Tax Preparation Software for Professionals

Before computers and software, the only tool available for tax prep was the calculator.
Before computers and software, the only tool available for tax prep was the calculator. (Image: rechner image by eka from

Since the advent of tax preparation software that turned an all-day chore into a 20-minute exercise in typing, CPAs and others have taken advantage of a number of different tax prep software packages. Essentially, all tax preparation software uses the same calculations to arrive at the same figure of taxes owed or refunds received. The variations come more in features and ease of use than they do in one being "better'' than the other.

Tax Prep Software for Franchise Offices

For those tax professionals who have purchased a franchised tax preparation office like Jackson Hewitt, these type of offices have developed their own software for tax preparation. It is part of the franchise agreement that the franchise purchase all its software from the same company.

Jackson Hewitt uses an exclusive software system called Profiler. Similarly, H&R Block has created their own tax preparation software for their offices, and recently purchased the retail tax preparation software company named "Tax Cut" to distribute exclusively H&R Block software. Liberty Tax Service uses a version of the TaxWise software.

These types of software are geared for those preparers with little to no experience. The program guides the preparer through the "interview," which consists of an extensive list of questions to ask the client. As long as the preparer can type accurately, the return will be accurate.

Tax Prep Software for Independents

There are too many software companies producing tax preparation programs to do a detailed analysis of each program. There are, however, several major programs being used by everyone from the independent tax stores to certified public accountants. The independent offices, like the franchised offices, often hire preparers with little experience, and look for programs that are easy to use. They will often choose one of the major programs being sold. We are going to look briefly at each one.

Basic and Easy Packages

Intuit, the makers of TurboTax for Professionals, has been in the financial software business for many years. The Turbo Tax for Professionals is a relatively low-cost software package that is a very basic program. Many of the tax returns prepared in this country are simple W-2s and perhaps a few itemized deductions. The program is very easy to use for the beginning preparer, but doesn't have the features for the more complicated returns.

TaxAct is another low-cost package that is very basic and easy to use. Difficulties begin, however, when more complicated help with returns is needed. The "Help" explanations are poor at best and can lead to confusing even a seasoned professional.

Intermediate Software Packages

Intuit, makers of the Turbo Tax software, also created the Pro-Series line of packages that range from the Pro-Series basic to the Pro-Series Professional line. Pro-Series is extremely easy to use and is easily integrable with Intuit's QuickBooks software for small businesses. The navigation through the program is seamless as you flow from input screens for W-2s to enter amounts directly into the 1040 form.

TaxSlayer Pro is another package that is somewhat easy to use, as easy to use as Pro-Series, with the drawback being in the navigation of the screens. To exit the screen entering information in one part of the return, it is necessary to return to the main screen to choose the next area of entry.

Drake Software is yet another package that is easy to use. The layout of the screen is a bit confusing to some and the navigation is stiff, but in all it is a good option.

Expert Software Package

The industry standard is the one owned by the same company that owns TurboTax and ProSeries. It is called LaCerte. LaCerte is the most thorough of all tax software packages available. It is most popular with CPAs. It is somewhat easy to use, with the caveat that it has a tremendous learning curve. It is not possible to train someone with little experience to use this program. Unlike the cheaper options with Pro-Series and Drake, every conceivable tax situation, from federal to state issues, is covered with this program.

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