For most small practices, buy practice software first and use ChatGPT only for text. TaxDome suits firms wanting one client portal and pricing by client, with up to 20 staff included; Canopy suits firms wanting AI return preparation on every plan, if they budget per-client credits. No tool should see return data until your Section 7216 position is settled.
These are three different kinds of product, so a feature-by-feature table misleads. TaxDome and Canopy are practice platforms with AI built into intake, documents and return preparation. ChatGPT is an assistant that knows nothing about your clients unless you paste something in. Their AI price models also differ more than their feature lists: a flat monthly add-on at TaxDome, per-client credits and partner subscriptions at Canopy, and a flat chat seat at ChatGPT. This tutorial starts with the consent gate because it applies to all three, then compares what each does, what a four-person practice pays and how to test them on fifteen returns.
Gate zero: return information and Section 7216 consent
Section 7216 of the tax code restricts what a paid return preparer may do with client return information. The regulations treat people who provide auxiliary services, including those who develop software used to prepare or file returns, as preparers too. Some disclosures to other preparers or contractors who assist with preparation are allowed without consent, on conditions, such as limits on services that make substantive determinations about the tax liability. Whether a general chat assistant fits those exceptions is a question for your adviser or professional body, not for a vendor's sales page. This is a summary of published text, not advice.
Where you rely on consent, the consent regulation lists what it must contain: the preparer's and the client's names; the purpose of the disclosure; the specific recipient or recipients; the information to be disclosed; the client's signature and date. It must be obtained before the disclosure, not afterwards, the client must receive a copy, and if no duration is stated it lasts one year. Individual returns carry extra wording requirements. The practical consequence is that "we use AI tools" is not a consent; "we send your documents to a named vendor for document sorting and return drafting" might be.
Decide this tool by tool before the trial, not after it. A platform that holds your clients' documents already is a different disclosure from a chat window you paste into. Section 7216 consent for AI tools goes through the wording, and redacting a return before you paste it into ChatGPT covers the route where no return information goes in at all. Record the decision in your written information security plan, and do not run a trial on live client data until it exists.
A decision log keeps the gate visible. This one is filled in for the imagined four-person practice used in the cost section below. The "route" column is a note for a conversation with an adviser, not a conclusion.
| Tool or feature | What it sees | Route to settle | Recorded in |
|---|---|---|---|
| Practice platform (portal, documents) | Every client document and message | Consent wording, or an adviser-confirmed exception; vendor contract reviewed | Engagement letter and security plan |
| Return-drafting partner (Juno through TaxDome; Filed, Byron or Juno through Canopy) | Source forms and the prior-year return | Consent that names the vendor and the partner behind it | Consent form and vendor list |
| Meeting notetaker (beta) | Recorded client calls | Off until consent covers recordings | Staff AI rules: off by default |
| ChatGPT | Nothing taken from a return | No return information in prompts; redaction rule for anything else | Staff AI rules |
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Buy nowWhat TaxDome's AI covers today and what is still coming
TaxDome changed its pricing on 2 November 2026. Its pricing page now sells one plan priced by active clients: $1,500 a year covers the first 150, with up to 20 team members included and no per-seat charge, and more clients cost $15 each on demand or less in packs bought at renewal. Firms that joined earlier keep their Essentials, Pro or Business seats until their first renewal on or after 1 January 2027. AI moved in the same week. TaxDome's help centre says that from 5 November 2026 document renaming and tagging, AI in tax return delivery, and API and MCP access sit in an AI add-on at $200 a month per firm, after a 14-day free trial that each firm gets once. AI checklist generation from the prior-year return, and matching uploads against that checklist, stay in the subscription.
The AI page separates what is live from what is coming. Renaming and tagging, which TaxDome says it does with 99 percent accuracy, are switched on in firm settings. An open MCP connector lets Claude or ChatGPT read and act on TaxDome data, and a public API comes with the add-on. Atlas, an agent that watches stale jobs and unpaid invoices and shows a log before anything goes out, is "coming soon". For return preparation TaxDome hands off to connected preparation platforms, currently Juno, which pull data from source documents, draft the return against prior-year data and send it back for review; documents can also flow to Drake, ProSeries, UltraTax, ATX, CCH Axcess and Lacerte.
