Basic 1040 tax prep software is becoming a fungible commodity, with little separating the features of the various packages offered by software manufactures, according to some observers.That's why so many of next year's tax prep packages are touting increased efficiency, ease of use and workflow simplification, and integration with other products.
"The big trend is toward e-filing and using technology to make workflow more efficient," said Ernest Zoumot, director of software product management for CCH's Torrance, Calif.-based ProSystem fx Tax. "We've added a massive number of e-file-capable business forms as states mandate them or make them available," said Zoumot. "We're also making a larger use of PDF files for data storage and communication with clients. Watermarks can now be printed on PDF files, and we're making PDF print a lot more flexible," he said.
"We're enhancing integration within the entire ProSystem suite, and eliminating the need for double data entry," he added. "For example, if the general partnership is using ProSystem fx, the data can flow across different business systems, as well as from the business to the individual returns. Likewise, ProSystem fx Profit Driver takes data from tax and imports it into a PDF for analysis of the business."
RIA has also concentrated on integrating its Carrollton, Texas-based GoSystem RS with document management systems, according to product manager Boyd Gackle. "We now integrate with three different document management systems - Creative Solutions' File Cabinet CS, Immediatech's GoFileRoom, a recent CSI purchase, and Documentum."
"We're basically trying to integrate with document management systems that our clients are using, and making the integration the same regardless of which of those they use. Most of our clients are using it to meet the requirement that they retain client records," he said.
Gackle said that GoSystem also integrates with SurePrep Express, a workflow application that helps firms increase the volume of returns that they can handle. "Data flows from GoSystem to SurePrep and back automatically, without performing multiple import/export steps," said Gackle. "It takes the clerical part of entering information and moves it from the tax professional level to the administrative staff level, and frees up the professional to assess complex tax situations rather than keying in data. It keys next year's data based on last year's information, and imports it to GoSystem RS so the professional is viewing a nearly complete return."
Web-based services are a significant growth area for Dexter, Mich.-based Creative Solutions, according to vice president of marketing Jack LaRue. "Last year we distributed more than 14,000 client organizers over the Web, with a 35 percent completion rate," he said. "This is more than double the average completion rate of 10 to 15 percent."
"The Web-based organizer captures the data digitally, and the information flows directly to the UltraTax return with no keying of information," he said.
With 1040 Web delivery, the tax return process can be completely paperless, according to LaRue. "The return is posted to a private client portal. The client has access to it anytime he needs it from the accountant's Web site, and the accountant's copy is stored in FileCabinet CS."
Creative Solutions has eased the burden on tax preparers to create portals and release organizers in bulk. "The tax preparer selects the password schema, such as the last four digits of the client's Social Security number and his zip code, so each client has a separate password. Then, when the accountant releases the organizers or tax returns to the Web, the system automatically generates e-mail to the client and lets them know it's available under their password; the password is never printed in the e-mail."
UltraTax is also integrating its 1040 program with PPC's 1040 desk book, and extending integration with RIA's Checkpoint. Subscribers to those products can link directly from the 1040 line in UltraTax to the applicable explanation in its sister company's products. Creative Solutions' entire accounting suite now integrates with RIA's GoSystem RS.
Making the complex simple
The theme for Plano, Texas-based Intuit's ProSeries is to make the complex simple, according to group product manager David Kramer. Last year, Intuit offered ProSeries Basic and ProSeries Express to complement its professional edition. "Each is focused on delivering simple solutions to accounting firms they target," said Kramer.
The Basic edition is designed for the smaller preparer. For next season, the preparer is given more control over printing, improved diagnostics, and a final review feature that scans returns for missing data and mistakes.
ProSeries Express is aimed at the preparer who concentrates on high-volume bank product and e-file returns. "Improvements to Express are all about speed," said Kramer. As with the other Intuit products, printing capability has been enhanced. Returns are faster to convert for e-filing.
