Tax Software Reviews

Top Tax Software Reviews

tax software reviews
Tax Software Reviews

If you have a tax advisor or accounting practice, you know that the tools you use are critical to your success. The right accounting resources and tools will let you provide your clients with the best possible service, help identify potential tax savings, and help you identify mistakes or missed opportunities.

Yet, not all tax software is created equal. Some suites have greater functionality and features than others, and some are simply more-used in the marketplace.

Let’s take a look at some of the practice management packages out there, and see how they’re being used by accounting professionals today. The data for these tax software reviews comes from the 2011 tax preparation software survey by The Tax Adviser and the Journal of Accountancy.

Tax Software Reviews –
Most popular products

When it comes to professional tax software, there are three packages that make up the vast majority of professional use: ProSystem fx Tax from CCH, Lacerte from Intuit, and UltraTax CS from Thompson Reuters. These three make up around 75% of the marketplace.

The remaining 25% of the professional tax software is split between the following:

  • ProSeries by Intuit
  • GoSystem Tax RS by Thompson Reuters
  • Drake by Drake Software
  • ATX by CCH Small Firm Services
  • Tax Works by RedGear Technologies
  • Seven additional products, each being used by less than .5% of professionals

This is more or less the same as it’s been for the past several years; it would seem that tax professionals are, overall, satisfied with the choices they’ve made in the software arena, and more likely to go with one of the three top-tier, full-functionality titles rather than something else down the list.

Who’s using tax software

Each of the tax preparation software packages caters to firms of a particular size, although some of the products do just fine across the range of firm sizes.

Let’s take a look at some of the relevant numbers:

  • Lacerte is used primarily by firms that have between 2 and 20 tax preparers. Approximately 20% of Lacerte customers are one-person firms.
  • The most widely used software for one-person firms is ATX. 56% of the users of that package are sole practitioners.
  • GoSystem Tax RS is at the other end of the spectrum. 37% of the users of that package involved firms of more than 500 preparers. That also makes GoSystem Tax RS the one package in the list for which most of the users of the package had no say in selecting it.
  • A majority of tax software users saw between 50% and 75% of their business from individual tax returns. Almost all of the users prepared business returns, and about half of the users said that between one quarter and one half of their business was comprised of business returns.

This gives you a good idea about which packages seem to work for which size firms.

Tax Software Reviews- Finding the Right Balance

Why professionals pick a particular software package

There are two principal factors that tax professionals say are important in choosing a software package: price and ease of use. IT would seem that by and large the packages have lived up to this goal. 94% of UltraTax CS users intend to use the package again during the next tax season. That number drops slightly to 89% for users of ProSystem fx, and then again to 84% for users of Lacerte.

Drilling down into the data, you can see that ease of use is the most important attribute that users appreciate from their tax software. Around 30% of users say that ease of use is the primary reason for using a given software.

Interestingly enough, for users who controlled the software selection process, high ratings were given for ease of use on whatever package was in place. For those who weren’t involved in the software selection process, lower ratings were typically given.

In the ease of use category, ProSeries and Lacerte are the two packages that tend to be rated the highest.

The number of forms available in a package and its comprehensiveness was another important factor in selecting tax software. ProSystem fx and GoSystem both rated highly in this area, and both of those packages are marketed as full solutions offering both tax and compliance.

Interestingly enough, very few tax software users cite a lack of forms or comprehensiveness as the least-liked feature of their software. Users seemed to be realistic about whether their software had all of the forms that they would need access to. In particular, more than 50% of GoSystem users and 43% of ProSeries users indicated that their software specifically did not have the forms they needed. The top-tier software packages fared much better, with UltraTax at 10%, Lacerte at 26.9%, and ProSystem fx at 23.3% in this area.

The area that users tend to dislike the most about their tax software is, to no one’s surprise, the price. For customers who switch tax software, price is the most common factor cited.

Users tend to complain most loudly about Lacerte and UltraTax, with more than 50% of users being unhappy with the price point. These two are followed closely by ProSystem fx, where about 45% of users are unhappy.

At the other end of the price spectrum, nearly 50% of all TaxWorks users cite price as one of the most compelling features, with Drake coming in at around 48% and ATX at just over 43%. Users who switched from these products to others typically show concer about the accuracy of the software or its ease of use.

Technical issues

Technical issues are a significant concern for tax software users. There are several areas in which technical issues can have a big impact on the speed and accuracy of return preparation:

  • Automatic, accurate data transfer. The ability to pull data from one form and put it into another is essential. UltraTax, ProSeries, and Drake all score the highest in this regard.
  • Form updates. As forms are changed, the software has to be able to make the appropriate updates. Drake scored highest in the update area, while GoSystem and TaxWorks were at the bottom end of the spectrum.
  • Installation and system updates. While this issue isn’t something that tax software users have to deal with on a daily basis, it can affect overall usability of the software. Drake scored the highest in this area, although all of the software packages listed received positive reviews for installation and updates.
  • Paperless electronic filing. The ability to file returns electronically and to do so in an easy manner is important, too. Here again Drake ranked at the top of the list, but all of the systems except GoSystem ranked well overall.
  • Integration. This is one area where most of the tax preparation software packages have room for improvement. Integration with other software is a key issue for some tax software users, yet only UltraTax received a decent rating in this regard.
  • Tech support. Approximately 4 out of 5 tax professionals needed technical support from the manufacturer. Users rated this support as easy to obtain in more than 75% of cases, and the support was described as good or very good in almost the same numbers. ProSeries and ATX had the lowest incidence of needing tech support, while Drake and TaxWorks users most often found themselves in need.

Overall, it seems most users of professional tax software seem happy with what they have. The market leaders (the big three packages) each seem to have their own niche as far as firm size, as do the others. Depending on your firm’s priorities, it should be a relatively easy process, based on this data, to find the one that’s right for you.

When you become a Certified Tax Coach, you get the added benefit of immediate feedback on these types of topics from your peers across the country.  Wondering what a tax software change will mean for your business?  Why not connect through our message boards to get ideas and support.

Some rights reserved by Jeff Sandquist

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