Rethinking Tax & Accounting Technology for Asset and Wealth Managers amidst

Why K 1s, 1099s, and data governance not just “tax software” are defining the next decade

As the year end approached and tax deadlines near, I’ve spent a lot of time looking at tax and accounting technology through the lens of large institutional asset and wealth managers firms with global footprints, complex investor bases, and operating models that span public markets, wealth platforms, and alternative investments. What I’ve come to believe is simple:

Tax technology is no longer primarily a forms problem. It’s a data, workflow, and control problem.

And the stakes are rising. The broader tax software market is now measured in the tens of billions of dollars one market estimate puts it at ~$20.5B in 2025, growing to ~$37.1B by 2030. Mordor Intelligence That growth is being pulled by the same forces tax teams feel every season: cloud migration, automation/AI, and accelerating regulatory complexity.

Below is how I see the institutional tax stack evolving  especially around K 1s (and K 2/K 3), 1099s, W 2s, and enterprise tax coordination  using the three vendor “centres of gravity” I see most often in practice: Thomson Reuters ONESOURCE, Wolters Kluwer (CCH Axcess), and K1x.

1) The market has fragmented for good reasons

In large asset and wealth managers, tax reporting is not one workflow. It’s multiple distinct workflows with different owners, systems of record, and regulatory rhythms:

• Payroll tax (W 2): High volume, configuration heavy, operationally unforgiving.

• Wealth / retail tax reporting (1099): Cost basis, corporate actions, corrected cycles, and client experience.

• Alternatives / partnership reporting (K 1 + K 2/K 3): The most “unstructured” part of the ecosystem packages, footnotes, allocations, state detail, foreign attributes, investor look through.

• Enterprise tax governance: Controls, calendars, documentation, audit defence, and cross entity coordination.

This is why most firms end up with best of breed stacks rather than a single monolithic platform. It’s not a lack of ambition; it’s the reality that a “single system” rarely wins across all four domains.

2) In institutional tax, credibility increasingly comes from operating proof points

A few statistics are useful to ground the discussion:

• ONESOURCE positions itself as an enterprise standard used by 100% of the Fortune 100 and 96% of the Fortune 1000, with a user base in the 100,000+ range across 21,000 businesses. Thomson Reuters Tax+1

• A commissioned Forrester TEI study on ONESOURCE Indirect Tax modelled a composite organization and found 120% ROI, $2.1M NPV over three years, and $3.8M benefits vs $1.7M costs. Forrester

• Wolters Kluwer launched CCH Axcess Expert AI on October 15, 2025, explicitly framing it as “agentic ready” intelligence embedded into tax/audit/firm workflows. Wolters Kluwer+1

• K1x claims adoption by 44 of the 100 largest U.S. institutional investors (and broader penetration across accounting firms and endowments). K1x+1

• In private markets tax automation, K1x materials and partner statements cite ~66% cycle time reduction and the ability to extract ~1,200 K 3 fields from complex packages i.e., going beyond “face page OCR.” K1x+1

I’m not sharing these to “rank vendors.” I’m sharing them because institutional buyers increasingly demand measurable outcomes: cycle time reduction, fewer corrected filings, lower rekeying, stronger audit trails not feature lists.

3) Where value is moving from engines to control layers

Historically, the defensible moat in tax software was the calculation engine and forms library. That layer still matters, but it’s becoming table stakes.

In 2025, I see differentiation concentrating in three places:

A) Structured data extraction from unstructured tax packages

This is where tools like K1x have built their narrative: “turn messy K 1/K 3 PDFs into structured, usable data” with measurable cycle time impact. K1x+1

B) Enterprise grade orchestration and governance

This is the core strength of platforms like ONESOURCE (workflow, calendars, cross entity controls, documentation, audit readiness), and why they are still sticky in large tax departments. Thomson Reuters Tax+1

C) Agentic workflow automation

The arrival of CCH Axcess Expert AI matters because it signals a strategic direction: AI not just helping, but orchestrating multi step work with governance and oversight. Wolters Kluwer+1

The practical implication is that tax leaders will increasingly buy “operational reliability” rather than “tax software.”

4) Regulatory pressure is pushing tax toward “always on” compliance

Even for asset managers with a US heavy reporting burden, global regulation is changing the expectations of what “good” looks like.

Across jurisdictions, e invoicing mandates and continuous transaction controls are expanding and pulling finance/tax into more real time data readiness. The UK, for example, has now confirmed an intent to implement mandatory e invoicing from April 2029. Global Tax News+1

There isn’t one universally agreed count of mandated jurisdictions, but credible industry guides consistently point to a rapidly expanding set of country requirements and timelines enough that multinational operating models increasingly treat e invoicing readiness as a core compliance capability, not a side project.

For large asset managers, the takeaway is: tax data infrastructure (lineage, controls, integration) is becoming inseparable from regulatory resilience.

5) The missing piece I see most often: a “Tax Data Hub” mindset

Most institutional tax stacks work fine until they don’t. And when they break, it’s usually not because the tax engine failed. It’s because the organization lacks a consistent answer to:

1. What is the golden source for investor identity, entity hierarchy, and tax attributes?

2. Where do reconciliations happen between accounting, tax outputs, and investor reporting?

3. How are exceptions triaged and resolved without email driven chaos?

4. What evidence exists to defend positions to auditors, regulators, and boards?

This is why I increasingly believe that large firms need a Tax Data Hub / control layer not necessarily a single product, but an explicit architecture for governance, mapping, reconciliations, and auditability.

Without it, even strong platforms become “systems of record that still require manual glue.”

6) AI will help but it won’t rescue a broken operating model

AI is already delivering tangible benefits in tax. But I see the biggest gains when AI is applied to:

• exception triage and workflow routing,

• document intelligence (K 1/K 3 decoding),

• reconciliation and anomaly detection,

• and audit evidence preparation.

Where AI tends to disappoint is when firms try to use it to “paper over” fragmented data and unclear ownership. In my experience, AI amplifies the quality of the underlying controls it doesn’t replace them.

The significance of agentic strategies (like Expert AI) is that they shift the discussion from “assistive AI” to “orchestrated work.” Whether that becomes mainstream depends on governance, explainability, and confidence in controls. Wolters Kluwer+1

7) What I’d watch over the next 12 months

If I were tracking where this market is heading (and where institutional buying will follow), I’d watch for:

• Proof of agentic ROI in production at scale (not pilots): governance, error reduction, cycle time compression. Wolters Kluwer+1

• Convergence moves (partnerships/M&A) between enterprise suites and private markets specialists (because K 1/K 3 complexity is increasingly “too important to remain peripheral”). Canoe+1

• More TEI style business cases shifting procurement from license cost to measurable operational outcomes (e.g., ROI/NPV framing). Forrester

• Regulatory acceleration that forces faster modernization cycles (e invoicing expansion, real time reporting dynamics). Global Tax News+1

Closing thought

For large asset and wealth managers, tax technology decisions are no longer tactical. They’re architectural.

The firms that win won’t be the ones with the most software. They’ll be the ones that treat tax as a data discipline and align platforms like ONESOURCE, CCH Axcess, and specialists like K1x into a coherent operating model with strong controls, clean integration, and fewer surprises at the worst possible time.

If others are navigating the same challenges especially across K 1/K 2/K 3, 1099, and W 2 domains I’d be interested in comparing notes on what’s working, what’s not, and what you’re seeing in the market.

#k1 #1099 #w2 #irs #taxreporting #wealthmanagement #private equity