the norm in today's dynamic accounting landscape. It offers businesses access to specialized expertise, enhances efficiency, and ensures compliance with ever-evolving tax laws.
Benefits of tax preparation outsourcing
Why should you consider outsourcing your tax preparation? Let’s explore the top benefits of tax outsourcing.
Cost savings
Outsourcing your tax preparation offers substantial financial benefits. Here’s how:
Lower operational costs: Maintaining a full-time, in-house tax team can be costly. Full-time bookkeepers in the U.S. usually make around $45,000 per year. Outsourcing eliminates the need for additional salaries, training, and infrastructure, reducing overhead significantly.
Avoid costly errors: Filing mistakes can result in steep IRS penalties and interest. Professional outsourcing ensures accurate tax returns, helping you avoid financial pitfalls and maintain compliance.
Time savings: With tax experts managing the process, your team can focus on growing your business rather than navigating tax complexities, translating to long-term financial gains.
Access to expert knowledge
Tax professionals bring specialized expertise to the table, offering invaluable guidance for businesses of all sizes.
They are adept at:
Navigating intricate tax laws and ensuring compliance with ever-changing regulations
Identifying eligible rebates and deductions to help you maximize savings
Developing tailored strategies for minimizing liabilities and optimizing your financial outcomes
Expert tax preparers also provide proactive advice to anticipate and mitigate future challenges, allowing companies to focus on growth and success.
Increased efficiency
Time is of the essence during tax season. Tax season outsourcing ensures your business stays ahead of deadlines and avoids costly penalties.
By relying on tax prep solutions, you can:
Speed up tax filing processes with expert precision, ensuring timely and accurate tax returns
Prevent delays caused by inexperience or staffing shortages, ensuring your financial operations run smoothly during the most crucial time of year
Free up internal resources, allowing your team to focus on core priorities rather than getting bogged down in compliance tasks
Outsourcing tax returns streamlines these processes, providing peace of mind throughout the busy tax season.
Risk mitigation
Data security and compliance are critical in tax preparation. Secure tax outsourcing providers offer comprehensive safeguards to protect your financial information.
These measures include:
Advanced encryption and secure data handling: Utilizing the latest technology to prevent unauthorized access and breaches
Adherence to regulations: Ensuring strict compliance with national and industry-specific standards; for example, if your business must comply with HIPAA, your tax preparation outsourcing partner—as a potential ‘business associate’—may need to as well
Reduced risk of data breaches: Implementing proactive strategies to safeguard sensitive data against cyber threats
Tax outsourcing services invest heavily in these security protocols, providing businesses with confidence and peace of mind while navigating the complexities of tax preparation for small businesses.
Challenges with tax preparation outsourcing
While outsourcing offers numerous benefits, it also has challenges. Here are a few and how to address them.
Communication barriers
Accounting outsourcing during the busy tax season can present unique communication challenges. Misunderstandings could arise from different time zones, inconsistent updates, or unclear expectations. Just one of these can delay progress and disrupt operations.
More importantly, if you reach out to potential outsourcing partners after tax season has already begun, many may struggle to reply or begin working on your filings in a timely manner.
To address these barriers effectively:
Ensure tax preparation partners reply promptly: Contact your preferred partner well in advance, but take note of their response times—and how they reply. Do they make you feel like a priority client in all dealings or just another name on their tax season to-do list?
Establish clear communication channels: Use shared tools like project management platforms and cloud-based document sharing to ensure real-time updates and accessibility.
Schedule regular check-ins: Organize weekly or bi-weekly meetings to clarify expectations, address concerns, and stay on track with deadlines.
Set expectations early: Clearly define roles, timelines, and deliverables in the initial stages to avoid confusion.
Appoint a point of contact: Assign a dedicated team member to streamline communication, ensuring a consistent flow of information and quicker issue resolution. Your tax preparation partner should do the same—assigning an experienced professional with whom you'll interact consistently (rather than someone who hands over your account to their less-experienced associates).
By implementing these strategies, you can foster strong collaboration and achieve seamless coordination with your outsourced tax preparers.
Security and privacy concerns
Entrusting sensitive financial data to a third party can feel daunting, but with the right approach, you can confidently address these concerns.
Safeguard your information with these tips:
Choose providers with strong privacy policies: Partner with CPA firms emphasizing clear, robust protections for sensitive data.
Verify compliance with industry standards: Ensure providers adhere to strict regulations to maintain the highest levels of security.
Conduct regular audits: Routine evaluations help verify that your outsourcing partner’s practices remain secure and compliant, offering ongoing peace of mind.
Partnering with a trusted accounting firm ensures you can effectively navigate complex data security challenges while maintaining operational efficiency and peace of mind.
