TaxWorks provides support for preparation of all state and federal year-end reporting, including 1040, 1041, 1065, 1120, 1120S, 706, 709, 990 and 5500 and their state equivalents. Software developer Laser Systems offers the program in individual modules or in suites focused on individual, business and the other entity types, bundled with the company’s state modules and tax planning software. The approximate cost for our prototype firm (see page 8) would be $3,995. TaxWorks uses a site license approach, which means the software can be used by any number of networked users in the same geographic office location at no extra charge. This pricing does not include e-filing transmission fees, which vary from $1 to $5 per transmission with volume discounts available. TaxWorks is also available on a pay-per-return basis (‘Per Unit Pricing’ is their term).
Learning Curve ‘ 4.5 Stars
TaxWorks sports a well-designed primary interface that by default opens to a client selection window with options for creating new clients, opening existing ones, or performing various other tasks, including batch processing, accessing organizers and reviewing, copying and moving returns. The client list section provides tabs to show clients by type of primary tax form and includes search capabilities and a sortable spreadsheet list. Within individual returns, TaxWorks offers three data-entry methods, although all are essentially interview-based, but provide options for preparers with varying levels of expertise and types of returns required. Via this method, the Advanced, Lite and EZ format prepares 1040A, 1040 and 1040-EZ forms, respectively. These multiple options are not available for data entry for corporations and other entities. Within all modules, however, the screen is divided into multiple panes, with a primary work area in the middle of the screen, an output view on the right, and two panels in the left column: a form selection menu that can filter by type of form or other factors, and a Return Summary that provides a synopsis of key client data, including AGI, exemptions, deductions, credits, tax rate and federal and state tax due or overpaid. All of these panels are resizable and can be minimized or customized to show alternate information or formats.
The general navigation required to progress through a client return seems more designed for professional preparers with at least fair knowledge of required forms, as the system does not direct the user through data-entry steps. However, novice or temporary data-entry staff should be able to understand the progression with minimal training, simply by following down the form tree menu and determining applicability of available forms and schedules.
Use/Workflow & Productivity Tools ‘ 4.5 Stars
For tax professionals, the design of the TaxWorks interface should prove to be useful, since it provides very quick access to all forms and provides an on-screen summary of key financial data related to a client’s return. While the client selection screen does not provide information on acknowledgments, it does offer very good filtering and search functions that would be welcome to any firm with more than a few dozen clients. The system also includes several enhancing functions, such as ‘smart’ entry fields that store data entered into certain form lines and offering the data as a list for future entries. The system also includes a ZIP code database that automatically fills in city, state, county and school district fields, and prepares such associated returns.
TaxWorks enables use of notes and tickmarks, as well as movement from data entry to a detailed summary statement for specific fields. An optional appointment manager offers multiple calendar views that can be used for client and staff scheduling functions. The program comes with an integrated asset management system that supports partial and mass dispositions and like-kind exchanges, and offers 60 depreciation methods. TaxWorks allows generation of returns into *.PDF format, which enables electronic storage of client returns and enables electronic transmission of the returns to clients. Additionally, the system can import data from electronic client organizers. TaxWorks also includes managerial reporting, review and audit functions.
Integration, Import & Export ‘ 3.5 Stars
Within the program, data moves between modules as needed, with automated calculations that are overrideable if necessary, and single-change functionality: If an edit is made to data that exists elsewhere in the system, it changes in all locations. TaxWorks can import data from QuickBooks and several accounting packages, as well as data in Excel format. Laser Systems also offers free data conversion for users transitioning from several competing tax preparation programs.
Support/Training & Help System ‘ 4 Stars
TaxWorks includes an adequate built-in help system that includes form instructions and line-specific help, as well as right-click menu options for attaching notes to fields or setting tickmarks. The company’s web site support section is vastly improved and now, in addition to offering support contact information, acknowledgement tracking, client return status, program updates and bank reports, also includes new web-based tutorials that provide basic tax preparation assistance for forms 1040 and 1065. As well, users can access an online KnowledgeBase, the TaxWorks Reference Manual, release dates and additional data. The company does not offer either live or online training options.
Product Evolution & Vendor Vision ‘ 4 Stars
TaxWorks has produced tax preparation software for more than 30 years, and has continued to redevelop its software as the computer age redefined the tax preparation industry, according to TaxWorks head of public relations Alan Haacke. The company actively seeks input from its client base through surveys and other methods, enabling continued development of the software.
Relative Value ‘ 4.5 Stars
TaxWorks is moderately priced, yet provides the functionality to process a variety of returns, from simple to complex. The system sports a relatively comfortable interface, along with excellent add-on features that are included with the software, including the fixed asset manager, appointment scheduler, paperless management and office management functions.
2005 Overall Rating: 4
Each of the programs was assessed in the following areas: Learning Curve addresses the ease with which new users are likely to grow comfortable and proficient with the program. This encompasses expected prerequisite knowledge and whether average users will likely need advanced training or support in order to use the program productively. Use/Workflow & Productivity Tools addresses how well a user can move around in the program and perform necessary tasks as a result of the interface, and the way work is handled from the start of a tax engagement (interview) to finish (delivery of return and possible planning for next year). This section notes tools that help professionals keep track of client and tax authority status for returns, as well as additional functions such as integrated calculators and cross-form linking that streamline the entire process.
The Integration/Import & Export section concerns a system’s ability to transfer and work with data within its various modules, as well as whether it supports importing from and exporting to software from other vendors, as well as how the program retrieves existing data from the previous year. A program’s Support/Training & Help System includes how the vendor has incorporated assistance features into its program through components such as its help utility, the quality of its support documentation, and the extent of its online help component, whether it be simple FAQs, online user communities or other more advanced systems.
The Product Evolution & Vendor Vision segment looks at the vendor’s apparent commitment to continued development of its product by looking at the technological culture of the company and its product development history. No professional wants to invest in a preparation package that stagnates or whose vendor goes out of business. Finally, Relative Value offers the reviewer’s subjective assessment of the dollar-value ratio of the software. The most expensive option does not necessarily guarantee the best value, nor is the product with the lowest sticker price always the greater bargain.
The Overall Score will provide an average of the review components, rounded to the nearest half-star. Following the review section, the Executive Summary provides a synopsis of the review and is accompanied by a summary chart with all products and grades. To add more value and insight to our reviews, we invited the various tax preparation vendors to visit our office for a hands-on demonstration of their respective products. Each vendor had an opportunity to demonstrate the functionality of their product and highlight the various aspects they believe sets their product apart from those of their competitors within the specific review sections outlined above.