On data, TaxDome states SOC 2 Type II certification and says the same encryption and security standards apply across its AI features. The AI page does not spell out training or retention terms, so ask for the contract wording. Price Juno separately, because TaxDome's pages give no figure for it. For the arithmetic of old seats against the new client-based price, including the legacy $100-a-month Pro seats and $500 four-month Business seats, TaxDome pricing, seasonal seats and demo questions models four practices.
What Canopy's Smart Tax Prep and credits cover
Canopy's pricing page lists Standard at $74 per user per month billed annually, Plus at $109 and Premium at $149, which carries a "coming soon" label, with a custom Enterprise tier. Its FAQ says every plan includes the full suite, with the tiers differing in depth. Smart Tax Prep, tagged new, is ticked on all three plans and is described as AI document extraction and mapping to automate return preparation, "powered by Filed and Juno". AI document renaming is a Plus and Premium feature, the AI meeting notetaker is in beta at 8, 12 or 16 hours per user per month by plan, and its AI page describes a supervised "coworker" that plans and runs routine work inside Canopy.
The cost surprise is credits. Tax Workflow Automation, covering AI-generated intake questionnaires, pre-fill with AI and tax delivery, runs on client credits. Every plan includes five per term. More start at $34 per client on annual billing, with volume discounts that are not published. Per the FAQ, one credit gives unlimited use for one client for the term, and it is spent the first time you use the AI workflow for that client; questionnaires and checklists built and sent without AI never use one. Smart Tax Prep shows no price on the pricing page, and Canopy's Smart Prep page says each AI prep partner (Filed, Byron or Juno) needs its own subscription, priced by the partner and by return volume, so get that quote alongside Canopy's and ask whether it also uses credits. Canopy pricing, power-ups and client credits goes through the add-on costs.
Notice what both vendors have in common. TaxDome lists Juno as its connected preparation platform, and Canopy's Smart Prep integrates with Filed, Byron and Juno. Ask each vendor which part of the drafting is done by a partner, where that partner processes the data and what the contract says happens to it. That is also a Section 7216 question, because it names the recipient of return information.
Where ChatGPT fits, and where it must not
ChatGPT Business Standard seats are $20 per user a month billed annually or $25 monthly, with a two-seat minimum, and OpenAI states that business data is not used for training by default. It has no client portal, no workflow, no e-signature, no connection to your tax software and no memory of your clients, so it cannot replace either platform. What it does well is text: client emails, organiser instructions, engagement-letter wording, explanations of a notice and checklists, none of which needs return information.
Here is a prompt of that kind, with an illustrative output and what a preparer would fix.
Prompt: Write a short, friendly email to an individual client who has not sent two documents we need before we can start: the year-end statement from their brokerage account and the final pay stub from their second job. Say we need both by 14 February to finish before the filing deadline, offer two ways to upload them, and avoid any tax advice. Use [first name] and [your name].
Sample output (illustrative):
Subject: Two documents needed to start your return
Hi [first name], we are ready to begin your return but are missing two items: your year-end brokerage statement and your final pay stub from your second job. Could you send both by 14 February so we can finish comfortably before the deadline? You can upload them in your portal or reply to this email with clear photos. Thanks, [your name]What you would fix: the output says "comfortably before the deadline", which promises a result; "in time for the filing deadline" is safer. It also never says which year the statement should cover. The prompt included no client data, so there is nothing to consent to. A prompt that pasted a client's wage figures into the same chat would be a different matter, and the consent decision above would apply. ChatGPT prompts for tax preparers has more prompts that stay on the safe side of that line.
