Late last year, 2nd Story Software, the makers of TaxAct, announced that they had entered into an agreement to sell the company to H&R Block.
But that may not happen. The US Department of Justice has filed an antitrust lawsuit to stop the acquisition.
TaxAct, I believe, has long been number 3 in the DIY market, with TurboTax holding the number 1 spot, and the HRB product holding the number 2 spot. The implications are obvious. While TaxAct's market share has been relatively small, I'm sure HRB would love to have it. And DOJ apparently doesn't like the idea of reducing the playing field down to just two major competitors.
What some on this board may not know is that TaxAct offers very good professional tax software, at a very attractive price. My office has been using it for years. It doesn't have lots of bells and whistles, and it certainly has some limitations. Most striking: No Form 1040NR and no Form 1041. Their software does partnerships, C corps, and S corps, but not trusts. Or any other business entity, for that matter. So if you have something really esoteric, like a homeowner's association, you're out of luck. But it's great software for a small practice with only a few tax pros, where most of the work is 1040 returns. And it's sold in modules, so if you really want to use a different program for business returns, you can. The basic 1040 program, for the last few years, has been only $120, and the all-states package has been $80. The state software supports city tax returns in some places, but not in others, such as the mess we have in Ohio.
The program allows unlimited paper returns. E-file pricing is per return, or unlimited for the entire year. All pretty reasonable for a small practice.
What is most interesting, and what may keep the price so low, is that believe it or not, the professional version of TaxAct is identical to the consumer version of the program, with one exception: In the professional version, you can enter your PTIN and EFIN. (And the professional version supports a RAC-type bank product.)
So we as tax pros go through exactly the same interview, or Q & A, that a DIY user would, unless the tax pro chooses to enter data directly into the forms. And of course, there are a few important differences at the end, for the ERO and tax pro. But otherwise there is literally no difference between the professional product and the high-end "deluxe" DIY product.
And we have been very satisfied with it.
Based on the DOJ press release, it appears that they are primarily concerned about the impact that the HRB acquisition would have on competition in the DIY market.
I have to wonder what will happen to the professional product if the acquisition is allowed to proceed. HRB has never developed a professional program for sale to independent tax professionals. They certainly develop their own software for use in their retail offices. But that product isn't released outside of HRB. And for business returns, historically, HRB was using ATX in their "premium" offices. More recently, HRB acquired TaxWorks, so I think they began using that program for business returns.
In other words, until the acquisition of TaxWorks, HRB never offered tax software to tax professionals. Now they do. Not by developing a new product, but rather by gobbling up small fish in that pond. I suppose they see this as a way to expand their overall market penetration...
BMK
But that may not happen. The US Department of Justice has filed an antitrust lawsuit to stop the acquisition.
TaxAct, I believe, has long been number 3 in the DIY market, with TurboTax holding the number 1 spot, and the HRB product holding the number 2 spot. The implications are obvious. While TaxAct's market share has been relatively small, I'm sure HRB would love to have it. And DOJ apparently doesn't like the idea of reducing the playing field down to just two major competitors.
What some on this board may not know is that TaxAct offers very good professional tax software, at a very attractive price. My office has been using it for years. It doesn't have lots of bells and whistles, and it certainly has some limitations. Most striking: No Form 1040NR and no Form 1041. Their software does partnerships, C corps, and S corps, but not trusts. Or any other business entity, for that matter. So if you have something really esoteric, like a homeowner's association, you're out of luck. But it's great software for a small practice with only a few tax pros, where most of the work is 1040 returns. And it's sold in modules, so if you really want to use a different program for business returns, you can. The basic 1040 program, for the last few years, has been only $120, and the all-states package has been $80. The state software supports city tax returns in some places, but not in others, such as the mess we have in Ohio.
The program allows unlimited paper returns. E-file pricing is per return, or unlimited for the entire year. All pretty reasonable for a small practice.
What is most interesting, and what may keep the price so low, is that believe it or not, the professional version of TaxAct is identical to the consumer version of the program, with one exception: In the professional version, you can enter your PTIN and EFIN. (And the professional version supports a RAC-type bank product.)
So we as tax pros go through exactly the same interview, or Q & A, that a DIY user would, unless the tax pro chooses to enter data directly into the forms. And of course, there are a few important differences at the end, for the ERO and tax pro. But otherwise there is literally no difference between the professional product and the high-end "deluxe" DIY product.
And we have been very satisfied with it.
Based on the DOJ press release, it appears that they are primarily concerned about the impact that the HRB acquisition would have on competition in the DIY market.
I have to wonder what will happen to the professional product if the acquisition is allowed to proceed. HRB has never developed a professional program for sale to independent tax professionals. They certainly develop their own software for use in their retail offices. But that product isn't released outside of HRB. And for business returns, historically, HRB was using ATX in their "premium" offices. More recently, HRB acquired TaxWorks, so I think they began using that program for business returns.
In other words, until the acquisition of TaxWorks, HRB never offered tax software to tax professionals. Now they do. Not by developing a new product, but rather by gobbling up small fish in that pond. I suppose they see this as a way to expand their overall market penetration...
BMK
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