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Intuit — Lacerte Tax

From the April/May 2007 Review
of Professional Tax Preparation Systems

As one of the leaders in the mid- to upper-end tax preparation market, Intuit’s
Lacerte Tax system has not sat idly by, but rather has continued to evolve into
one of the most fully featured programs on the market, offering support for
every entity with year-end reporting requirements, as well as many productivity-enhancing
professional tools and features like an integrated document management system,
tax planner, tax analyzer, research and bank products. Lacerte includes unlimited
state and federal e-filing for individual returns and federal e-filing for other
entities, and can be used as either a stand-alone or networked system. The program
is module-based, allowing users to select the entities and add-on features they
want. The system costs about $7,000 for a package that supports all entities
for a four-user office. Lacerte modules or even the whole system can also be
used on a pay-per-return basis.

Learning Curve — 4.5 Stars
The Lacerte system opens to a client selection screen that displays name, TIN,
status and state, and includes the ability to filter by client status, preparer,
e-file status and other options. While this serves as a method to access client
returns, the Client Tracker provides much more summary information for monitoring
return progress and activity. In addition to more than two dozen icons across
the top, tabs are available that let the user quickly move between the primary
views and functions of the Lacerte system, including the Client Tracker, Detail
and Forms views, Diagnostics and Analysis. The Help Me panel across the bottom
of the screen offers a plain language question search function, as well as answers
to common questions, tech support updates and line-specific assistance. When
working within returns, a panel on the left displays a linked menu of all forms
that are included with the current return as well as related forms that may
be necessary. A full list of available forms is located via a button on the
toolbar. The program also maintains client contact information on-screen at
all times.

Although Lacerte provides a form view of client returns, data cannot be entered
onto the forms. Actual entry of client data is performed on interview sheets
that are generally designed to follow the flow of a return or supporting schedule
or worksheet, with a centralized menu that categorizes data-entry tasks by subjects
such as Income, Deductions, Credits, Payments & Penalties, Taxes and other
information. During data entry, the system is smart enough to know what fields
are irrelevant based upon prior data entries (like skipping spouse data when
filing status is single), and many common fields automatically build a selection
list. These include city, state, employer, EIN and other fields with data that
is likely to be common across multiple client returns, and the system remembers
prior entries and allows the user to select an entry from the list or to put
in new information.

Navigation through the system is generally intuitive, but some screens lack
a “next” button or other step to move forward in the process. After only a few
minutes of use, however, the other navigation functions and an easy shortcut
to the main menu remedy the situation. New users may also be overwhelmed by
the system’s many features and screens, so some form of training on the program
will likely be necessary.

Use/Workflow & Productivity Tools — 5 Stars
For TY 2006, the company debuted one of the most impressive new workflow tools
to date: Source Doc Auto Entry, an add-on system that automatically scans and
populates tax returns with data from client W-2s and 1099s. This is the wave
of the near future, since it has the potential to dramatically reduce data-entry
time for many firms and, as such, many other software vendors are busy adding
similar features for next year. In addition to this remarkable new function,
Lacerte includes many other general workflow devices that aid in the entire
return cycle, from client interaction, through data entry, return preparation,
review, diagnostics and analysis, as well as firm productivity functions to
help assess how well individual preparers and groups are performing.
Within returns, diagnostics and analysis functions are one click away, allowing
the professional to easily check for errors or even compare a client’s Schedule
A or C to IRS norms, thereby identifying potential abnormalities that otherwise
might be missed. Additionally, it is easy to access return summaries, a forms
view, prior year returns, the system’s appointment scheduler, document management,
tax planning and research functions.

Lacerte’s data-entry fields make it easy to see where data came from, whether
preparer-entered, calculated or transferred, with the ability to override data
for authorized users. All return activity, obviously including overrides, is
documented by an audit trail that notes user data entries and changes. All data-entry
fields include links to supporting schedules and worksheets, and the program
enables professionals to add review checkmarks or “sticky notes” to data fields.
Lacerte’s Missing Data function aids during initial data entry and review, providing
users with a report that aggregates all missing data and that can be sent to
the client from within the system, reminding them of the documents or information
that is still needed to complete their return. Client’s can also utilize electronic
tax organizers that automatically transfer data into their return.

Integration/Import & Export — 4.5 Stars
Lacerte shares data between all of its modules, performing calculations in real
time as data is entered. The program also integrates directly with the Lacerte
Document Management System for paperless storage of client folders and can link
with QuickBooks to pull in business clients’ financial data. It also includes
an optional built-in trial balance utility. Tax research is available through
the Lacerte Research Library, which offers line-by-line information and guidance
from within the tax program, while an alerts system notifies the user of clients
that may be affected by new tax legislation. An icon link to
on the toolbar provides another research resource. The program can export into
a variety of text formats, as well as to PDF.

Support/Training & Help System — 4.5 Stars
Most tasks within the system cue up Help topics and other guidance specific
to that task in the Help Me panel that remains at the bottom of the screen,
and users can easily find additional information and research by right-clicking
from any field. The company offers web-based and live training options as well
as an online support center. All support staff is based in the United States.

Relative Value — 5 Stars
Lacerte is a workhorse capable of handling the most complex and interlinked
individual, business and special entity returns. With its robust workflow processing,
tax planning, research, practice management and review tools, the system is
geared primarily toward year-round accounting and tax practices with multiple
networked professionals working within the system. The latest innovation added
to the system, the Auto Source Doc feature that recognizes forms and pulls data
from them when they are scanned, will be especially useful to firms with more
organized administrative roles. That said, the system is scalable down to smaller
firms and is even available in a pay-per-return model.

2007 Overall Rating — 4.5 Stars