Side by side on the criteria that matter
| Criterion | TaxDome | Canopy | ChatGPT Business |
|---|---|---|---|
| What it is | Practice platform with portal, workflow, billing, e-signature | Practice platform with portal, workflow, billing, e-signature | General assistant |
| Published price | $1,500 a year for 150 active clients, up to 20 team members; extra clients $15 on demand or less in packs | $74 to $149 per user a month billed annually | $20 per seat a month annual, $25 monthly, two seats minimum |
| Seasonal staff | No charge up to 20 people at once; legacy seat plans keep $100 monthly and $500 four-month seats until renewal | No seasonal seat product on the pricing page; ask | Add and remove seats; check the billing terms |
| AI on documents | Renaming and tagging in the AI add-on; checklist matching included | Renaming on Plus and Premium | Upload and ask; no filing into a client record |
| AI on return preparation | Connected platform (Juno); price not shown | Smart Tax Prep on all plans; partner subscription priced separately | None built in; only what you paste |
| How AI is charged | $200 a month per firm add-on, apart from Juno | Included features, plus client credits from $34 for the tax workflow | Within the seat |
| Data statements | SOC 2 Type II; same security standards across AI features | SOC 2 Type II compliant; 256-bit encryption | No training by default on business plans |
Read the table for gaps. The cheapest cell is ChatGPT's and the most uncertain cells belong to the two platforms' AI return preparation, where neither page prints a price. That is where a demo should spend its time, and why the next two sections price the knowns and test the unknowns.
What a four-person practice pays under each model
Consider an imagined practice with two preparers and one administrator all year, a fourth preparer for the four months of busy season, and 300 clients (260 individual returns and 40 business returns). Figures are list prices from the pages above, with one-year terms and no negotiation.
| Option | How it adds up | Yearly cost |
|---|---|---|
| TaxDome, 300 active clients | $1,500 for the first 150, plus 150 more at $15 on demand (a pack costs less); the temporary preparer costs nothing | up to $3,750 |
| TaxDome with the AI add-on | Up to $3,750, plus 12 x $200 | up to $6,150 |
| Canopy Standard | 4 users x $74 x 12, the fourth bought for the full year | $3,552 |
| Canopy Plus | 4 users x $109 x 12 | $5,232 |
| Canopy Standard, AI workflow for 60 complex clients | $3,552 plus 55 extra credits x $34 | $5,422 |
| Canopy Standard, AI workflow for all 300 clients | $3,552 plus 295 extra credits x $34, before any volume discount | $13,582 |
| ChatGPT Business, added on top of either | 4 seats x $20 x 12 | $960 |
Two readings follow. First, the credit model is cheap at low volume and heavy at full coverage, so a practice that wants AI intake for every client must get the volume price in writing before it plans. Second, TaxDome no longer charges for the temporary preparer, while Canopy charges a full year's seat for them ($888 on Standard), which is a negotiation point for a practice with busy-season staff. TaxDome's AI add-on, at $2,400 a year, is the line that most changes its total.
A quick sum puts the heaviest option in perspective. The $10,030 of extra credits is about 167 hours at an internal value of $60 an hour, which is roughly 34 minutes saved per client across 295 clients. If AI intake saves less than that, it does not pay on time alone. Cheaper routes exist: use the AI workflow only for new and complex clients, and send plain questionnaires to the rest.
A 15-return test before you sign
Pull fifteen prior-year returns: ten simple individual ones, three with self-employment income and two small business returns. Use copies you are permitted to use, and settle consent first. Pick twelve key fields per return, such as wages, withholding, interest, dividends and business income, so there are 180 fields to check. Fix the pass marks before starting, for example 98 percent of fields correct on simple returns, and run the same documents through each tool's document and return-preparation features.
| Measure | Tool X | Tool Y |
|---|---|---|
| Documents named and tagged correctly | 93 of 100 | 85 of 100 |
| Key fields correct (of 180) | 171 (95.0%) | 177 (98.3%) |
| Reviewer minutes per return (baseline 38) | 29 | 26 |
| Errors that reached a reviewer unflagged | 6 | 2 |
These numbers are invented for a made-up run; they are not a result for either product. Here is how to read such a sheet. Tool Y clears the 98 percent mark and Tool X misses it by three points, so only Y passes. Y also saves 12 minutes a return against the 38-minute baseline. Across 300 returns that is 60 hours, about $3,600 at $60 an hour, which you can set against the yearly costs above. If a tool's error rate forces the reviewer to re-check every field, the saving shrinks towards zero, which is why the unflagged-error count matters more than the headline accuracy.
