Will there be new, low cost tax prep software?

[OldJack]

Printing out 2 extra return copies for federal and state, attaching the W-2s, marking where to sign, attaching envelopes takes extra time, extra paper, extra toner, and extra postage for those of us who mail the finished return back to clients.

It appears from the posts on both sides of the efile issue that there really is no time saved by either method of filing. It is just time spent doing different things to finish a tax return. Thus, it appears the only person really benefiting from efiling is the IRS. Maybe efiling will free up the IRS to give them more time to audit efilers?

edit: did I hear recently some statistic that the IRS was losing millions to efile fraud as it was so easy to submit a fake return for EIC refunds? or something like that.

[Joe Btfsplk]

Efiling fraud

The EIC/RAL crowd is the engine driving the promotion of efiling.

Some tax preparers like it because it makes sure the return doesn't get lost in the mail and IT SAVES PAPER.

[George Boutwell]

Vast Reduction?

E-file is the standard, and has been for several years. Obviously the IRS has changed to accommodate that, vastly reducing the routine data entry function.

Certainly, e-file is the standard. All of my returns are e-filed. It's just that I put the numbers on paper and let IRS do the data entry, then send it to their computer.

I'm not sure what you mean by "vastly reducing the routine data entry function." IRS has fewer GS-2's working in the mail room and the keypunch branch? Yes, that's true. (Incidentally, many of the posts here indicate that some practitioners have no idea what happens to a paper return when it is processed at an IRS factory.) But they still keypunch the same amount of data, which happens to be much less than what they require e-filers to transmit.

[OldJack]

George you gave me my "chuckle" for the day. Thanks.

[Bees Knees]

There are two types of clients: Those who can't wait another couple weeks for a state refund that resulted, usually, from their compulsion to use the system as a bank account paying no interest; and, all the rest. You can have the first group, I'll take the second.

I had the same argument with my boss back in 1988 on whether it was better to do tax returns by hand verses using a computer.

We should save this thread and look at it 10 years from now and see if you still feel the same way.

[Bees Knees]

I have an idea.

Anyone out there switch to e-filing, did an entire season e-filing every return, then decide paper filing was still better?

If not, those who have never tried it sound no different than the old timers back in the 80’s who thought computers were a waste of time.

[BOB W]

Three years ago I forced all clients to E-File or go elsewhere. Some didn't like it, but they all loved it the following year.

I was so happy to get rid of the packaging portion of completing tax returns. I was able to eliminate that task off of my helper. I print the client copy of the return, staple the full sheet of the W-2(s) to the back and put it in the mail. Packaging> Soup to nuts> 2 minutes.

Once a client is set up for E-File, each year after is just a quick review for any changes. Initial learning curve is minimal but I can appreciate a first time users reluctance. What I have found> is that more functions are placed on the preparer just to get the tax return done. Maybe 3-4 minutes on the initial client set up. After that I found that I did not need any employee help because I was totally done when the client left the building.

[George Boutwell]

If not, those who have never tried it sound no different than the old timers back in the 80’s who thought computers were a waste of time.

I'm one of the old-timers who tried to sign up the first year, back in the 80s, but got the message that IRS did not want sole practitioners and intended to exclude them by requiring bidirectional modems, which at the time were already obsolete but cost as much as professional software costs now. I did not have the ethical constraints then, that I have now, regarding random inspection of client files by gun-toting gonzos. I do have office help now, with enough spare time between answering phones, scheduling appointments and otherwise dealing with clients to take care of all the assembly, copying and packaging that some e-filers seem to dread.

[OldJack]

If not, those who have never tried it sound no different than the old timers back in the 80’s who thought computers were a waste of time.

I had a PC using CPM operating system back in the early 80's before IBM introduced their 1st PC or the DOS operating system. So I would say I was ahead of the times then and I consider myself still ahead now, but that doesn't make me want to assume responsibility and liability for filing my clients tax returns.

[Bees Knees]

I'm one of the old-timers who tried to sign up the first year, back in the 80s, but got the message that IRS did not want sole practitioners and intended to exclude them by requiring bidirectional modems, which at the time were already obsolete but cost as much as professional software costs now. I did not have the ethical constraints then, that I have now, regarding random inspection of client files by gun-toting gonzos. I do have office help now, with enough spare time between answering phones, scheduling appointments and otherwise dealing with clients to take care of all the assembly, copying and packaging that some e-filers seem to dread.

