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Overview

Tight’s Tax Calculations makes it easy for you to provide your users with income tax estimates, with support for many different income streams, expenses, and tax profiles. The Tight Income Tax API has been proven and reached maturity via very rigorous maintenance and update processes in place since the 2017 tax year, as well as painstaking quality assurance processes with a 1% threshold between 3 different sources. The Tight Tax Calculations API currently supports the United States (50 states + DC) and Canada (all provinces, including GST/HST/PST/QST), but is architected for rapid expansion into other countries as needed.

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Use cases

The Tight API automatically keeps a General Ledger behind the scenes for all of your users. While your users may never want to look at a GL or Chart of Accounts, the beauty of the behind-the-scenes GL is that they get all the tax reporting that they could ever need, without the burden of having to manage a General Ledger or understand bookkeeping. As the user’s business (and financial complexity) grows, the necessary reporting will always be available for them in real time. For example, if your user is a sole proprietor that normally files a Schedule C, then they decide to become an LLC necessitating a Form 1065, you will only need to alter one parameter via the Tight API to get them the new tax report that they need.

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Annual/quarterly tax estimates

Embed the Income Tax Dashboard to provide your users with comprehensive tax estimation functionality directly within your platform. The dashboard gives business owners real-time visibility into their quarterly and annual tax obligations, including federal and state income taxes, self-employment taxes (if applicable), and estimated quarterly payments.

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Multiple income streams

Tight Tax Estimates makes it easy for you to provide your users with income tax estimates, based on their many different incomes streams, including:
  • Self-employed (1099) income, with separate P&Ls and Schedule Cs for each stream
  • Business (K-1) income, from pass-through entities like LLCs, LLPs, and S Corporations
  • Investment income, including short-term capital gains, long-term capital gains, qualified dividends, etc.
  • Ordinary W-2 income
Business owners can view quarterly estimates, understand their effective tax rates, and plan for tax payments without leaving your platform.

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Tax profile

Your users can set up their tax profile, and Tight automatically calculates their tax obligations in real-time as transactions flow through their accounts. Tight can handle very complex tax profiles, including granularity into:
  • Filing Status
  • State (or Province)
  • Business income (from a passthrough entity)
  • W2 income
  • Tip income
  • Overtime income
  • Itemized personal expenses
  • Federal & State withholding
  • Wage expenses
  • Investment and other income types
  • Federal Dependents (and other dependents including special circumstances for children older than 17)
  • State Dependents (and other dependents including special circumstances for children older than 17)
  • Alternative Minimum Tax (AMT) adjustments
  • Spousal data
To decrease your user’s time-to-value, initial user onboarding features a very simple tax profile form (filing status, entity type, etc.)

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Tax form generation

Business owners can generate pre-filled tax forms directly from the Income Tax Dashboard, or you can generate them programmatically via the Tight API. Via Embedded UI: When you embed the Income Tax Dashboard, your users can generate tax forms specific to their entity with ease. The dashboard provides complete tax forms as PDFs for filing or record-keeping and Tax Details report for hand-off to a tax preparer or accountant. Via API: For programmatic generation, use the Tight API to generate tax forms on demand:

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Tax professional hand-off

The vast majority of business owners, especially those with formed entities (e.g. LLCs), opt to have their taxes done for them by a human. Tight makes the business owner’s interaction with their tax preparer very quick, as Tight’s Income Tax Dashboard allows the user to generate a Tax Details (for tax filing) report that tax preparers love, allowing seamless import into the tax professional software that tax preparers typically use behind the scenes. The business owner can simply enter their tax preparer’s email address and have the Tax Details report sent directly to the tax preparer.
Tight’s Tax Details (for tax filing) report format has been honed for many years, such that tax preparers love the report. They often thank the business owner for the level of organization.

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DIY filing

Some business owners, especially self-employed individuals who don’t necessarily view themselves as a business, prefer a low-cost DIY tax filing option. For users who want to file their own taxes, Tight integrates with white-labeled DIY tax filing platforms like April, seamlessly transferring their financial data from Tight directly into the tax filing platform, where their tax return is pre-filled with all necessary information from the Tight General Ledger. Once the data is transferred, business owners can review their pre-filled return, make any necessary adjustments (e.g. for items not tracked in their accounting system, like their personal mortgage), and file electronically.