The Professional Edition has added new business states, enhanced printing control, and categorization of forms to minimize scrolling. Coupled with the Client Analyzer, it offers data mining to identify clients for planning purposes. "The preparer can now print a short client organizer with just one click," said Kramer.
Easy to learn
Because Lacerte Software targets the firm with both seasonal and full-time employees, it is critical that it is simple and easy to learn, according to senior product manager Jorge Olavarrieta.
"We made end-to-end workflow enhancements, beginning with increased efficiency on simple tasks," he said. "For example, the program will use the same data for returns with common features, such as the same employer, to cut down on recurring data entries."
A like-kind exchange wizard has been added. The Client Tracker, introduced last year, has been improved to allow multi-employee firms to better manage returns. The Tax Analyzer, similar to the ProSeries Tax Analyzer, allows the preparer to identify clients who may be affected by tax law changes and to target clients who meet specific criteria for tax planning purposes. It also allows a comparison of Schedule A and Schedule C information to Internal Revenue
Service norms for similar taxpayers or business types.
Rockville, Md.-based ATX made radical simplifications, according to Ken Crutchfield, vice president of marketing.
"In the past you could buy any number of packages and forms," he said. "We simplified it to five primary packages - a 1040 package, which includes three states; 1040 Office, which includes all states and 1040 Kleinrock research; Max, which has 10,000 forms for individual and business returns; Max Office, which has everything in Max, plus Kleinrock Reference libraries; and Total Tax Office, with everything in Max Office, plus Kleinrock's TaxExpert suite. Basically, it's two flavors of 1040, and three of business returns with varying degrees of research added on top."
"We also added free and unlimited e-file for all the forms we have that can be e-filed," he said. In addition, the ATX depreciation module will now be easier to use and more efficient, offering customers the choice of whether to use an asset entry worksheet or the direct entry method for Form 4562.
The interview feature will be more comprehensive and will also be modular, according to Crutchfield, so that a customer can elect to use the interview feature for select portions of a return. Integration continues with both Kleinrock's tax research line and with ATX engagement solution, powered by CaseWare, and the accounting product line, powered by AccTrak21.
In addition to adding new flexibility within windows screens, Franklin, N.C.-based Drake Software has added a tax planner for multiple years, a document management system to allow the management of documents in a paperless environment, and a multi-office manager, according to chief executive Tim Hubbs.
"Our Windows looked a little 'DOSsy,' so we dressed it up this year, and gave it new flexibility within data entry screens," he said. "It's still the same user-friendly package."
The tax planner, document management system and multi-office manager are all included at no additional cost.
"The multi-office manager allows someone with three or 30 offices to see limited Web-based information and look at all returns in all offices," he continued. "A person managing a chain or a small or large group of offices can see the status of a return, what was charged, and if a discount was given."
Hubbs refuted the idea that users migrate to Drake or other mid-level tax software firms due to price.
"Pricing helps some, but there are a good number priced less than we are," he said. "People stay with us because we're able to process consistently, we add improvements for no additional charge, and we answer the phone with a live person consistently throughout the tax season."
Bellevue, Wash.-based Orrtax has enhanced its multi-office functionality, allowing managers to more effectively manage their operation, according to Stuart Lisk, director of product management.
"Every tax office has some administrator or owner, and our aim is to give them greater flexibility and operating efficiency," he said. "Last year we introduced Intellimanager, and we have continued to enhance it."
Intellimanager enables preparers using IntelliTax for Windows in a multi-office environment to manage, administer, control and report from a central location. It allows the administrator to configure bank, billing software and tax preparation options in one place and send them to the remote office. Intellimanager is sold as a separate module, and comes with the ability to manage up to five sites. An additional fee is charged for each site, said Lisk.
A scheduling option has been added for this year, giving the electronic return originator flexibility in scheduling transmissions twice a day, or per hour, or every 15 minutes. "The ERO doesn't have to be present to transmit the returns," explained Lisk.
