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Review of TaxWorks - 2011

800-230-2322

www.taxworks.com

Best Firm Fit:

Small 1040-focused tax offices with limited to moderate need for additional entities.

Strengths:

  • All federal and state entities
  • Integrated bank products
  • Good client communication templates & e-mail integration
  • Data import from multiple accounting systems
  • Built-in invoicing
  • Available tax planner & document management system

Potential Weaknesses:

  • No client portals
  • Lacks document automation tools (scan & populate)
  • Limited tools for multi-preparer collaboration on complex returns

Executive Summary & Pricing

TaxWorks is a great package for small firms with high-volume 1040s and an occasional need for business entities. The package includes good data import from outside accounting packages, provides a good collection of firm tools for document management, asset management and planning. The vendor also offers good support. All versions of the program can be networked and used by any number of preparers in the same office at no additional cost. Pricing is competitive, with the system starting at $1,595 for a 1040-only system with one state, unlimited e-filing included. A system combining all states, the primary entities (1040, 1041, 1065, 1120, 1120S), the tax planner and unlimited e-filing is $2,595. A per-return model is also available.

 

TaxWorks was initially introduced as a service bureau in the early 1970s, launched its first 1040-focused PC version in 1978, and has since grown into a suite of tax compliance and tax practice management tools, including free e-filing, integrated bank products, multi-state filings, depreciation management, tax planning, appointment scheduling, tax research options, invoicing and client communications.

Core Product Functions/Features

TaxWorks is available in a variety of bundled formats, including the TaxWorks Complete package, which offers an all-inclusive compliance system that supports 1040, 1041, 1065, 1120, 1120S, 706, 709, 990 and 5500 filings, and all states with associated returns. Unlimited e-filing is also included, with tools for filing resident/non-resident states using the program’s income allocation tools. The system also offers limited support for New York City and a few Ohio localities.

The main TaxWorks interface opens into a clean workspace with primary file menus and a feature icon toolbar located across the top of the screen, including links to the program’s e-file center, management functions, client lists, asset management tools, federal and state forms, diagnostics, and the ArkWorks document management system. Client lists are presented in a subwindow with search options and excellent filtering by entity type, name and summary tax data.

Within client returns, TaxWorks offers windows that show data-entry worksheets and a form view side by side, but the form is static and does not allow for entry or drilldown. On the data-entry sheets, however, users can jump to underlying forms, schedules and worksheets, and right-click options allow adding notes to any form field with the ability to mark items as estimated or to access line-specific Help, instructions and a calculator. Field instructions also appear below the data-entry sheets.

Preparers can choose from three data-entry sheet types, including Advanced, Lite and EZ, depending both on the complexity of their client and the skill level of the preparer. A Spanish version is also available, providing several form input screens as well as client communications in that language. A forms menu tree on the left provides quick movement to forms, with tabs allowing users to view all forms, common ones, those associated with the current return, or to show them by type. A return summary panel also remains on screen, showing real-time AGI, deductions, exemptions, taxable income, tax, credits, projected refund/amount owed, and state balance.

AMT rules are built in, and during entry of taxpayer dependent information, the program offers quick access to adding EIC information, as well as adding a kiddie tax (8814) form. A tool is also available for comparing MFJ vs. MFS filings. The system supports extensions and amended returns. 4.5

Paperless Workflow

TaxWorks includes tools for digital document generation, including the ability to print/save to PDF as well as the optional ArkWorks document management system (included with some bundles). The program does not offer scan and organize/populate tools or directly integrate with third-party options, but firms can use such systems from Copanion and SurePrep to automatically generate digital client workpapers and then manually enter data into the program.

ArkWorks offers customizable filing systems and the ability to scan and attach any type of document or file to a client’s folders, while a search engine within the document management system simplifies finding specific items. The add-on also offers check-in/check-out features to prevent overwrites, an extensive audit trail of file activity and encrypted email functionality. Users can add notes, annotations and highlights to PDFs, while retention tools allow users to efficiently manage archiving. Both the document management system and the main TaxWorks tax compliance system offer user-level security settings that enable password protection of individual client returns, locking of finalized returns, and specific feature access rights for preparers and staff.

Additional paperless features include unlimited e-filing and built-in client communication templates that allow for emailing directly from the program through Outlook, Outlook Express, Windows Mail or even web-based email programs. K-1 data can be imported from business returns also prepared within the program. The system does not offer direct web-based integration with financial institutions for import of client data, and client organizers are print/email based, not allowing for direct import into the client’s return. Business and personal financial data can be imported from RedGear Accounting, QuickBooks, EasyAcct and Excel, and CSV import mapping is available for other programs including trial balance systems. Free data conversions are available for users of most professional tax programs. 3.75

Integration/Import & Export

TaxWorks offers good integration between the various entity modules, including the previously mentioned K-1 import and kiddie tax returns as well as the ability to import data from multiple accounting packages and e-mail communication tools. The system also directly integrates with the ArkWorks document management program, and the included asset management utility provides multiple books and more than 60 depreciation methods for calculation of depreciation, including recent changes to Sec. 179 and bonus depreciation. TaxWorks includes two-year comparisons, but the company also offers an optional tax planner that can share data with the compliance package and offers up to five scenarios across five years, with users able to quickly see the effect of changes in income, deductions, filing status and other factors. The planner automatically performs calculations and offers projections for federal and state tax and AMT.

The tax system offers quick access to field and form instructions, and offers research through the TaxWorks Institute, which provides searching across thousands of tax-related articles as well as the ability to save tax questions and previous queries. The system includes federal and state primary source materials, including publications, code, regulations and rulings. Research assistance is also available, with per-use options for asking advice from tax experts or having them provide more extensive research into complex taxation situations.

TaxWorks offers integration with Santa Barbara Tax Products Group and Republic Bank, with support for RALs, refund transfers and pre-paid debit cards. The FeeDirect system also allows firms to have their preparation fees deducted from taxpayer refunds. The financial products are the only built-in payment acceptance function, although the system does offer invoicing and price structuring based on forms and other firm services. 4.25

Help/Support

TaxWorks provides good in-program assistance, with abundant right-click menu options for accessing directions, program Help and other resources, including online training videos, reference manuals, tutorials by entity type, and the vendor’s online support center, which has additional training videos and features including an online knowledgebase and access to the TaxWorks Institute. Live webinars are also available. More formal training options, including CPE-eligible in-person seminars, are available for an additional cost, but users can also connect with and learn from TaxWorks representatives at many tradeshows.

All company staff are U.S.-based, and free live and web-based support is included with all versions of the program. Tax season support hours are weekdays 5:00 a.m. to 9:00 p.m. (Mountain Time), Saturdays 7:00 a.m. to 6:00 p.m., and Sundays in January and February from 9:00 a.m. to 3:00 p.m. The program can be set to automatically download updates or users can install them from the support website. The program is not offered in a web-based or hosted format, although hosting may be available from third-party application service providers. 4.5

Executive Summary & Pricing

TaxWorks is a great package for small firms with high-volume 1040s and an occasional need for business entities. The package includes good data import from outside accounting packages, provides a good collection of firm tools for document management, asset management and planning. The vendor also offers good support. All versions of the program can be networked and used by any number of preparers in the same office at no additional cost. Pricing is competitive, with the system starting at $1,595 for a 1040-only system with one state, unlimited e-filing included. A system combining all states, the primary entities (1040, 1041, 1065, 1120, 1120S), the tax planner and unlimited e-filing is $2,595. A per-return model is also available.

2011 Overall Rating 4.25

 

Product Delivery Methods:

On-Premises

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