The strategy for planners in 2013 should therefore be based on four basic principles:
• Tax preparers should be versed in tax planning or have a relationship with a planner to whom they can refer clients who need the service.
• Software updates will be critical throughout the year, but particularly during tax season when clients are focused on their tax needs. Missing an update can create a costly error.
• Consider moving to a cloud-based (SaaS) planning product if software updates or anytime/anywhere access to planning tools are issues in the practice.
• Planning tools must integrate tightly with the tax preparation tools used. Data-entry errors remain one of the greatest threats to effective planning, and the use of planning tools that transfer data without manual intervention will increase both efficiency and timeliness of the tax plan.
For 2012, we review six of the leading tax planning products in the accounting marketplace. While each has its own methodologies and feature sets, all of them are software products with an established history of performance and a loyal cadre of users.
BNA Income Tax Planner
Bloomberg BNA
Arlington, Va.
(800) 424-2938, select option 3
http://www.bnasoftware.com
Price: Base federal system starts at about $600.
BNA Income Tax Planner
In late 2011, Bloomberg acquired BNA including BNA Software. In terms of the BNA Income Tax Planner, the most significant recent change was the addition of a SaaS version in April 2012. BNA Income Tax Planner Web offers all of the functionality of the CD edition with the convenience and security of a web-based edition.
The BNA Income Tax Planner enables the quick calculation of federal income taxes, including alternative minimum tax (AMT), capital gains, estimated tax payments and stock options. Offered in two versions -- a federal-only edition and a federal plus 50-states edition - data bridges are also available to allow integration with ProSystem fx Tax, Lacerte Tax, UltraTax CS and GoSystem Tax. It allows up to 20 side-by-side columns of federal and state tax data for multiple years and/or scenarios, with modes of analysis (years within cases, cases within years, adjustment, difference, taxpayer-spouse, annualization and minor child). The current versions handle all tax years after 1986, and allow the tax practitioner to sunset the 2001 Act provisions.
Presented in a worksheet format, the BNA Income Tax Planner offers a Security Transaction Analyzer, which automatically determines the type and amount of gain or loss for each capital transaction; and a Watch Window to permit the viewing of any 10 rows to automatically see the impact of data changes. Also included are a Notes feature to create and optionally print notes for any input row on any worksheet; a client letter generator with amounts linked into the letter from the worksheets; and a Graph feature to prepare customizable graphs of client data.
BNA Income Tax Planner is a powerful and flexible planning tool that allows tax preparers to accurately and efficiently show clients what their tax situation looks like, with in-depth analysis and comparison of multiple, side-by-side scenarios for federal, all resident states, NYC, DC, and over 30 nonresident states.
Drake Tax Planner
Drake Software
Franklin, N.C.
(800) 890-9500
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.drakesoftware/site/products/taxplanner.asp
Price: $1,495; Pay-per-return option for firms processing fewer than 85 returns.
Drake Tax Planner
The Drake Tax Planner is part of the family of tax preparation software and services from Drake Software, which encompasses tax preparation for all entities, plus tax planning, document management features, write-up, payroll with ATF payroll, a multi-office manager sync system and a free basic website for accounting firms.
The Tax Planner provides multi-year scenario testing with built-in rules for AMT, taxation limitations and other factors. Using Drake's data-entry screens for input, the Tax Planner allows users to set up an unlimited number of scenarios showing how changes in marital status, number of dependents, education costs, retirement savings and income may affect a client's tax situation. It provides comparisons to the original return of up to three scenarios at a time. These scenario comparisons, and other toolbars and menus in the program, offer the same feel and navigation as Drake's tax software.
Using Drake's data-entry screens for input, the Tax Planner allows users to set up an unlimited number of scenarios showing how changes in such things as marital status, number of dependents, education costs, retirement savings, taxable Social Security benefits, disposition of capital assets, limitation phase-outs, self-employment tax, Alternative Minimum Tax and income may affect a client's tax situation.
Intuit Lacerte Tax Planner
Intuit
Plano, Texas
(888) 236-9501
lacerte.intuit.com/products/tax/tax-planner/
Price: Productivity bundle, $249.
Intuit Lacerte Tax Planner
The Intuit Lacerte Tax Planner enables firms to create customized tax-minimizing strategies using multiple year tax scenarios based on both current and inflation-adjusted future income. It can be used either as a stand-alone planner or installed with the Lacerte Tax preparation suite, and uses the same general interface with a summary screen and tabbed access to client data-entry screens.
The planner presents client data scenarios based on actual current and future state and federal tax rates built into Tax Planner. Client data can be imported directly from the Lacerte Tax for individuals. Tax Planner generates any of four types of tax plans: a year/case analysis, difference analysis, Married Filing Jointly/Married Filing Separately comparison and adjustment analysis. And for each client, up to 10 scenarios may be created for up to 10 years each, calculating changes in AMT, alternative capital gains, phase-outs, farm income averaging, self-employment and lump-sum taxes, and contribution limits.
