Will there be new, low cost tax prep software?

[Bees Knees]

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

Sorry. E-filing a few does not count. I mean go through an entire season e-filing every return. Then the following season, after all W-2 and 1099 info is in your system, where you generally have very little to enter from year to year.

You can’t give an honest critique when you try to do a little of it. Getting into a routine is important for any major change in procedure. Everyone who complained about computers back in the 80’s tried to do a few returns on the computer and the rest by hand. That didn't work. It isn’t until you do it all the time and get comfortable with it before you will see a difference.

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.

One more reason not to use ATX.

I use ProSeries. I’ve had two rejections in the 4 years I’ve been e-filing. One because I entered an EIN wrong. Took 2 minutes to correct. One because of a sister trying to claim a refund for her deceased sister. That one needed to be filed as a paper return. Other than that, everyone one went through without a hitch.

No big deal.

Still looking for someone out there who has gone through an entire season e-filing and decided to go back to paper filing...

Anyone?

[Joe Btfsplk]

E filing them all

If anyone efiled every tax return one year it is unlikely that they would decide not to efile in the future. The reason is not because efiling is all that good, but because anyone who goes whole hog on anything probably won't suddenly decide to do a complete about-face.

If someone became a serial killer for a whole year, is it likely that they will decide not to kill anyone the next year because it is easier to not be a killer?

Why would anyone efile hundreds of returns before they decided they preferred not to efile?
Obviously anyone who filed thirty or forty to give it a try would decide before going on and doing hundreds more.

I tried efiling and found it was more trouble than it was worth, but kept doing it for a while to make sure I gave it a fair chance to prove its worth. I thought there might be something I was missing at first so I efiled about 30 returns before deciding it wasn't worth it. I was then stuck with efiling for some of those clients in future years. Some, I agree, are not a problem--same job, same employer, etc., but others are constantly changing. What if someone changes banks and doesn't tell you?

I don't completely rule out efiling. I even recommend it in a few cases. If someone is getting thousands of dollars refunded, I recommend it as a means of speeding up the refund. But if the same person owes money the next year, I tell them there is no reason to efile.

Your "proof" of the value of efiling is based on false logic if you think someone who efiles 100% of his returns then switches back to paper filing is the only person who could reasonably dedide it wasn't worth it.

[Bees Knees]

I don't completely rule out efiling. I even recommend it in a few cases. If someone is getting thousands of dollars refunded, I recommend it as a means of speeding up the refund. But if the same person owes money the next year, I tell them there is no reason to efile.

Your "proof" of the value of efiling is based on false logic if you think someone who efiles 100% of his returns then switches back to paper filing is the only person who could reasonably dedide it wasn't worth it.

If a client has one W-2, mortgage interest, real estate taxes, and charitable contributions, I can guarantee you I can fill out the return and assemble it using the old NCR carbonless forms faster than you could ever do it on a computer. Is that a reason for me to go back and forth between computer filing and doing it by hand?

The year I switched 100% of my clients to e-filing, everyone’s fee went up $35. Period. No exceptions. Didn’t lose a single client. The few times I have to spend an extra minute or two typing in W-2 data has been compensate for with a permanent fee increase. Even people who owe money like e-filing as they have an acknowledgement the return was accepted on time. You didn’t give it a fair shot, as you tried to walk the fence with one foot on each side.

[Joe Btfsplk]

Apples, oranges and varying priorities

If a client has one W-2, mortgage interest, real estate taxes, and charitable contributions, I can guarantee you I can fill out the return and assemble it using the old NCR carbonless forms faster than you could ever do it on a computer. Is that a reason for me to go back and forth between computer filing and doing it by hand?

The year I switched 100% of my clients to e-filing, everyone’s fee went up $35. Period. No exceptions. Didn’t lose a single client. The few times I have to spend an extra minute or two typing in W-2 data has been compensate for with a permanent fee increase. Even people who owe money like e-filing as they have an acknowledgement the return was accepted on time. You didn’t give it a fair shot, as you tried to walk the fence with one foot on each side.

Your first point is like comparing apples and oranges.

Your second comment makes me wonder why you didn't cut your fee by $ 35 due to the extensive benefit you obtained by efiling.

