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Product & Service Guide

2016 Review of Income Tax Planning Systems

If taxes remained the same from year to year, there would be no need for tax planning. But as a professional, you know how valuable tax planning is; for your clients and for your bottom line. For your clients, effective tax management can often ...

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If taxes remained the same from year to year, there would be no need for tax planning. But as a professional, you know how valuable tax planning is; for your clients and for your bottom line. For your clients, effective tax management can often mean a significant reduction in tax liabilities for your clients, as well as the ability to generally plan for an expected liability. For your firm, offering tax planning to your clients opens up a new revenue stream.

For example, there are numerous tax changes expected in 2016 that can significantly change tax liability for your clients, such as the continuing increase in Affordable Care Act taxes, which now stands at $695 per adult or 2.5 percent of income for 2016. Contribution limits on health savings accounts will also rise slightly, as will the estate tax exemption, rising $20,000 to put it at $5.45 million.

This is just a very small sample of the hundreds of federal and state tax laws that can change from year to year. And while IRS tax codes can play a large role in tax liability, life events such as getting married, the birth of a child, buying a home, selling a home, divorce, and death of a spouse can play just as large a role, if not larger in both financial and tax planning for clients.

2016 Reviews of Income Tax Planning Systems

BNA Income Tax Planner

CCH ProSystem fx Planning

Drake Tax Planner

Lacerte Tax Planner

Thomson Reuters Planner CS

It goes without saying that different clients will require different tax planning. While some clients simply need help with retirement plan decisions, or how to maximize deductions, others will require more complex planning services, including the implications of buying and selling stock, home purchasing and selling, and even charitable contributions.

In this issue, we looked at five software products that are designed specifically to assist accountants with tax planning for clients. The programs offer tax planning capability for multiple years, with users able to create custom scenarios based on both current and projected events. While some offer more advanced tools for more complicated tax planning scenarios, they all have the ability to create a tax scenario that can benefit your client. These programs also make it easy to create an additional revenue stream for your firm.

For this review, we looked at five of the most popular tax planning software products which included:

  • Lacerta Tax Planner
  • Bloomberg BNA Tax Planner
  • CCH ProSystem fx Planning
  • Thomson Reuters Planner CS
  • Drake Tax Planner

Designed to work as a stand-alone tax planning product, often these products can be coupled with other applications from the same vendor to create complete tax planning/tax preparation capability in your firm. Many of the products offer free demos, so potential users can easily try out the product prior to purchasing.

While these products cannot predict what tax laws will and will not pass, what they can do is help you provide your client with the information they need to make conscious decisions about their finances, both personally and professionally.

If you’re already using one of these vendor’s products, it may be best to start there, ensuring good integration with other product applications. If you’re not using a vendor’s product, take a look at all of them to determine what best suits you’re the needs of your clients and your firm. Then you’ll be ready to start planning the future for your clients.  

 

 

See inside September 2016

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