Run the same sheet for a ChatGPT-only workflow on redacted copies if that is your alternative, and have a second person review a sample of the extracted figures against the source documents, not against the AI's summary. AI tax return prep: extract, review, sign off sets out the review step in more detail.
What a reviewer still checks on an AI-drafted return
Whichever product drafts the return, a person signs it, so the review step is where the saving is either kept or lost. A short list works better than a long one because people actually run it:
- Tie every extracted figure to its source document, not to the AI's summary of it.
- Compare each major line with the prior year and investigate any swing above a threshold you set, such as 15 percent.
- Look for corrected or duplicate forms from the same payer.
- Confirm identity details, dependants and filing status against the client's organiser.
- Check carried-forward items and estimated payments against last year's file.
- Run the tax software's own diagnostics after import and clear every message.
- Record who reviewed the return and when, inside the workflow, so the file shows it.
A realistic mistake shows why. A brokerage sends a corrected year-end statement in March. The document tool tags both versions as the same form type, the extraction reads both, and investment income is counted twice. Nothing flags it. The reviewer's prior-year comparison, though, shows income up 22 percent with no change in the client's holdings, and that prompts a look at the documents. The fix is a rule rather than a setting: when two forms of one type arrive from one payer, a person chooses which one stands.
Questions for each demo
For TaxDome:
- What is the pack price for our active-client count, and how do we watch the count during the year?
- Can our account buy the AI add-on, and can we choose when its 14-day trial starts?
- Is Juno billed by Juno or through TaxDome, per return or by subscription, and what data does it see and where?
- When will Atlas be available, and will it stay inside the add-on price?
- If we are already a customer, when is our renewal and what does the prepared offer say?
For Canopy:
- What does the Smart Tax Prep partner (Filed, Byron or Juno) cost at our return volume, and does it also consume client credits?
- What is the per-credit price at 300 clients, and do unused credits roll over?
- Is there any short-term seat option for busy-season staff, or must every seat be annual?
- Which tax programs does Smart Tax Prep push returns into?
- Which AI features are still beta, and what happens to client data in a beta?
For any assistant you add: which plan, who administers it, whether data is excluded from training by default, how long chats are kept and how a departing preparer's chats are handled. If chat history matters to you, ask how it can be exported before you rely on it, since export options on business workspaces have been limited.
Ask one more question of every vendor, and ask it first: what does leaving cost? Find out how clients, documents, notes and e-signature audit trails come out, in what format, and whether you can still open them after you cancel. Practice platforms are easy to enter, with TaxDome offering help migrating a client base, and the exit terms are the ones that surprise a firm in year three.
Which practice should choose which
A solo preparer with about 150 returns is the case where the platforms are least obviously worth it. TaxDome's minimum is $1,500 a year (a solo preparer already on the legacy Essentials seat pays $800 until a renewal from January 2027), Canopy Standard is $888, and ChatGPT alone is a two-seat minimum. The sensible test is whether the portal and document tools save the owner two weeks of chasing in busy season, and the 15-return sheet will say.
A four-person practice with temporary staff, like the model above, should price TaxDome at its real active-client count, with and without the AI add-on, against Canopy Plus, ask Canopy about short-term seats and decide the AI credit policy before signing. A practice of ten or more should negotiate on both, because the published prices are starting points, and should insist on a plan-by-plan AI feature list in the order form.
For all three sizes, add ChatGPT for text work only after the consent decision is made, keep return information out of it unless that decision covers it, and run the test before you pay for a second year.
Questions tax preparers ask about AI software
Does TaxDome's AI come with every plan?
