How Product Leaders at Banks and Fintechs Can Help SMBs Survive Next Tax Season

Across the country, small business owners are winding down from a familiar nightmare: late nights at the computer sorting through scattered receipts and spreadsheets ahead of the federal tax deadline.

But what if tax season wasn't an annual ordeal for your SMB customers? What if, instead of dreading April, small business owners, bookkeepers, and finance leaders saw it as just another month—one where they could focus on strategic growth initiatives, product innovation, and market expansion?

For product leaders at banks and fintechs, helping small businesses transform tax season into a seamless experience isn't just a hypothetical—it's a reality you can achieve by offering tax capabilities directly within your platform.

The Cost of Tax Season Is Rising for SMBs

Cornerstone Advisors research has found that small businesses spend up to a fifth of their revenue on disconnected accounting services. And the premium for these services is rising. A National Society of Accountants survey reveals a 10–30% increase in tax preparation fees between 2020 and 2023. 

Forty percent of accounting firms surveyed planned on hiking tax preparation fees by at least 10% before the end of 2023. This upward trajectory is likely to continue as everyday prices climb (afterall, accountants also need to buy eggs).

For small businesses already operating on thin margins, rising tax preparation costs—combined with broader economic pressures—create an urgent need for more cost-effective accounting solutions. This opens a prime opportunity for banks and fintech platforms to step in with integrated tax capabilities that can deliver year-round value to their SMB customers.

Why Do Traditional Tax Solutions Fall Short for Small Businesses?

Today's small businesses face a fundamental problem: their tax management tools exist in isolation from their day-to-day financial operations. A typical SMB might use QuickBooks for bookkeeping, spreadsheets for expense tracking, and yet another service for tax filing. 

This fragmentation creates three central challenges:

1. Lost productivity: Business owners waste valuable hours manually moving data between systems—time they could spend growing their business.
2. Increased risk: Each manual data transfer creates opportunities for errors, leading to compliance issues and missed deductions.
3. Limited visibility: Without integrated systems, SMBs can't access real-time tax insights to guide strategic business decisions.

The current state of SMB tax management is more than just expensive and labor-intensive—it keeps small businesses from reaching their actual growth potential.

Embedding Tax Capabilities Within Financial Solutions Can Help 

Far beyond basic calculation engines, today's tax solutions have evolved to deliver intelligent automation that streamlines the entire tax management process.

These modern solutions can automatically categorize transactions, identify potential deductions, monitor depreciation, and maintain audit-ready documentation—all from within an SMB's existing financial platform through income tax APIs.

This integration is part of a broader trend called embedded accounting, where banks, fintechs, and software providers incorporate accounting services directly into their platforms. By embedding tax capabilities, these platforms transform tax management from a seasonal chore into a year-round advantage.

Here’s how banks and fintechs with embedded tax solutions are revolutionizing SMB tax and revenue management:

A Single, Familiar Platform for All Financial Needs

Embedded tax solutions allow small businesses to manage their taxes through platforms they already use and trust. No more juggling multiple logins or learning new systems. Instead of adding another tool to the pile, all tools and data exist in one secure place. As a result, tax management becomes a natural extension of daily financial operations.

Real-Time Tax Intelligence

When tax capabilities are embedded directly into financial platforms, small businesses gain immediate tax insights with every transaction. They can receive automated calculations, instant tax estimates, and intelligent identification of potential deductions and credits without leaving their primary financial platform. 

Embedded solutions can automatically calculate quarterly payment requirements and deliver real-time notifications about tax obligations. That means companies can stay prepared and compliant throughout the year, without the need to access separate tax software.

Automated, Error-Free Tax Processing

Embedded tax solutions eliminate the need for manual data entry and system switching. Instead, banks and fintechs serve as a single source of truth for all their customers’ financial and tax-related operations, automatically handling both federal and state tax requirements. 

With embedded tax filing tools, small businesses can instantly populate pre-filled tax forms, including forms 1120, 1120-S, 1065, and 1040 Schedule C. This automation eliminates human error and ensures accurate, consistent tax reporting.

Enterprise-Grade Security Without Enterprise Costs

SMBs who perform accounting functions on a platform owned by a financial service provider get bank-level security features—like SOC 2 auditing and systemic encryption—protecting their sensitive tax information. These robust security measures, typically available only to large enterprises, come pre-built into their existing financial platform. 

Easier Access to Business Financing

With integrated financial data, small businesses can more easily qualify for loans and other financial products. Their complete financial picture—including tax history—is already available to their financial provider, streamlining the approval process.

Year-Round Tax Optimization

Perhaps most importantly, these integrated solutions transform tax management from an annual event into an ongoing process. The system continuously monitors a business's tax position, helping owners and managers make strategic decisions about timing expenses and recognizing revenue. Tax-saving opportunities are identified early, while audit-ready documentation is maintained throughout the year. As tax regulations change, platform updates are made automatically.

The Future of SMB Tax Management Is Already Here

Embedded tax solutions have the power to fundamentally change how small businesses approach tax management. Product leaders at banks and fintechs eager to innovate in this realm should understand two things: 

1. The demand exists
2. So does the technology

Today’s small business owners are already seeking simplified financial solutions. It’s why two-thirds of SMBs (66%) say they want their existing software platforms to offer checking accounts—and more than one-third are interested in accessing additional services through the same platform. 

Transform SMB Taxes With Embedded Accounting By Tight

Tight helps banks and fintechs transform small business tax preparation from a dreaded annual ordeal into a seamless year-round process. Our comprehensive embedded accounting API delivers tax efficiencies and benefits like:

• Automated calculations and filing for all major tax forms
• Real-time tax estimates and planning tools
• Automatic updates for changing tax regulations
• Enterprise-grade security and compliance
• Native experiences customized to your platform

Best of all, Tight enables busy product leaders at banks and fintechs to launch tax solutions in weeks, not months—all without investing extensive development resources. We work with you to offer your SMB customers the transparent accounting tools they need, delivered through a provider they trust (you!). 

Don't Let Your SMB Customers Face Another Tax Season Alone

Your SMB customers shouldn’t have to confront next tax season with outdated tools. Learn how Tight can help your bank or fintech become the go-to financial solution small businesses are looking for.