Will there be new, low cost tax prep software?

[George Boutwell]

Biggest Advantage to E-Filing

.... is that you can shove a form in front of your client's nose, tell him to sign it, and send him on his way.

I know that many taxpayers aren't going to review their returns, or understand what they find on them anyway. But if the medical profession requires "informed consent," at least giving the patient a chance to ask questions and give some thought to the proposed treatment, I can't understand why tax practitioners don't share that philosophy.

[Joe Btfsplk]

I'm a middle-of-the-roader on efiling

I prefer NOT to efile, but if a client has a large refund, I will efile it.
I can't understand how a more complicated return is easier to efile. The biggest advantage of efilng is that you save a few cents on paper (big deal).

A return can be completely error-free, but ,in order to efile, there are several additional things that must be entered, all of which can create an error which only affects the ability to efile it.

Another pain in the neck (or other part of the anatomy)-- if you use ATX-- is that even if you updated your program and all the forms yesterday, if you efile today, and don't update, the return will not efile. It will transmit, then you have to update and resubmit.

At least the Form 8453 is seldom necessary anymore. Someday the IRS may actually provide a way to make efiling more attractive to tax preparers. I realize that many already seem to like it for some reason. (saving paper, additional error checks, verification of SSNs--but RALs are the big driving force)

[Gene V]

Personally, I have refused to e-file tax returns as filing client tax returns is not my responsibility and my clients are not the type that care or request e-filing anyway.

Personally, I wouldn’t send in a paper return, I been e-filing the very first year it started,
In fact, I was one of two firms in Oregon to test there e-filing when they started.
I think e-filing is the only way to file, especially when you have a complicated return.
Just my opinion, not looking for a debate on e-filing.

[OldJack]

Seems to me that most complaints about the price of ATX software next year is the cost of e-filing. Why not just file paper returns next year?

Personally, I have refused to e-file tax returns as filing client tax returns is not my responsibility and my clients are not the type that care or request e-filing anyway.

[HBurkholder]

off the wall

This is completely off the wall, but why don't we do something proactive instead of whining and moaning about "where to from here". I know probably different laws apply to this type business, but I come from a farm background. In the farming industry we buy inputs and sell product through co-ops. Sure, those beginning the venture need to invest money upfront, but once the co-op is up and running the control and profits are in the hands of the members. Raising the money may seem prohibitive but I do not think that is necessarily true. It seems the dissatisfaction centers around ATX (I am also an ATX user). I believe I remember seeing that ATX has 30,000 users. If each of these users would put up $500.00 we would have $15,000,000 to work with. Perhaps that would be incentive for one of the smaller companies to consider talking with a co-op group. These folks could then be hired back as managers and programmers.

[George Boutwell]

ATX Discount Expires June 30

>These software companies want your renewal before May 1. <

But ATX is offering the 10% discount through June 30. So I have to figure out whether that's a better use of my money, than buying puts on Intuit .. .

[Chief]

NATP Survey of

Software, I believe is due out soon. Annually their members have a survey of software that really is an evaluation of tax software. This evaluation tool has proved to be quite valuable. I believe it came out last May. However, I had heard nothing yet about filling out an evaluation survey this year. I think that would prove helpful.

NATP would do well to speed up this process. These software companies want your renewal before May 1. They say their early bird expires then. I renewed my software before the tax season was over for this year.

[George Boutwell]

Generic products such as catsup and gasoline, however, have very elastic demand triggers

Right. I have already switched to mayonnaise for my hot dogs, and Pepsi for my SUV.

[jainen]

nothing at all

>>Anyone contemplating a change has to rely on the 'slick advertising' if all they have to go on is the claims of the software providers<<

You can call any publisher, or all of them, this morning and get the 2006 software for free. Then you can spend the rest of the year trying it out, including efile, tech support, compatibility with your printer -- the whole works. Would you prefer the casual anecdotes of unknown users whose practice is nothing at all like your own?

[Joe Btfsplk]

But it is quite strange that I started a thread a couple days ago for the purpose of evaluating software packages, and instead of evaluations, the responses were geared to sell-outs and buy-outs.

