Com­par­i­son Guide: Tax prepa­ra­tion soft­ware

Accounting Today - - Contents - BY TED NEEDLEMAN

It’s never too early to start think­ing about tax sea­son. With tax prepa­ra­tion a prime source of rev­enue for many prac­tices and span­ning the bet­ter part of the year with ex­ten­sions, cor­po­rate and other non-1040 re­turns, and dif­fer­ent fis­cal year clos­ing times, tax sea­son has pretty much turned into a year-around task for many prac­ti­tion­ers.

While it’s still some time be­fore you have to start set­ting up the prac­tice for the up­com­ing tax sea­son, it’s not too soon to start think­ing about what soft­ware you will use next time around. Many prac­ti­tion­ers will stay with the same soft­ware they used in the most re­cent tax sea­son, or even for years be­fore that. That’s a safe and com­fort­able way to go, and chances are, while your per­ma­nent staff might be a lit­tle rusty go­ing into the sea­son, they will quickly re­pol­ish their skills in us­ing a fa­mil­iar ap­pli­ca­tion.

But go­ing with “the old fa­mil­iar” isn’t al­ways the best choice. Some­times a change is a bet­ter choice, even though it might mean putting a bit of ex­tra work,

time and money to­ward gear­ing up be­fore the del­uge.

While there are nu­mer­ous rea­sons why you might want to change your soft­ware provider, the three most com­mon are dis­ap­point­ment with your cur­rent ven­dor’s sup­port, the in­abil­ity of the cur­rent soft­ware to do cal­cu­la­tions nec­es­sary for some of your clients, and a change in the client makeup of your prac­tice. Any of these alone is a sign that it may be time to at least con­sider mak­ing a change.

Look­ing else­where is not an easy de­ci­sion to make, and often there’s an in­er­tia when you’ve used the same ven­dor for years. But you do owe it to your­self to con­sider the al­ter­na­tives.

A rose by any other name?

It’s pretty easy to jus­tify not mak­ing a change. Be­sides in­er­tia and the cost of re­tain­ing and get­ting used to the way an­other ven­dor’s ap­pli­ca­tion works, there’s the sim­ple fact that most tax prep soft­ware is fairly generic. It has to be.

But the ven­dors them­selves are quick to point out that there are dif­fer­ences in the way that their ap­pli­ca­tion, or ap­pli­ca­tions, work.

While there have been oc­ca­sional con­sol­i­da­tions over the years, over the past sev­eral years, the field has been pretty sta­ble. The ma­jor ven­dors con­tinue to sell a va­ri­ety of dif­fer­ent ap­pli­ca­tions that are all de­signed to ac­com­plish the same pur­pose — gen­er­at­ing er­ror-free tax re­turns.

As in the past, many ven­dors have sev­eral ap­pli­ca­tions for you to choose

Tax prep

from. Cch/wolters Kluwer has four 1040 prod­ucts, In­tuit has three, and Thom­son Reuters has two. While each has more in com­mon with the other than dif­fer­ences, the dif­fer­ences, even within the same ven­dor, are enough to al­low the ven­dors to sup­port mul­ti­ple ap­pli­ca­tions year af­ter year.

Just as cir­cum­stances in your prac­tice change, so do the of­fer­ings from the ma­jor tax prep soft­ware ven­dors. To help you make a de­ci­sion about the pos­si­bil­ity of tak­ing the plunge, we’ve sur­veyed the ma­jor ven­dors, and com­piled a com­pre­hen­sive fea­tures chart to ac­com­pany this story ( see page 24).

We also asked the ven­dors to tell us what they have in the works for the up­com­ing tax sea­son.

What’s new

CCH Ax­cess Tax and CCH Prosys­tem fx Tax (Wolters Kluwer):

With Ax­cess and Prosys­tem fx, CCH has up­graded their di­ag­nos­tics. Users can now mark di­ag­nos­tics as “signed-off” and can choose to see all, signed-off, or open di­ag­nos­tics in their view — speed­ing up the re­view process.

Also en­hanced is the EFIN Man­ager, which now lets users view, mod­ify and track their EFINS and ven­dor con­trol num­bers in one cen­tral lo­ca­tion. New for the up­com­ing tax sea­son is find/search.