No comparison to how it works today. That’s like saying I don’t like computers because I don’t want to learn DOS commands.

I had a PC using CPM operating system back in the early 80's before IBM introduced their 1st PC or the DOS operating system. So I would say I was ahead of the times then and I consider myself still ahead now, but that doesn't make me want to assume responsibility and liability for filing my clients tax returns.

Some where along the way you stopped being ahead of the times.

Sorry OldJack. But I only hear complaints from those who haven’t tried it yet.

Why don’t you give it a try next tax season. Then we can debate the merits and see which is better.

[OldJack]

>>Some where along the way you stopped being ahead of the times.

Sorry OldJack. But I only hear complaints from those who haven’t tried it yet.

Why don’t you give it a try next tax season. Then we can debate the merits and see which is better.<<

As usual you have your head stuck somewhere instead of looking at what I have posted. I have never complained about efiling and have only stated my reasons for not doing it which includes the fact that I don't have clients that are interested in RAL's or immediate refunds. I don't have now and would not accept such undesirable clients.

Now that all the software companies appear to be charging for efiling, I would be an idiot to sign up for costs of something my client's aren't interested in and I don't have to provide. In spite of what you think you are not saving anything by efiling.

[BOB W]

[QUOTE= I do have office help now, with enough spare time between answering phones, scheduling appointments and otherwise dealing with clients to take care of all the assembly, copying and packaging that some e-filers seem to dread.[/QUOTE]

It is nice to have an office staff for "show" purposes, makes the office seem busy and yes it takes some of the pressure off for small followup tasks. Because of efiling and other intergrated programs I control 99% of the activity at my desk and I only need 1/2 of an employee to do write-ups. This year I grossed $225,000 on 450 personals and 75 entity write-ups with tax returns> Me and 1/2 of an employee. And if I wanted to do more, I could do 35 more writeups and 100 more personal tax returns with the same number of employees.

At this point I spend about $9,000 a year for all accounting and tax programs. What is 9K in relation to 225,000> Nothing>>>>>>>>>>>>>>>

So when I hear people talking about the cost of tax programs it makes me think that they are spending bookoo $ on staff that a good program and intregration of programs could reduce overall expenses by $30,000 a year. Efficency of operation is the name of the game.

E-File is just one part of the overall picture> no packaging required> thus> no one needed to package.

[erchess]

What's this about printing and signing 8453s?

I do Pins and they are usually accepted. If I have to do an 8453 occasionally it's no biggie.

[Joe Btfsplk]

>>Some where along the way you stopped being ahead of the times.

Sorry OldJack. But I only hear complaints from those who haven’t tried it yet.

.

I've tried efiling and I have complaints. I efile a few, but mostly paper file since I find efiling 1040s takes more time with input work. I have no objection to use of electronic means when it is more efficient. For example, efiling 1099s is a lot more efficient for me. Efiling W-2s is also my preferred way and efiling extension requests. All of these require almost no extra information than paper filing. But efiling for people who have changing W-2s and 1099s every year require adding and deleting a lot of garbage that paper filing doesn't require.

I see no reason to efile 941s, 1120s, 1065s etc. I don't do that many of these, but I see constant questions on message boards about these and problems related therto.

If you ever read the ATX message board you would see hundreds of posts entitled, "Where's my ACK?"

If a return gets rejected you have to spend an inordinate amount of time deciphering the error code to see what is wrong. It seldom has anything to do with the data that would go on a paper-filed return which you sometimes have to send in order to get the return accepted.

As far as I can see, efiling should be used sparingly and only in cases with no complicating factors or information that may change significantly from year-to-year.

It's not all bad, but it is certainly not always the best way to file.

[sdiazea]

Renewing Early

>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 .. .

I used to think it was prudent to always take the early bird discount however, I now think it is prudent to hold onto my money until I have to spend it. I always buy ATX MAX and the discount only amounts to $100 so why should I put out $1,000 over six months early. A 30% or more early bird discount might be a little more attractive, but probably not. I think 9/11 changed my way of thinking. If I have to leave I'd rather my family get my money than leave it with a tax software company.