The number of tax software companies has really taken a hit over the last 20 years. One estimate had the number of tax software companies at 120. Well now you have about 30. Of course you have your individual market for consumers, however, that isn’t what we are talking about here.
We are talking about professional tax software. The market has really consolidated. First you have your transmitters. Transmitters are the companies that actually program the software. There just are not too many of those companies left.
|Software||Price||Data Entry Style
Form | Interview
|All States Included
*No up charge
|All Federal Tax Form Included||Unlimited 1040 E-file||Unlimited E-file
*Includes all states and corporate returns
|UltimateTax 1040 Package||$588|
|UltimateTax 1040+ Corporate||$828|
The prices above do change. The prices are reflective as of the summer of 2017.
Tax preparers who file more than 11 returns in a calendar year must use tax software to e-file. Otherwise, you risk running afoul of federal law. There are some enormous benefits to this rule. Using tax software is likely to improve your accuracy when completing tax forms. The software will prompt you to revisit and correct any detail before sending an e-file.
Each brand of professional tax software can help you e-file accurate tax returns for your clients. But, specific features for each software, as well as the way these features work, can vary.
Some software has extra features that only a small fraction of customers use. Often at a premium price. Save money now by reviewing if you will use the features before selecting your next tax software. One of the most important factors is to ensure the software supports all the forms you need.
Read on to learn more about how these tax software brands compare. Also what professional tax preparers nationwide have to say about each software's accuracy and ease of use.
The Journal of Accountancy published a tax software survey that asks for responses from over 3,500 CPAs who prepared tax returns during 2017. This survey revealed some broad changes, such as a noted decline in the number of clients who reported identity theft. In the Journal’s 2016 survey of CPAs, two-thirds of survey respondents state that they experienced at least one rejected of an e-filed return due to fraudulent use of the filer’s Social Security Number. This rate decreased in 2017. Though identity theft remains a pervasive problem for taxpayers and tax preparers.
Another half of respondents said they had difficulty obtaining client's identity protection (IP). Personal identification numbers for tax returns prepared in 2016. Clients are not the only ones who run into trouble when it comes to tax fraud. Scammers have begun targeting tax preparers themselves by posing as software vendors.
One way to cut the risk of becoming involved in a tax software scam is to learn more about the most popular brands of tax preparation software. This will give you the tools you need to select the software that best fits your business. But will also help you identify vendors who may not have your best interests in mind.
This versatile software can appeal to a wide range of tax professionals. UltimateTax includes data entry of both form mode and interview mode. The context-sensitive help will cater to any new student and seasoned tax professional in the industry.
Tax preparers who are new to the industry find this software easy to navigate and learn. The interview mode can be especially helpful for new preparers who may need some guidance. This takes much of the trouble out of preparing the first few returns.
UltimateTax is the most competitively priced software for being one of the most feature-rich tax software options. It includes unlimited e-file for all states and federal returns at no additional cost.
For those on the go, Ultimate 1040 Package work on Mac or PC anywhere with a 3G or better internet connection.
Experienced professionals benefit from its ability to prepare all different areas of the corporate world. CPAs and EAs can use UltimateTax with great success. However, it may be missing some specific pieces that other Corporate focused software may offer.
TaxWise utilizes both the interview mode and form-entry mode to request tax information. This can appeal to new tax preparers. It includes a breadth of corporate forms allows TaxWise users to handle both business and 1040 tax return preparation with ease.
Its offerings can appeal to tax preparers at all experience levels. TaxWise price tag can price out many entry-level professional tax preparers. Many may instead opt for an inexpensive option that presents most of the same features.
Drake software is purely focused on tax professionals with many years of experience. CPAs and EAs use this software for multiple years, and primarily don’t ever change to another software pending some catastrophic problem with the software.
Many tax professionals swear by Drake Software, although it can be intimidating to new users. New preparers find it overwhelming and intimidating having to know where things go on a return.
Its form-entry interface is old-school, but loyalists are unlikely to ever switch to another product. Drake can integrate many complicated and confusing changes in tax law without affecting the way the software operates.
Drake tends to appeal to a budget-conscious group. Drake users selected “price” and “product support” as their most-liked features. Drake enjoyed the highest rating among CPAs, with 4.5 of 5 stars.
CrossLink is very similar to many other forms based software in this industry.
A form-based, rather than interview-based, software. CrossLink appeals to the tech-savvy. It includes features like a signature pad and 2D barcode scanner. CrossLink presents a nice interface, and its middle-of-the-pack price makes it accessible to most professional tax preparers.