This fea­ture of­fers a pow­er­ful new ‘search re­turn’ field above the work­sheet tree that al­lows users to quickly find where to en­ter data.

CCH ATX (Wolters Kluwer): Sig­nif­i­cant en­hance­ments for the up­com­ing tax sea­son in­clude the new CCH ifirm Client Por­tal in­te­gra­tion. CCH ifirm Client Por­tal re­places Por­tal­safe in­te­gra­tion, al­low­ing users to se­curely share files with clients. ATX and CCH ifirm work to­gether to sim­plify of­fice work­flow. Users have the abil­ity to up­load tax re­turn PDFS from ATX to Client Por­tal.

Also up­graded is tax re­search; ATX now in­cludes both CCH An­swer­con­nect and CCH In­tel­li­con­nect in­te­gra­tions. ATX now in­cludes the year in the backup file (e.g., John.atx17backup), mak­ing it eas­ier to dis­tin­guish be­tween dif­fer­ent years when restor­ing re­turns. And a new 1099-Q work­sheet is now ex­clu­sively avail­able to ATX Ad­van­tage pack­age cus­tomers.

CCH Tax­wise (Wolters Kluwer): For next tax sea­son, es­ig­na­ture is be­ing added into Tax­wise On­line. This gives both Tax­wise Desk­top and On­line the ca­pa­bil­ity to eas­ily cap­ture elec­tronic sig­na­tures from tax­pay­ers.

It can add an ad­di­tional level of signer ver­i­fi­ca­tion called knowl­edge-based au­then­ti­ca­tion that asks sev­eral ques­tions that only the signer should be able to an­swer.

Also, this year Tax­wise is im­ple­ment­ing two-step ver­i­fi­ca­tion (a.k.a. multi-fac­tor au­then­ti­ca­tion) for both Tax­wise prod­ucts. Two-step ver­i­fi­ca­tion is an ad­di­tional se­cu­rity mea­sure that in­creases se­cu­rity by send­ing a one-time code that au­then­ti­cates the user’s iden­tity and the de­vice they are log­ging in from.

Drake Soft­ware: For the up­com­ing tax sea­son, Drake is en­hanc­ing the mo­bile fea­tures of their por­tal ap­pli­ca­tion, Se­cure­filepro, in­clud­ing pre­parer-client in­ter­ac­tion and elec­tronic sig­na­tures.

They are also de­vel­op­ing a web-based re­port­ing dash­board that will help their cus­tomers track KPIS and ini­ti­ate mar­ket­ing ef­forts.

In­tuit Pro­con­nect Tax On­line: Pro­con­nect Tax On­line is re­leas­ing fea­tures to help ease the con­cern for tax re­form as well as ease the bur­den of en­ter­ing the data into the re­turn, with im­prove­ments to data im­port and re­view.

While it’s still some time be­fore you have to start set­ting up the prac­tice for the up­com­ing tax sea­son, it’s not too soon to start think­ing about what soft­ware you will use next time around.

A new in­di­vid­ual tax plan­ner will pro­vide the abil­ity to cal­cu­late mul­ti­ple sce­nar­ios based on cur­rent and fu­ture fed­eral tax rates. Im­prove­ments to data im­port and re­view will help pro­vide the abil­ity to col­lect doc­u­ments from file up­loads, mo­bile screen­shots or direct down­loads from over 5,000 fi­nan­cial in­sti­tu­tions. The data can then be au­to­mat­i­cally im­ported into the re­turn for W-2s, 1098s and 1099s.

Lac­erte (In­tuit): For tax year 2018, Lac­erte will build on the train­ing and prod­uct up­dates to help prac­tices man­age tax re­form changes.

The Tax Re­form Re­source Cen­ter will con­tinue to be the sin­gle source for tax law up­dates. Lac­erte is also up­dat­ing the pro­gram for the man­age­ment of part­ner own­er­ship data, sim­pli­fy­ing the in­put and rec­on­cil­i­a­tion in­volved in the trans­fer of part­ner­ship in­ter­est. Ad­di­tion­ally, Lac­erte will con­tinue to build out its e-fil­ing li­brary with sev­eral new ad­di­tions that in­clude Idaho fiduciary, In­di­ana part­ner­ship, Ken­tucky cor­po­rate, Lou­i­si­ana part­ner­ship, North Carolina part­ner­ship, Ore­gon fiduciary, Utah fiduciary, and Philadel­phia city fil­ing for cor­po­rate re­turns.