Loss of control
Outsourcing can raise concerns about maintaining quality control and compliance standards, but these worries can easily be managed with the right steps.
Here’s how:
Define roles, responsibilities, and quality benchmarks in your contracts so all parties are on the same page
Check deliverables regularly to ensure they meet agreed-upon standards, creating a transparent partnership
Maintain ongoing conversations to address any issues quickly and stay aligned with your goals
Employ tracking tools and dashboards for real-time updates, keeping efforts on track and compliant
Implementing these strategies lets you control outcomes and compliance fully while delegating critical tasks.
How to outsource your tax preparation
Ready to outsource your tax preparation? Follow these steps for a seamless experience.
1. Assess your needs
Assess which specific tax services your business needs to ensure a smooth and effective outsourcing experience.
Consider the following factors:
The complexity of your tax filings: Evaluate whether your business has unique filing needs or intricate tax obligations.
Your compliance and auditing needs: Identify requirements for adhering to tax laws and managing potential audits.
Additional services, like year-end tax planning or resolution: Explore options for proactive planning or addressing existing tax challenges so that all aspects of your tax needs are met with precision and clarity.
2. Research potential outsourcing partners
When selecting tax preparation firms that align with your needs, be sure to check for these criteria:
Positive reviews and testimonials: Seek client feedback to gauge the provider’s reliability and customer satisfaction.
Industry experience and certifications: Check that the company has a proven track record and credentials that reflect its expertise.
Robust security protocols: Verify their commitment to safeguarding sensitive data with advanced protections and compliance with industry standards, offering you peace of mind.
3. Interview potential outsourcing partners
Scheduling consultations provides an opportunity to evaluate expertise and build trust.
Asking these questions is crucial:
What’s your experience with businesses in my industry?: Assess their familiarity with your sector to gauge how well they understand your unique needs.
What’s your Preparer Tax Identification Number (PTIN)?: The IRS tax preparation services standards require all tax professionals who prepare filings for compensation to maintain a valid PTIN.
How do you handle data security?: Explore their strategies for protecting sensitive information and ensuring compliance with relevant industry regulations.
What is your process for addressing errors or discrepancies?: Clarify how they resolve issues proactively, ensuring accuracy and accountability at every partnership stage.
4. Finalize contracts
A well-defined contract sets the stage for a successful partnership.
Make sure it covers these essential elements:
Scope of work and timelines: Clearly outline the responsibilities and deliverables and incorporate tax deadline outsourcing solutions to establish mutual accountability.
Confidentiality and data handling agreements: These agreements should include robust clauses to safeguard sensitive financial information and ensure compliance with data protection standards.
Pricing and payment terms: Define transparent cost structures and payment schedules to prevent misunderstandings and maintain trust throughout the partnership.
5. Begin onboarding
Provide your outsourcing partner with the necessary information and tools to foster a smooth onboarding process.
During this critical phase:
Establish communication protocols: To streamline communication and avoid misunderstandings, agree on channels, the frequency of updates, and points of contact.
Set up secure access to your financial data: Ensure your partner has the credentials and tools needed for seamless collaboration while maintaining strict data security protocols.
Schedule regular progress updates: Arrange consistent check-ins to review progress, address questions, and confirm alignment on goals and expectations throughout the partnership.
Top outsourced tax preparation companies in 2025
With all this information, you can feel confident about outsourcing your tax preparation to the company that best suits your needs. Here’s a look at some of the top companies in 2025 to consider.
Pilot
Strengths: Comprehensive bookkeeping and tax preparation services
Best for: Startups and small businesses needing tailored financial solutions
Unique features: Expertise in compliance and strategic guidance
QuickBooks Live
Strengths: Real-time support integrated with QuickBooks software
Best for: Businesses already using QuickBooks for accounting
Unique features: Personalized assistance and easy software integration
Gusto
Strengths: Payroll-focused services with tax compliance support
Best for: Small to medium-sized businesses seeking payroll and tax solutions
Unique features: Comprehensive employee benefits management
Xero
Strengths: Cloud-based accounting software with robust tax capabilities
Best for: Companies seeking all-in-one accounting solutions
Unique features: User-friendly dashboards and seamless collaboration tools
Archer Lewis
Strengths: Personalized, relationship-driven tax preparation services
Best for: Small business owners prioritizing clarity, trust, and communication
Unique features: Tailored solutions with a focus on customer-centric service
Ready to outsource your small business’s tax preparation?
Tax preparation outsourcing offers numerous benefits, from cost savings and expert guidance to enhanced efficiency and risk reduction. By partnering with a trusted provider like Archer Lewis, you gain a reliable ally in navigating the complexities of tax season.
Learn more about Archer Lewis’s small business tax preparation services. Let us handle the numbers so you can focus on growing your business.