turbotax for business - free download

[Zee]

Holy Buckets! Now, they're giving the SW away free for the first year (doesn't include state filing). Intuit wants it all, don't they?

http://www.turbotax.com/lp/ty08/ppc/ttb-learn-more-biz-free.jsp?priorityCode=4516000000

[erchess]

My Clients

wouldn't like it if I used Turbotax to do my own taxes so I will just use the same software I use to do theirs.

[Corduroy Frog]

Tagline says it all

Holy Buckets! Now, they're giving the SW away free for the first year (doesn't include state filing). Intuit wants it all, don't they?

Click on the link provided by Zee and scroll down to where the narrative begins. The very first sentence says it all:

"With TurboTax Business, you don't need to know a thing about business taxes."

No further comments.

[geekgirldany]

That's why I have people call wanting to bring their laptop to my office and show them how to prepare a S-Corp on TurboTax Business.

One fellow yesterday informed me "all you do is punch the numbers in"... I told him there was much more to it than that.

[erchess]

My Experience

I solicited the tax business of the small garage where I was having my car worked on and the receptionist who is also the owner's wife explained that she does their return on Turbotax Business and prints it out and takes it to a tax practice where they ask her questions and look at the books and fix her work for a lot less than they would charge for doing the return. She said the firm was a CPA firm but she doesn't think the person she works with is a CPA. She and her husband are in fact friends with this individual but they appear to be under the impression that what they do could be done by any small business wishing to economize on its tax preparation. I was too slow witted to ask if anyone from the Firm signs as paid preparer.

[erchess]

Thoughts about Tax Software

If I'm not mistaken there are three huge conglomerates that between them are used by about half of the tax offices in the US, especially the ones operated by larger firms. I believe each conglomerate makes more than one software package aimed at us and one aimed at the DIY crowd. Turbotax is made by Intuit, which is one of the three.

Then comes Drake which I believe is used by about half of the rest of us. Drake does not compete with us but it does give a user his or her unique website to use in seeking DIY Business. I'm certainly not saying that everyone should use Drake but this clearly is one point in their favor. On the other hand, there could be a variety of reasons for not liking them including the fact that they are a worksheet based program.

Finally there are at least a dozen or so firms of small market share, and one of these, Red Gear, is owned by HRB which clearly competes with us by operating its own offices and by serving the DIY crowd. Another in this group, Tax Slayer, does make a DIY Product but for what it's worth they will for a fee sell it to you branded with your firm name so that you can sell it to the DIY folks. TS also does not aggressively market their DIY software outside of the area where they have offices that prepare returns for a fee. Also in this group, Crosslink has a program sold to professionals who want to service the DIY crowd. There may be others in this group who do not compete with their customers. Orrtax as far as I know did not compete with us but they were bought out. Again all of the programs have plusses and minuses in terms of cost and how much they do for us and whether they fit our preference for forms based or spreadsheet based software.

What I am saying is that there are at least three software companies that sell to us and do not compete with us and yet the most popular of these appears to come in fourth in the race for our patronage and the other two are back among the also rans. So while we may grouse about competition from our software vendors, we don't appear to give very much weight to our unhappiness when it comes time to renew. I think that if everyone who is using a product made by a company that competes with us looked seriously at the alternatives made by companies that do not compete with us perhaps a good many would decide to change.

[Corduroy Frog]

No They Wouldn't

Erchess, stop and think about your belief that if we boycotted these DIY software companies, they would stop catering to the DIY taxpayers.

As a profession, we are maybe 150,000 tax preparers (don't know how close this estimate is). Reduce that by half for preparers who work on a network (maybe more than half). That is 75,000 and a high-end $1500 product. This means our total market is some $112 million, and we can argue all of the parameters in the calculation if we wish.

I remember a couple years ago when TurboTax announced their product exceeded the 20 million returns level. Assuming they have made zero growth since then, and an average product sale of $40, this puts their gross sales at $800 million. They are serving a market seven times our size, and that would be only TurboTax and not include TaxCut or any of the others. Although TT probably captures over 90% of this market.

These companies are not going to walk away 85% of their software market because the other 15% refuse to buy from them. Of course, that assumes my above calculation assumptions are correct, but even if they are not, could they be that far off?

As I've stated before, we will not prevail by trying to force Intuit and others to shrink their profit. Forget it. I do think there is a possibility that NATP or NAEA, (or some entity dedicated to the tax professional) could develop a software version if they choose to allocate enough resources to do so. They could offer it free with their membership, and raise their membership fee by about $300. Practitioners in the software market would jump at this.

Also, my hats off to Drake. They are not producing competing products, and they have held the line on price increases. They started in an attached structure to their father's house, and have always operated out of Franklin, NC. They are still a family business and will probably continue to resist being swalled up by bigger fish or mega-conglomerates such as Thomson and CCH. If we wanted to migrate to such a company as you suggest, Drake would perhaps be the foremost candidate.