Too bad there was not more comments evaluating software. Anyone contemplating a change has to rely on the 'slick advertising' if all they have to go on is the claims of the software providers.

I think the consolidation will continue unless there is foreign competition. Look at what happened to the "Big Eight" accounting firms and the "Big Three" Automobile companies.

[Snaggletooth]

Economics

Arguments abound and can be fashioned against my plea for resistance of the corporate sucking-up of available software.

Lest anything be misunderstood, I have never supported the idea of general "deflation" of software prices. I could well be wrong about new software, but not stupid enough to expect all software companies to freeze their prices forever. My fees have doubled in the last ten years, and I don't expect general prices to behave any differently.

My issues are whether we should organize a reaction to the takeover of our industry by large institutions, and the substitution of big money, slick advertising, and corporate conniving to replace innovation and enterprenuel logistics.

All of the posts on this thread are well-thought-out and are borne of relevant and provocative thought. Thanks to all who have posted.

But it is quite strange that I started a thread a couple days ago for the purpose of evaluating software packages, and instead of evaluations, the responses were geared to sell-outs and buy-outs.

[erchess]

what info

goes to the IRS when people efile but not when they file on paper? I sometimes put into my computer a lot more detailed information such as all the charitable gifts a client made. It was my understanding that this sort of information stayed on my computer.

[DonPriebe]

What you don't see is what they get.

One of my many objections to e-file is that you can't tell what was submitted to the IRS (or states). Is it just the data on the forms themselves? Or do all the entries on all the worksheets get transmitted as well?

It wasn't that long ago that you could see what was being sent. I used to debug e-file problems by looking at the *.irs file, which was written in clear ASCII by PencilPushers and (DOS) OrrTax. And as recently as tax year 2002 you could still read it in ATX. But now the government has once again saved us from ourselves and everything is encrypted ...

Of course you can always wade thru Pub 1346 which defines the formats for the data to be transmitted. This helps when people ask (e.g.) if they have to enter the name and address on a 1099-DIV. If there is no format defined, then the data is not sent!

[Roland Slugg]

And the sequel, Economics 102

I don't see price increases as the inevitable result of consolidation into three or four players.

Nor do I in all industries and with all products. It depends in large part on the elasticity of demand vis-a-vis changes in price. My guess is that tax prep software has a very inelastic demand, and that small or modest incremental price increases will not result in enough customer losses to cause a net reduction in revenue. This is because tax software is a big job to switch, and the cost of doing so in terms of time, hassle, and the new learning curve will take most consumers many years to recover when compared to the differential cost savings. CCH paid a huge ... and I mean HUGE ... premium for ATX, and I'm sure its management is betting that relatively few will make a switch, despite the initial flurry of complaints and threats. $5 or $6 for e-filing a return compared to the previous $0 doesn't sound too bad, until you multiply it by the number of returns done altogether.

What has happened with Quicken and Money? Consumer accounting software is dominated by those two players, and Microsoft's price cutting hasn't put a dent in Intuit's better product.

Case in point! Generic products such as catsup and gasoline, however, have very elastic demand triggers, so the companies that sell them try to offset this with advertising, nice labeling, and clever ploys like changing the spelling to "ketchup." It's perception, not true product enhancements, and it is effective to some degree.

Besides, if the government isn't paying for it, it can ask for much more data.

Very true. One of my many objections to e-file is that you can't tell what was submitted to the IRS (or states). Is it just the data on the forms themselves? Or do all the entries on all the worksheets get transmitted as well?

[jainen]

I just wouldn't

>>what has happened with Quicken and Money?<<

That's a fine counter-argument, George, though I wouldn't call it 101. It can't be denied that so far the consolidation of tax software has produced vastly better products at only a modest price increase. I pay for my unlimited Proseries/e-file with a half dozen returns. The near future looks like more of the same as fabulous research capabilities are integrated.

Few of us would be able to work independently if it weren't for powerful software. More power means more independence to me, and that will surely come from the economies of scale as the company writes for a larger user-group.

For example, my practice is mostly 1040s, but this year I am expanding to small corporations, trusts, and estates. I would not attempt that without Intuit software--I just wouldn't.