This price can seem like a surprise to those who usually pay the same (or more) for a less "flashy" software. Crosslink tends to attract multi-office professionals, due to their management software they utilize for their customers.
Proseries’ integration with the Intuit suite can appeal to those who have Intuit-savvy clients. The integrations can make the tax return preparation process a breeze. Even for those who don't have much Intuit experience, this software is accessible to everyone from the novice preparer to the seasoned pro.
However, a third (29 percent) of ProSeries users indicated this software did not contain all the forms they need. For tax preparers who handle a diverse group of clients, this deficiency may have an impact. Only 207 of the 2017 Journal survey respondents indicated they switched their tax software from the previous year. Most former ProSeries users switched to UltraTax or Drake.
TaxSlayer’s software holds great appeal for tax preparers who are starting out in the industry. Also, great for those who have not quite mastered extracting detailed information from clients without many questions at the ready.
The interview-style interface also makes the preparation process take longer. If you are in a time crunch, you may have to click through dozens of screens to get to the input field you want.
Seasoned preparers may feel confident enough to switch to a form-based entry software. This will cut the amount of time spent on each return and make it easier to ramp up their client base.
TaxAct attracts new customers due to its low price all inclusive packages. TaxAct’s software interface is easy to master but may be a bit frustrating for those who have been in the industry for a while.
Seasoned preparers who like to go at their own pace rather than follow through a series of questions to make a form entry.
Olt Pro has expanded from a cloud tax software program to include both an online and desktop versions. Appealing to a broader audience in the process. A competitive pricing structure for low-volume customers makes Olt a good option for those whose services don’t fit into one category. Olt is affordable when compared to other options. Even without leveraging the low-volume pricing structure.
Olt is also popular among 1040 users with its interview-based entry mode. Although its business forms are somewhat limited and tend to draw less of a corporate crowd than other software options.
The 2017 Journal of Accountancy survey rated ATX as the most likely software to include all necessary forms. This helps tax preparers avoid the scramble to find a little-used form needed by a client. These forms come at a good value, as well; 26% of ATX users indicated they liked its price.
ATX includes most business forms. As a result is popular with tax preparers who focus on corporate and business returns. This popular software uses the form entry mode rather than asking interview questions. This gives users the flexibility to skip back and forth between sections as needed.
MyTaxPrepOffice is an online software. The ability to store and send information to the cloud can be a boon to professional tax preparers who are always on the go. Tax preparers can input data and make tweaks from about anywhere with an internet connection.
Older tax professionals tend to stick with software that installed on a desktop. Although, the increasing online presence may begin driving more and more users toward online options. With a price tag of under $1,000, this software is affordable even for those who have only a handful of regular clients.
Many CPAs and accountants flock to UltraTax because of its full toolbox. This software can manage tax preparation along with payroll management and asset management.
In the 2017 Journal survey, only 6.6 percent of UltraTax CS users indicated that this software did not contain all necessary forms. This makes it a good option for professional tax preparers who handle a broad array of complex corporate and personal returns.
CCH’s ProSystem fx focuses on automation. It appeals to busy tax preparers who are managing inflows and outflows of cash subject to various tax treatment.
Eight (of 41) write-in complaints in the 2016 Journal of Accountancy survey addressed ProSystem fx’s automatic software updates. Bringing up that these updates occurred at inconvenient times and required users to log out of all systems until the updates were complete.
These issues affected a small number of survey respondents. They serve as a reminder to not to put off completing tax document (or filing an extension request) until the last minute. Interruptions can create needless frustration.
The CPA Journal conducted an annual survey of practitioners in New York State. The survey asks for their opinions and concerns on the tax products they used during 2016.
This survey sought some different responses than the Journal of Accountancy survey. A more significant focus was on more subjective measures. For example; the effect of state and federal delays in the release of necessary tax forms, the impact of frequent software updates, and the cost-to-value balance for each of the seven highest-rated tax software. This includes ATX, Drake, ProSeries, TaxAct, TaxSlayer, TaxWise, and UltraTax.
Most respondents indicated customer support was a deciding factor of why they switched from one brand of professional tax software to another. At least half of all respondents claimed they used email to contact customer support at least once. Another 47% of respondents indicating they used online support with the same frequency. Yet, the telephone still remains the preferred method for tax preparers to pursue answers. A staggering 94% of respondents who sought customer support in 2016 doing so by phone.
There's no one perfect software for every situation. Each tax preparer will need to weigh the value of the software to find the right fit.