Financial Data Exchange Launches Most Comprehensive Tax Information API in the US

https://thefintechtimes.com/financial-data-exchange-launches-most-comprehensive-tax-information-api-in-the-us/
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The Financial Data Exchange has released Version 4.2 of the FDX API which now includes the most comprehensive tax information fields of any API in the United States. In addition to continuing to provide the financial industry with a common, interoperable and royalty-free standard for all user-permissioned financial data sharing, the FDX API now encompasses 51 different IRS forms and statements.

The FDX API paves the way for the transition from current disparate tax formats, Open Financial Exchange (OFX) and Tax Exchange Format (TXF), as well as other often used proprietary formats like PDF and CSV. These changes to the FDX API make tax preparation and reporting more efficient and secure than ever before. Other updates contained in FDX API 4.2 include the separation of the banking and tax specification for easier readability and the addition of annuity accounts to the API.

“FDX API 4.2 represents another high-water mark for our organisation and continues to deliver on FDX’s promise to give the financial industry a secure, best-in-class open standard for all different types of user-permissioned data sharing,” said FDX Managing Director Don Cardinal.

The announcement of FDX API 4.2 puts in place a single standard data structure for exporting and importing almost all tax accounting data in the US that does not require the sharing of login credentials. Before the advent of FDX 4.2, tax information has been split between a patchwork of different standards like OFX, TXF, PDF, and CSV. FDX API 4.2 will enable a secure data sharing standard for interactions between tax software applications and companies that operate tax form data servers, such as payroll companies, banks, and brokerage firms. Further, all FDX data structures are readily generated and consumed using the ubiquitous JSON data serialisation technology.

“The FDX Tax Task Force’s work on the FDX API 4.2 specification will provide a huge upgrade in security for tax information reporting data,” said Clyde Cutting, Systems Architect at Wells Fargo, and member of the FDX Tax Task Force that worked to deliver the updated standard.

In addition to the FDX API standard’s existing support for an array of tax forms and statements, the new version of the FDX API now fully supports all types of business, royalty, farm, and rental income tax information.

FDX 4.2 will also provide US tax reporting data in a human-readable text format for the first time so that it can be used for file importing and exporting with tax return preparation software. In addition, this same format allows QR codes to be added to annual tax documents so that smart phone apps using open QR code technology can be used by all tax filers.

“The release of version 4.2 of the FDX API specification, and the unification of all annual tax form and statement data under one standard, will allow the tax software industry to simplify and streamline the income tax return preparation process for taxpayers and accountants alike,” said Bruce Wilcox, President of Internet Tax Information Processing Services (iTips), and member of the FDX Tax Task Force.

FDX recommends that the tax software industry begin replacing support for the older TXF data files with data files using the FDX API 4.2. To facilitate implementation of the new FDX API 4.2 standard for tax information, developers and implementers can visit this technical page for further information about the standard and assistance with migration from TXF and OFX to FDX data structure. Tax Data Exchange is an independent production of members of FDX’s API & Data Structures working group who specialise in tax data exchange.

https://thefintechtimes.com/financial-data-exchange-launches-most-comprehensive-tax-information-api-in-the-us/