Other im­prove­ments and en­hance­ments in­clude im­proved han­dling of re­turns with a large num­ber of cities for states such as Michi­gan, Ohio, Penn­syl­va­nia and Ken­tucky. If mul­ti­ple pre­par­ers are work­ing on the same re­turn, the staff-pre­parer fil­ter will help man­age work­flow across staff. Lac­erte will also up­date the Per­son­al­ized Train­ing Por­tal. Search and fil­ter ca­pa­bil­i­ties will be added, al­low­ing users to find de­sired top­ics more quickly.

Text tran­scrip­tion will be added to video train­ing mod­ules.

Proseries (In­tuit): Key tax re­form tools for Proseries users in­clude the Tax Re­form Re­source Cen­ter — ac­cess to an­swers that tax pros and their clients have about tax re­form changes, tax re­form we­bi­nars that will cover tax re­form, up­dates, es­ti­mat­ing taxes and more, and de­tailed tax plan­ning work­sheets in the fed­eral 1040 are in­cluded in both Proseries Pro­fes­sional and Ba­sic edi­tions.

Proseries con­tin­ues to build out e-file ca­pa­bil­i­ties with sup­port for all 1040 state ex­ten­sions (where sup­ported by the state), Philadel­phia re­turns and Ne­braska corp, S corp and part­ner­ship re­turns.

Ad­di­tional im­prove­ments in­clude the abil­ity to au­to­mat­i­cally scale when the Win­dows DPI is set be­yond 100 per­cent (com­mon on lap­tops and with high-res­o­lu­tion mon­i­tors). This means that Proseries will au­to­mat­i­cally dis­play larger icons, text, pro­gram but­tons and other el­e­ments of the user in­ter­face, all in cor­rect pro­por­tion and bal­ance with each other.

Im­prove­ments for tax year 2018 in­clude the abil­ity to col­lapse sub-forms such as K-1 work­sheets, as­set work­sheets and source doc­u­ments within the forms bar. Also added are im­prove­ments to lock­ing re­turns func­tion­al­ity, in­clud­ing batch print­ing for locked re­turns, the abil­ity to e-file locked re­turns, and locked dates on client in­voices and let­ters.

Tax­act: Ma­jor en­hance­ments to the Tax­act Pro­fes­sional prod­uct in 2018 will in­clude an im­proved sign-in ex­pe­ri­ence, side-by-side com­par­i­son of any form type, and tools to project clients’ earn­ings and ex­penses for mul­ti­ple years. New tax forms, in­clud­ing Penn­syl­va­nia 1040 lo­cal, Ohio generic city and more, will also be made avail­able.

Gosys­tem Tax RS (Thom­son Reuters): En­hance­ments to Gosys­tem Tax RS in­clude the abil­ity to process all tax re­turn types within web browsers, new e-file qual­ity con­trol ca­pa­bil­i­ties in­clud­ing bank­ing/pay­ment in­for­ma­tion, and in­creased se­cu­rity op­tions in­clud­ing multi-fac­tor au­then­ti­ca­tion us­ing the Thom­son Reuters Authen­ti­ca­tor app.

Ad­di­tional en­hance­ments in­clude data im­port tem­plates that use Ex­cel files with built-in au­dit­ing ca­pa­bil­i­ties, and state in­for­ma­tion be­ing in­cluded in the K-1 trans­fer process.

Ul­tratax CS (Thom­son Reuters): En­hance­ments in­clude the abil­ity to turn off auto-cal­cu­la­tion func­tion­al­ity for any given re­turn, and the op­tion to sup­press in­for­ma­tional di­ag­nos­tics that are less rel­e­vant to the firm or clients’ needs.

The ven­dor ex­pects the con­tin­ued timely re­lease of up­dates and tools re­lated to re­form such as QBID pro­jec­tions and blended tax rates, and in­creased se­cu­rity op­tions in­clud­ing multi-fac­tor au­then­ti­ca­tion us­ing the Thom­son Reuters Authen­ti­ca­tor app and MFA be­ing re­quired in or­der to sub­mit e-files. AT

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