A report generator produces a variety of standard and custom reports, with graphs and other features. The reports can be exported in a variety of formats, including PDF and text. Lacerte Tax offers the Tax Planner as part of a bundle that includes the Tax Planner, the Lacerte Tax Analyzer and the Lacerte Document Management System.
Planner CS
Thomson Reuters
Dexter, Mich.
800.968.8900
This email address is being protected from spambots. You need JavaScript enabled to view it.
CS.ThomsonReuters.com
Price: $685, federal module; $185, one state module. All-state option, $310.
Planner CS
Planner CS analyzes prior years calculations all the way back to 1999, or back as far as 2006 for the first year of a new plan, including a new feature/option which allows a user to force the extension of the Bush Tax Cuts on a year by year basis. The implementation does NOT force global extension to the entire plan, but is managed via a check-box on the bottom row of the summary tab. It also allows a user to create two alternatives in the same plan and elect for extension of the cuts in one alternative while allowing their expiration in the other.
Designed for advanced client tax and retirement planning, Planner CS allows the creation of tax projections for federal tax and for any of the 45 states that have an individual income tax. It also handles clients with income from multiple states, allowing attachment of one resident and unlimited non-resident states. Included are a 1040-ES estimated tax payments calculator and Form W-4 calculator for employee withholding. Its letter generation capability provides an easy way to create client letters that incorporate plan data.
Evaluation of the tax consequences of the Roth conversion have been expanded to include high-income taxpayers beginning in 2010, and Planner CS presents an election to spread the conversion income from a Roth over the 2011-2012 tax years.
A powerful and economical platform designed to integrate with the Thomson Reuters UltraTax CS or GoSystem Tax RS lines, the application also functions as a stand-alone planner , although it does not import from or export to third-party system except for the CheckPoint tax research platform.
CCH ProSystem fx Planning
CCH
Riverwoods, Ill.
(800) 739-9998
www.CCHGroup.com
Price: $675, single user or network.
CCH ProSystem fx Planning
CCH ProSystem fx Planning, while tightly integrated with CCH ProSystem fx Tax, works equally well as a stand-alone application. It features a spreadsheet-style interface, the ability to craft up to 30 scenarios per plan for up to ten years, and presentation of the plans through standard reports or export to the ProSystem fx Engagement folder.
ProSystem fx Planning manages complete federal tax calculations, including income tax, Alternative Minimum Tax, capital gains taxes, underpayment of estimated tax penalties, tax on lump-sum distributions, tax on premature distributions from IRAs or other retirement plans, and farm income averaging tax. The system calculated the deductibility of IRA, SIMPLE, SEP and KEOGH contributions, phase-out calculations for itemized deductions, personal exemptions, and AMT exemption for high-income taxpayers.
It offers integrated state tax computations, including calculation of CA, NY and generic AGI state tax based on pre-configured or user-defined data. Pre-configured states for taxes, deductions, exemptions and credits are included for AL, AZ, CO. CT, GA, ID, IL, IN, KS, LA, MD, ME, MI, MN, MS, MO, NE, NJ, NM, NC, OH, OR, SC, UT and WV.
ProSystem fx Planning has seen upgrades for 2012 that include an expansion of the number of plan years from four years (prior, current and two forward) to 10 years (prior, current, and eight forward). And a new navigation bar makes it easier for users to quickly navigate to a specific input grid or worksheet.
TaxWorks Tax Planner
Redgear Technologies
Kaysville, Utah
(800) 230-2322
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.taxworks.com
Price: $400 as a stand-alone unit. Tax software including all states, the primary entities (1040, 1041, 1065, 1120, 1120S), the tax planner and unlimited e-filing, $2,995. Per-return is also available.
TaxWorks Tax Planner
The TaxWorks Tax Planner, re-designed for 2012, built on the .NET and Silverlight platforms, still operates in the same way, retaining its signature, five panel Return Screen --the Forms, Input, Output , Diagnostics and Summary panes.
The new technology provides the ability to open multiple year returns and clients without closing any returns. Simple clicks navigate back and forth between returns. The program itself is a basic planning system, providing up to five years of scenarios with automatic adjustment of multiple-year inflation calculations in a spreadsheet format. Each year, data such as income, deductions and filing status will import, or copy and paste. The program will automatically provide tax projections, calculations and other data. The system also provides adjusted future standard deductions, exemptions and other information, adjusted for inflation.
The data can be copied and pasted into Word documents, or saved in a PDF format. Export via the clipboard, however, provides for excellent presentations via Excel or Word.
