RedGear Technologies — TaxWorks

From the April/May 2010 Review of Professional Tax Systems (Traditional Workflow).

RedGear Technologies offers a collection of tax practice programs, with its flagship TaxWorks system providing the core compliance capabilities for tax professionals. The system is available in bundles starting with the base 1040-only package, or with the addition of various business and other entities. In the 2009 version, the company introduced several new features, including the ability to add tick marks throughout the system, an audit trail for form entries on 1040 page 1 and page 2, the ability to lock completed returns, greater automation of multi-state returns and multi-office management tools.

This review looks at the TaxWorks Combo C bundle, which gives users compliance functions for 1040, 1041, 1065, 1120 and 1120S, with all states and the TaxWorks TaxPlanner system. Other bundles also offer compliance for 706, 709, 990 and 5500. Unlimited e-filing for individual and business entities is included. The program can manage filings for individuals with multiple state compliance issues, including part-year resident and non-resident, with new features helping to automate the process of applying state tax credits and allocating income. Additional features included with all TaxWorks packages include a fixed asset manager, appointment scheduler, client organizers, two-year comparisons, and a ZIP code database that aids in auto-fill features for city and state. Add-on programs are also available for advanced tax planning and document management.

The TaxWorks interface offers an uncluttered work environment, with access to the e-file center, management functions, document management and system utilities. Client engagements are accessed from a spreadsheet-style client selection screen that offers tabbed filtering of clients by entity type, along with sorting by various client data fields and search functions. From this screen, preparers also have quick access to return status functions, review processes and additional options. TaxWorks offers multiple interview-style input methods along with an interactive forms-based view that appears alongside the interview sheets and allows users to jump to data-entry fields, drilldown into associated schedules and worksheets, add notes or tick marks to form fields, or bring up field-specific instructions. A new option for data input was added this year with the STaR wizard, which streamlines basic entry functions, allowing administrative or lower-level staff to start return data entry, as well as to give refund estimates based on the basic information.

A form selection menu remains on the left side of the multi-panel return workspace, along with a return summary that displays live calculations for key client data, including AGI, exemptions, credits, net tax, and refund or amount owed to federal and state entities. The interface also provides a panel at the bottom of the screen that shows instructions on the currently active entry field. Diagnostics functions are provided in the program’s Review center. The program includes a new Multiple Office Management Tool that offers enhanced reporting and productivity tools for practices operating with multiple offices, with data transferred securely through the vendor’s servers.

TaxWorks provides unlimited e-filing of returns for all state and federal entities, and offers paperless document management functions through the add-on ArkWorks system. ArkWorks integrates with TaxWorks, allowing PDF copies of returns generated by the tax system to be filed in a client folder structure that is manually defined by the user. The system can also be used to store scanned copies of client source documents and related engagement materials, but does not offer automatic organize or data population features. The integration of scanning into the paperless management system does offer some optical character recognition capabilities (OCR), but the tax program does not specifically offer automated population of client data from scanned documents into returns.

TaxWorks offers data import from QuickBooks, Excel and other accounting packages. Client letters can also be produced as Word or Excel documents and, along with organizers and other communication templates, are offered in English and Spanish. An email utility in the program also allows these items and returns to be encrypted and electronically delivered to clients.

Along with the data import from QuickBooks and Excel, TaxWorks integrates with ArkWorks for digital client document storage and also with the TaxPlanner system. Users can offer loan and debit card refund products through several institutions. The system includes all form instructions, and users can access the TaxWorks Tax Institute for tax research functions, which offers free searching of a knowledgebase, plus fee-based options for having professional staff perform more advanced research tasks.

Within the program, several Help functions are available, including line-by-line instructions, tutorials, videos and other functions. The TaxWorks support website includes thousands of topical articles and how-tos on the system’s functions, along with program documentation, training videos, contact information for live support, and access to the TaxWorks Forums, an online message board community that allows users to seek advice from other users and the company’s support staff. TaxWorks also has a blog that the company uses to post insight on taxation news and program features. The program and all updates can be downloaded from the company’s website. All TaxWorks support staff are U.S.-based, with live support during tax season available from 6:00 a.m. to 10:00 p.m. MT M-F, on Saturdays from 6:00 a.m. to 6:00 p.m., and on Sundays from January 17 through February 14 from 9:00 a.m. to 3:00 p.m.

Pricing for TaxWorks starts at $1,495 for a 1040-only package with one state. The Combo C package reviewed here costs $1,995 for new users, and allows any number of users within the same office to work with the program. Discounts are also available for early renewals. The program is generally intuitive with little learning curve and is best suited to smaller tax offices with moderate to high volumes of individual clients, along with small business and less complex corporate filings. It also offers additional management tools for those with multiple locations during tax season. TaxWorks does not offer integration with traditional research programs and is limited in integration options with third-party programs. The system has only basic document storage capabilities and lacks auto-populate and auto-organize scanning capabilities.