Only the basics. AI checklist generation and checklist matching are in the subscription. From 5 November 2026, document renaming and tagging, AI in return delivery and API and MCP access need the AI add-on at $200 a month per firm, after a 14-day free trial. Atlas is listed as coming soon. Confirm your account can buy the add-on before planning around it.
How does Canopy charge for AI?
Smart Tax Prep is listed on all three core plans. AI intake and delivery run on client credits: five included per term, then credits starting at $34 per client on annual billing, with volume discounts. One credit covers unlimited AI intake and delivery for that client for the term. AI document renaming is listed on Plus and Premium, not Standard.
Can I use ChatGPT for tax returns?
Use it freely for drafting emails and checklists that contain no return information. For anything drawn from a client's return, decide your Section 7216 position first: written consent that names the tool, or redaction so no return information goes in. Keep identifiers such as social security numbers out regardless. This is practical guidance, not legal advice.
Is a general assistant cheaper than practice software?
On price alone, yes: ChatGPT Business Standard seats are $20 a month billed annually, against $74 or more per user a month for Canopy and a $1,500-a-year minimum for TaxDome's client-based plan. A chat tool does not replace the client portal, workflow, e-signature or billing, so the comparison is only fair for the text-work slice of the job.
Further reads
- WISP for Tax Preparers: Add Your AI Tools Without Gaps — Adds your AI tools to the written security plan without gaps.
- TaxDome vs Karbon for a Small Firm: AI, Cost and Fit — The same small-firm test applied to TaxDome and Karbon.
- How Small Tax Practices Use AI Through the Busy Season — Where AI saves time between January and April.
- AI Tax Return Review vs Software Diagnostics: What Each One Catches — What AI review catches that software diagnostics already do.
- How to Chase Missing Client Records With AI Before Deadlines — Reminder sequences for missing documents before deadlines.
- Accounting Software for CPA Firms: Automation Features Compared — A wider comparison of practice software automation.
- AI Software for Tax Professionals: Run a Pilot and Measure Cost per Return — A four-week pilot plan for a small tax practice: one task, pass or fail rules, a consent and WISP check, and a cost-per-return formula.
- AI Tax Prep Software for CPAs: What to Test Before You Switch — A pre-switch test for CPA firms: ten filed returns, a scoring sheet, planted errors and the checks that separate Canopy Smart Prep partners, Juno and others.
- Canopy vs TaxDome for Tax-Heavy Practices: Which Fits the Season? — Canopy and TaxDome judged on six tax-season jobs, seasonal staffing sums, a scorecard and a ten-return pilot you can run before signing.
- AI-Driven Tax Software: How to Test Blue J and ChatGPT on Your Own Cases — Compare Blue J with ChatGPT using a ten-question test built from your own closed cases, a scoring sheet, a citation check and a break-even sum.
- Tax Preparation Automation: Source Documents to Software With AI — Map W-2, 1099 and K-1 fields, set accuracy checks and handle scans, so AI extraction feeds your tax software without re-keying errors.
- Tax Services AI for a Small Practice: Intake, Chasing and Review Notes — A three-part workflow for a small tax practice: intake checklist, document-chasing emails and reviewer notes, with a named person owning each step.
- TaxDome Automations: What to Automate First in a Small Practice — Which TaxDome automations to set up first in a small practice: onboarding, document requests and reminders, in order, with what to leave manual.
- Canopy AI: Smart Tax Prep, Document Renaming and Beta Features — What AI Canopy offers a tax practice, which features carry a beta label on its pricing page, and how to test each before you pay.
- AI Tools and AI Development: The Complete 2026 Guide — the AI hub, including every tutorial in the AI-for-business series.
Sources: TaxDome pricing page, TaxDome AI page and help-centre articles on client-based pricing and the AI add-on; Canopy pricing, security, Coworker and Smart Prep pages; OpenAI business pricing page; the published text of the consent and disclosure regulations under Section 7216. Checked 4 November 2026.