[David1980]

I was curious about the market shares so did a quick google. A survey from the journal of accountancy (so take these numbers with that in consideration) gives the following numbers in a 2007 article.

http://www.journalofaccountancy.com/Issues/2007/Oct/UsersGradeTaxSoftware.htm

ATX 5%
Drake 3%
GoSystem 4%
Intuit Lacerte 26%
Intuit ProSeries 11%
ProSystem fx 30%
TaxACT 1%
TaxWise 1%
TaxWorks 1%
UltraTax 18%

IntelliTax, TaxSlayer, and Tax$imple didn't get enough responses.

Combine the products for the "big 3" and here's what you get.

Intuit 37%
CCH 36%
Thomson 23%
Drake 3%
TaxACT 1%
TaxWorks 1%

So Drake is doing pretty well for not being one of the 3.

As far as not competing with us, sort of. Certainly not like others are doing. But they do basically operate http://www.1040.com/site/ - preparer your federal state & efile for as little as $34.90!

More information on their 1040.com website here: http://www.swiftpage3.com/CampResour...O/BIO/text.pdf (link shamelessly stolen from a marketing email they sent me.) The way they can do this while "not competing" is that the "sites" on 1040.com are simply customers who set it up with Drake. Drake takes 20% of the profits while the "firm" operating the site through Drake gets 80% of the profits. So officially the other Drake customers are competing with you and Drake isn't, but Drake gets 20%.

[Corduroy Frog]

Question these results

David, after reading your posts for some time, I believe you to be a purveyor of truth. However, I would question the article that you referenced.

I base this on some 30 other preparers whom I know personally, and also comments from many board members about the software they use.

I believe the "Journal of Accountancy" article was skewed (not necessarily intentionally) in favor of the very largest and wealthiest entities. For example, I believe ATX has over 50,000 customers if they haven't lost some in the last few years, and this would constitute a whopping percentage, certainly better than what was represented in this article. I know for a fact Drake had over 8,000 customers some 15 years ago.

If I were smart enough to conduct a poll, I would start a new thread and poll with about 10 software companies. I'd be willing to bet the results would be considerably different than what came from this article.

[David1980]

I absolutely agree which is why I included the "so take these numbers with that in consideration". If we look at nothing more than price alone you're going to have more "smaller" tax offices using software like Drake who do not subscribe to magazines like the journal of accountancy. That basically skews the results in favor of people who do subscribe to that kind of thing.

You would hit the same problem if we were to do a poll here. The more knowledgeable, the more "serious" tax preparers are going to be here and the results would show that. The small scale tax shops (for example check cashing stores that also preparer taxes) simply wouldn't get represented.

[Jiggers]

DIY Clients

Clients that DIY using whatever software always end up paying more for me to straighten out their messes.

Love it, all the way to the bank.

I still say the IRS should take a closer look at any return prepared on Turbo Tax and/or marked "Self-prepared". It sure would help the national debt.

[DonPriebe]

I believe the "Journal of Accountancy" article was skewed (not necessarily intentionally) in favor of the very largest and wealthiest entities.

Perhaps the NATP survey may be more representative of smaller firms and solo preparers.
Their latest data shows the top usage as ...

ProSeries 22%
Drake 22%
Lacerte 13%
ATX 11%
UltraTax 8%
TaxWise 7%

[AZ-Tax]

Intuit's hidden fees...

Last year a TurboTax user called and could not figure out why they were not receiving the full depreciation on a business related expense. I was curious on what they paid totally for filing both their Fed and State return and if way was over $200. I could have prepared that tax return for him for about the same price and guaranteed the tax return for accuracy and guaranteed that by amending for free and pay any IRS penalties and/or interest due to any inaccuracy I performed. As we all know, when you DIY, the TP is responsible for any amending, penalties and/or interest. Yes TP's maybe lured into DIY tax software with freebies, low price etc. but so many start the return and immediately are lost and end up at professional tax preparer or use it once only to find out there are so many hidden fees and those fees could top a professional tax preparer fees.

Tax preparation is Rocket Science : )

[joanmcq]

The Journal of Accountancy may be skewed towards larger firms, but all of the really big ones are going to use Profx or one of the other really expensive but really good programs. So that's a lot of preparers.

[erchess]

Cordfrog

You have a very good point about how it is that the software companies would give us up before they gave up the DIY Market. I will admit that I hadn't thought about that.

However, few if any people who avoid using Microsoft Programs because they hate the company believe that they can collectively change its behavior. Yet they still buy Macs or put Linux on their PCs and use programs like Open Office because they feel better about where their money is going.