The question on users' minds was probably less about what TaxWorks would do with its 2007 tax software than what the new owners would do with the company. Consumer tax prep giant H&R Block purchased the operations in February with the parent company of TaxWorks being renamed RedGear Technologies
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The result, says marketing vice president Kelly Peterson, has been the company's ability to do a lot of things it could not have afforded to do in past years. Block's principal involvement in the Kaysville, Utah-based software company has been to provide resources to pay for services and improvements.
"We never could have afforded to offer free e-filing this year, and we couldn't have offered reduced prices on bank products," she says. "We have been able to almost double our programming staff."
The Block deal was different than many acquisitions of tax software companies, Peterson notes. Block did not previously have a professional software line, and kept the products it purchased. Those include ArkWorks, eGLWorks and 1040Works, which fall under the Red Gear banner.
1040Works is not a new package. It's a new name for a product introduced last season for high-volume shops whose business is primarily 1040 preparation and are heavy users of bank products.
"It's cheaper and doesn't have all the features TaxWorks does," says Peterson. "It does not have an asset manager, although it does have a depreciation worksheet.
The product is priced at $395 for the federal 1040 and one state, $595 for the 1040 and all states. A full set of business forms and states are available. Pay-per-return processing is also available for business returns.
The company has also taken some less revolutionary steps, including an improved client management function, which Peterson says is essentially a launch page.
"We've added what we call a home screen, where they can go directly to recent clients they have worked on," she says. The home screen is designed to make it easier for preparers to sort and find clients. The screen can also be used to create new clients.
One thing Block has not done is adopt the TaxWorks 1040 product for use in its offices. It will, however, use the TaxWorks business products for its offices that prepare business returns. Block previously utilized the ATX line, but now that ATX, owned by CCH, is a Block competitor, that relationship has ended
Block has not made any public statements about why it entered this market; nor does it have to given its size as a multibillion-dollar operation and the much smaller size of TaxWorks.
Brian Haderle, a CPA who owns the Padgett Business Services franchise in Rexford, Idaho, says he has been using TaxWorks for 15 years and has seen no reason to switch
"At times I started comparing TaxWorks with other products," he says. "But these guys were providing a product that was meeting my needs and the needs of my clients as well as any of the others."
He is extremely happy with the company's support and likes the links between different forms in the TaxWorks software.
The office handles about 300 returns, largely individual with a few C corporations, S corporations and partnerships. Haderle is happy with the company's decision to stop charging for electronic filing. However, the company's decision to cut fees on bank products will not entice him to start offering those.
"We signed up for a couple of years thinking it was something we might use," he says. But he continues, "Philosophically, I guess I'm not sure I would be doing my clients a service to do so."
HQ Kaysville, Utah
Phone (800) 726-1040
Web site www.taxworks.com
Federal 1040 price (first year) $1,095
Pay-per-return $400 fee applicable towards processing, $17 for 1040 Fed and one state, $32 for any business federal return and one state.
Online preparation Consumer, www.taxengine.com.
Multistate processing Available.
Support methods Fax, Phone, Email
Tax season support hours Generally, M-F 7 a.m.- 8 p.m. MT, Saturdays 7 a.m. -1 p.m. MT.
Document management/storage ArkWorks.
Client portals N/A
Online organizer N/A
Integration Bridges provided into QuickBooks, most GL packages and RedGear's eGLWorks and ArkWorks. Integrates with Excel.
New for next year Vista compliance, numerous client management features, 1041 Efiling, always visible Help Window, 1040 PR 1040 SS & EF for both. Free electronic filing