Obvoiously some people are enamored with efiling and should continue doing so. There is no more reason for those who dislike it to switch to efiling than there are its proponents to discontinue. It is mostly a matter of priorities. You may prefer to save the time it takes to print extra copies and do additional mailing while others prefer to spend less time on input work and updating programs for the latest efiling update.

[OldJack]

Good posts Joe!

Its nice to see an open mind analyzing a controversial subject.

[Bees Knees]

Your second comment makes me wonder why you didn't cut your fee by $ 35 due to the extensive benefit you obtained by efiling.

People who run their own business have always known that the fee you charge a customer is based in part on the services provided. Increase the quality of the service = an increase in the fee you can charge.

That is basic entrepreneurship 101.

Did you lower your fee when you switched from doing returns by hand to computers? You received a benefit by switching to computers. So why didn’t you lower your fee?

[George Boutwell]

You may prefer to save the time it takes to print extra copies and do additional mailing

My printer runs about 20 ppm and the average return runs about ten pages. So by the time I have reviewed and signed the "original", the client copy and my file copy are ready. Half my clients take their returns with them because their returns are completed during their in-office appointment. They may have some additional mailing to do, but I don't.

[sea-tax]

Well I hate to jump in to this thread in the middle of the battle. But what the heck it has never stopped me before.

I am currently an e-filer. I personally completed over 400 personal returns for 2006. I had 2 EIC's and no most of my clients have at least a sch a coupled with a sch d, sch e, or sch c. Not exactly what I would call the " RAL Crowd".

In my three offices looking at the numbers we e-filed approximately 80% of returns for individuals.


Like I think BOB W said it is a matter of efficiency. We use a high end program that allows for easy use for e-filing and accepting acknowledgements. Coupled with the fact that our practice is migrating to a "paperless office" I think that e-filing is a simple jump.

Furthermore being able to recognize a problem instantaneously instead of months if not years later is a major plus. Most of those stupid cp whatever letters seem to always come in the middle to end of tax season.

[George Boutwell]

Furthermore being able to recognize a problem instantaneously instead of months if not years later is a major plus. Most of those stupid cp whatever letters seem to always come in the middle to end of tax season.

What is the connection between CP-2000's and e-filing?

[sea-tax]

What is the connection between CP-2000's and e-filing?

George I never said cp-2000 , I said cp whatever letters.

There is no connection that I am aware of , other than by e-filing you have certain recognition that the taxpayer's name or dependant name is correct or social numebr is correct or if you have a new s-corp and you try to e-file it it will give you a rejection if the 2553 was not filed.
Basically as I see it it is one way to help cut down on those IRS letters for stupid things like name changes and the sort. Also it does provide the tax practioner one more form of checks , or at least my program has some diagnostics about efiling and will not let me e-file returns that have issues.

[GIMoe]

Program

...at least my program has some diagnostics about efiling and will not let me e-file returns that have issues.

If you don't mind my asking, which program do you use?

[sea-tax]

If you don't mind my asking, which program do you use?

Lacerte

[LawrenceGR]

I'll Chime in

I started last year E-filing all 1040's(before I gave folks an option) here in Mich if you reach a certain volume of returns they all have to be E-Filed or the state charges I don't know how much. Most of my clients like it I just bumped my fee to included the cost.

[JON]

Cheap software

Why would anybody want "cheap" software. You get what you pay for, and you should not overpay, but get the one that helps you the most and pass the price on to the customers. (Is that a run on sentence?)

[OldJack]

Why would anybody want "cheap" software. You get what you pay for, and you should not overpay, but get the one that helps you the most and pass the price on to the customers. (Is that a run on sentence?)

Well... I agree for the most part JON, but then it seems like now days to get what you need you pay for a lot of whiz-bang that you don't need or use. Example for me is that ATX-max has always included efile in their price yet I have never efiled. I can't easily switch to TaxAct or TaxSlayerPro since those programs do not offer some forms such as estate tax returns.

I do a low volume 1040 tax work but require most forms that the IRS has to offer as most of my 1040 are large returns such as 15-20 pages. However, most of my tax work comes from business and estate tax classification therefore requiring forms not in the typical cheap software.

So yes... I have to buy more expensive software and pass the cost which makes me twice (or more) expensive than my competition. Therefore, I don't take "cheap" clients and I sell my tax expertise and personal service to justify my fees. The point of this post is that not all tax preparers have the same need for the same type software. Cheap is good if its what you need.