Corporate Tax Preparation Software Reviews

By McDonald, Alysia | The National Public Accountant, April-May 2005 | Go to article overview

Corporate Tax Preparation Software Reviews


McDonald, Alysia, The National Public Accountant


"What have you done for me lately?" Although simplistic, this question summarizes the customer-provider relationship in tax preparation software. Customers demand intuitive operation, quick answers to problems and updated compliance with all tax law. On the flip side, it's a tricky proposition for providers to update software, enhance features based on customer input, and upgrade forms and current law--all while correctly training customer service representatives and updating appropriate application Help sections.

We review popular tax preparation software annually to help you sort through the complexities inherent in this fiercely competitive market. Vendors provide their current software, and independent reviewers examine the features and apply a single case study across the board.

Inherent in the process is an understanding that each software package targets a particular market segment. Therefore, a straight-line comparison of programs would be inaccurate and unfair. Instead, the reviews evaluate customer benefits and features that each product does well--or not--for its market segment.

The Internet has impacted tax preparation software more than any other trend, arguably even tax law changes. Why? In prior years, preparers purchased software on disk, loaded it on computers and moved into tax season. With luck, the in-hand version included most of the updates and features for the tax year involved. If not, the preparer had to know and manually change any outdated sections ... not exactly "full service."

The Internet has miraculously transformed even basic software into flexible, updateable, upgradeable tools. Although users still may order and use CD software, tax preparers now can take advantage of downloadable software, eliminating soon-obsolete software and all its documentation. The most progressive tax preparation software providers make Web-based updates available online instantly, and users can access improvements and eliminate time-consuming manual changes to tax forms immediately.

This year's case study tested the limits of this upgradeable feature. The study was unusual in its apparent simplicity: only one gross revenue number, one COGS total and one equipment purchase. The goal was to evaluate whether the software recognized a depreciation rule in effect beginning Oct. 23, 2004. Because the answer changes based on when the equipment was put into service, the software must appropriately calculate and integrate Section 179, regular depreciation and bonus depreciation, as well as the differences caused by simply changing a date.

Some of the reviewed software did not correctly handle Section 179 in earlier versions for 2004, but upgraded versions typically did a better--if imperfect--job, demonstrating the value of being able to download software updates within a tax year.

The following reviews aspire to answer the fundamental question, "What have you done for me lately?" For the most part, our 2005 software selections appear capable of responding to customer needs with a resounding, "Quite a bit, actually."

CCH ProSystem fx Tax Works for Small to Large Operations

Access Pertinent Tax Research from CD-Rom or Web While in the Application

The ProSystem fx software suite from CCH Tax and Accounting (CCH) offers an array of packages, including those that track fixed assets and capital gains. Other applications handle tax planning; prepare financial statements, and facilitate paperless office, Web building and practice management.

The star of the suite remains ProSystem fx Tax, a powerful, flexible program designed for any professional business, from the smallest sole proprietorship to the largest multi-member firm.

Getting Started

ProSystem fx Tax comes with an extensive instructional guide and several online tutorials, and is downloaded from a CD-ROM. Also included is an obsolete 3.5-inch "permission diskette," necessary for installation. …

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