Best Firm Fit:
1040-focused practices looking to broaden their services with integrated write-up and tax planning options, as well as retail environments with multiple locations.
- Exceptional live support
- Affordable all-inclusive pricing includes all entities, states, e-filing, plus tax planning, document management & write-up with ATF payroll
- Multi-office manager sync system
- Free basic websites for firms
- No client portals
- Limited document automation tools (scan & fill)
- Limited internal collaboration tools
Drake Software’s tax practice suite offers an all-inclusive system with broad compliance support and built-in tax planning, write-up and document management features. Drake has routinely won our Readers’ Choice Awards for best tax prep system, with users consistently pointing to the vendor’s live support staff, as well as the benefit of the all-in-one package. Over the past few years, Drake has expanded its offerings to include a debit card method of refund disbursement, a web-hosted version of the tax system and 2-D barcode scanning of W-2s and K-1s. (The company noted that it believes this approach provides greater accuracy than OCR-based scan and fill systems.)
Core Product Functions/Features
Drake Tax includes all federal, state and D.C. compliance, with unlimited e-filing for all individual and business returns, as well as nonprofit and estate and gift tax reporting. The system also supports virtually all local taxing jurisdictions, including localities in New York, Ohio, Michigan and Pennsylvania. Forms, instructions, client communications and live support are available in English and Spanish.
Drake’s interactive interface opens to a home page that provides a client selection list based on engagements that can be customized and filtered by the preparer (Personal Client Manager), shortcut links to recently worked-on returns, the program’s appointment scheduling system and system notifications. An icon bar at the top of the screen also provides links to tax research, a forms view and the Client Status Manager, which allows creation of firm-based rules and status selections, including billing options and an audit trail.
Data-entry functions take place on interview-based worksheets that are accessed from a return management screen that offers tabs for moving between entry categories for general, income, adjustments, credits, taxes, state, misc and other forms. Each of these sections has text-based links that allow jumping directly to data entry for specific items or for moving directly to form worksheets. Actual form views can be brought up with one click, but data entry cannot be performed directly on the forms. From the return management screen, users can also use a one-click MFJ/MFS comparison or access document management functions, the built-in tax planner, data import tools and e-mail features.
Unlimited e-filing of federal and state returns is included, with management and tracking of acknowledgements, receipts and other information available from the EF toolbar. The system automatically checks for applicability of the AMT and also includes a simple kiddie tax export feature for generating form 8615 and keeping it associated with the parents’ return. 4.75
Instead of an OCR-based “scan and populate” system, Drake offers 2-D barcode scanning for W-2s and K-1s that allows the information to be pulled in from encoded forms. It also offers spreadsheet import of Schedule D data. The program also offers a document management system that provides an expandable folder format similar to Windows Explorer that automatically stores returns generated in the program into year-based folders, and also allows preparers to store any other file types, such as scanned supporting documents and spreadsheets.
Returns generated by the program can be viewed and saved as PDFs, but with no annotation or tickmark functionality specific to the program. Documents are organized by name and type, or can be organized as wanted, but are not automatically organized by standard tax preparation workflow order. A scanner integration feature is included on the document management work screen. Users can also link documents, and the utility offers direct emailing of returns or documents from the program. Drake includes customizable client letters in English and Spanish.
Security features enable firms to use password protections to limit user access rights to specific returns or areas of the program, including override rights, while maintaining an audit trail of user actions on returns. The Multi-Office Manager utility offers support for firms with either multiple locations or remote staff, allowing data to be synched back to the home office system. No online portals or electronic organizers are offered for direct collaboration and document sharing between the firm and clients. Data from QuickBooks files and a trial balance import tool can bring in information using an Excel template. Free data conversions are offered to firms switching from most other professional tax compliance packages. 3.75
The various modules in Drake Tax offer integration that allows for import of K-1 data across returns, as well as quick generation of kiddie tax returns. The program’s trial balance and spreadsheet import tools are fairly easy to use and offer simplified mapping of data into appropriate worksheets. The tax planning utility provides multi-year scenario testing with built-in rules for AMT, taxation limitations and other factors. The Drake system also includes a basic Fixed Asset Manager that offers books for federal, state, book and custom, plus eight report types, including depreciation schedules, listings, Sec. 179, dispositions and summaries. As previously noted, a document management system is also built into the program.
Online tax research is also included when you purchase Drake Software and includes quick references and tools. Drake partners with multiple financial institutions for bank products, including RALs, direct deposit check and debit cards, and firms can have preparation fees deducted from refund proceeds. Other methods of client payment, such as credit card services or check scanning, are not offered. The program includes extensive fee management options and client letters, plus the ability to set custom status types for tracking client payments. It also offers billing statement customization, including application of sales tax where necessary. 4.25
Drake is often applauded for its live and all U.S.-based bilingual customer support, with no automated phone systems and response times generally under 10 seconds. Live support is included with the program and is available during tax season from 8:00 a.m. to 10:00 p.m. (ET) on weekdays, and 8:00 a.m. to 6:00 p.m. on Saturdays. The preparer calling for support must have access to the firm EFIN. The program’s built-in assistive features include an extensive Help/search utility, tutorial, setup assistant and the full user manual, while line-specific form instructions can be brought up using a right-click menu.
Drake’s online support center includes full user manuals and documentation, a knowledgebase, FAQs, state-specific resources, information on preparer regulations, sample 7216 letters and even a free sales tax calculation lookup engine for all U.S. jurisdictions. The company also provides several educational options through its e-Training Center, which includes interactive tax courses, tutorials and practice returns for individual, corporate and partnership returns, in basic and advanced levels. All courses are free and available for CPE credit. Users can also download program updates (or these can be set to automatically update), and if the firm is using the free preparer website that Drake offers its users, they can select website tools from the support center.
As an alternative to the locally installed program, Drake started offering a hosted version of its tax system in 2009, providing firms with the benefits of web-based access to the program, without having to manage installations and updates. It is hosted on Drake’s secure servers. 5
Executive Summary & Pricing
The Drake system provides virtually everything a tax practice needs at one simple cost, making it a good turnkey solution for new firms or those looking to enhance their tax services with planning, write-up, after-the-fact payroll and other offerings. The system is best suited to smaller and mid-sized practices primarily focused on 1040s, with some moderately complex returns, as well as a growing business client base. Drake also offers excellent program support and tax training options. The system costs $1,495, although various discounts are often available and early renewal pricing is under $1,095, making it one of the most affordable fully comprehensive professional tax suites on the market. Pricing includes any number of users within a practice. A pay-per-return model is also available, with each return costing $19, inclusive of federal and state e-filing.