An added feature allows Intellimanager to prevent or enable preparation of tax returns from a central location as a security measure. Additionally, it allows the administrator to lock down the pricing schedule to keep preparers at a remote site from changing fees on the screen. "This prevents the individual preparer from charging a greater fee and pocketing the difference," said Lisk.
Lisk said that Orrtax would continue to support Intellitax Classic, its DOS product.
Tracey, Calif.-based Petz Enterprises has enhanced the Internet-based product, V-Tax, that it developed last year.
"It's a Web-based application with a centralized data base," said Craig Petz, vice president for tax software development. "It's for tax offices with multiple locations. It allows a preparer with more than one location to deal with management and control issues from a central location."
CrossLink, Petz's desktop application, has been enhanced to make the e-filing experience faster. Refund loans can be processed within 24 hours, and once started, CrossLink transparently detects and automatically downloads any necessary updates, such as changes in tax forms and regulations.
Both CrossLink and V-Tax boast dashboards. The V-Tax dashboard shows information on all offices and all preparers, according to Charles Petz, vice president of the professional services division.
Petz has added a Spanish version of the client letter for the 2006 filing season, he said.
"Crosslink will also add support for the 1040-NR, to be completed by nonresident aliens in the U.S. on work visas," he said. "We have made significant modifications to the CrossLink report generator for creating custom reports, and for the coming season will also have expanded capabilities to prepare city tax returns, where required."
Keeping up to date
Randolph, N.J.-based TaxSimple offers automatically synchronized updates through the Internet, according to company president John Vora. "The user knows he has the latest edition of the software."
The preparer can also buy a particular state return over the Web without paying for the entire package, according to Vora.
TaxSimple also fully supports bar coding for any state, and includes tax planning capability in its basic program.
"It has two planning functions," said Vora. "One is a three-year comparison with projections into the following year; the second provides 'what-if' scenarios for the current year. The preparer can create up to 10 scenarios for each return."
Rome, Ga.-based TaxWise has redesigned its user interface to provide such features as context-sensitive help. "As you move through the forms, the window displays help specific to the line in the form that you're on," said Gene Goldenberg, TaxWise's vice president of marketing.
"The icons are larger and easier to understand, and the refund monitor has been expanded. It now recalculates the entire return after every entry. There are more automatic entries and drop-down menus, and a new quick link feature that takes you to the worksheet from which the entry came," he added.
The program has also added seamless K-1 pass-through, said Goldenberg. "As soon as you enter the employer identification number of an S corporation or partnership, when you do the personal return of an individual with a K-1 from that entity, the information is imported from the business return to the appropriate line for the individual."
TaxWise now offers corporate, S corporations, partnership and fiduciary returns for every state that requires them, Goldenberg said.
A new product, Fee Collect, permits tax professionals who file electronically to deduct the preparation fee directly from the client's refund. "It's not a loan," said Goldenberg. "It's designed for the accountant who does not want to offer a bank product. The bank receives the refund, deducts the CPA's professional fee, and transmits the remainder directly to the client's bank account."
TaxWise also introduced Audit Shield, a warranty that if a mistake is made that is not the taxpayer's fault, he will be reimbursed up to $3,500 of any penalties and interest, according to Goldenberg. "We're trying to open the e-file and refund process to people who didn't want to participate because they didn't want to offer refund anticipation loans," he said. "Now they can use the refund transaction to collect fees or offer tax warranties without being associated with expensive loan products."
Also new is Attain Mortgage, a TaxWise subsidiary, which allows the tax professional to become an employee and participate in the mortgage origination process. "It can provide a significant year-round source of income for the tax pro," said Goldenberg.
Kaysville, Utah-based TaxWorks is launching its own integrated accounting product, eGL Works, said Alan Haacke, director of public relations. The new program will integrate with TaxWorks tax preparation, and make life significantly easier for the accountant, he said.
TaxWorks has enhanced its paperless office capability. "ArkWorks is an archival program that allows the preparer to save all returns to a PDF file. It can be backed up to the preparer's own server or to our server in Utah," said Haacke.
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