Today's Technology for Tomorrow's Firm.
Issue link: https://cpapracticeadvisor.epubxp.com/i/399112
TAX PLANNING SYSTEMS Reviews REVIEW SECTIONS BASIC SYSTEM FUNCTIONS • General navigation/ease-of-use • Multiple concurrent users • Multi-client management/setup • System customization CORE TAX PLANNING FEATURES • Years of projections/planning/ prior year • Scenario comparisons • Special: MFS-MFJ, Estimates, Lump Sum, AMT, ACG • State planning support (resident & non-resident) REPORTING • Customizable reporting • Client-ready communication/ reporting • Report output options • Portal/DMS/email integration IMPORT/EXPORT/ INTEGRATION • Data import capabilities • Integration w/tax applications • Tax law research options • Export to common fle formats HELP/SUPPORT • Built-in support features • OS compatibility • Support website/documentation • Live Support Bill Kennedy, CPA, CA is founder of Energized Accounting , an accounting and consultancy group focused on helping small businesses. By Bill Kennedy, CPA, CA T he Affordable Care Act changes had the biggest impact on tax software across the country this year, as developers scrambled to incor porate the new Net Investment regulations into their packages, par- ticularly for high net worth individ- uals. All of the packages reviewed have been updated for the impact of this legislation. If you v iew ta x software as the system that deter mines w hat an individual or corporation owes in income tax now, then tax planning sofware is the tool professionals use to help their clients minimize the future impact of income ta x . Ta x planning systems tend to be add-ons to an existing tax sofware package and are typically available for pur- chase, although the Drake system comes free as part of their compre- hensive package. With the exception of the changes resulting from the Affordable Care Act, this was a routine year for tax planning systems. Tis year's reviews include: • CCH ProSystem fx Planning • Drake Sofware Tax Planner • Tomson Reuters Planner CS • Bloomberg BNA Income Tax Planner • Intuit Lacerte Tax Planner However, there is one area that this reviewer believes developers should pay atention to and that is the number of users who now routinely have two screen on their desk, as they transfer information from one package to another. Optimizing fnancial packages for single or multi-screen use would be a good general innovation. While today's professional tax plan- ning systems can't tell you what future tax law is going to be, tax accountants can extract useful information from them for developing tax strategies. With the help of these sophisticated sofware packages, accountants can project tax liabilities several years into the future under multiple scenarios. Each scenario may contain var y ing amounts of income, deduct ions, car r yover s, dependents, exemptions, credits and other quantifiable details from tax returns. Accountants can adjust each scenario for anticipated tax law changes, such as standard deduction and exemp- tion amounts, expiration of tax credits, and various tax rates and brackets. These tax planning systems can generate reports helping taxpayers weigh the impact of earning additional income or making additional deduc- tions. For example, conversions of tra- ditional IRs to Roth IRs have been a popular tax planning strategy since the limits based on modifed adjusted gross income and taxpayer fling status were removed for conversions made after December 31, 2009. With the help of the sofware, accountants can produce professional-looking reports, assisting clients to make an informed decision between converting to a Roth IR in the current year or in subsequent years. Most importantly, tax planning sof- ware empowers accountants to perform value-adding activities like analyzing clients' future tax positions and reducing tax liabilities. Where traditional compli- ance services may be viewed as over- head, efective tax planning can turn tax accountants into superheros in the eyes of their clients. ● READ THE FULL VERSION OF THESE REVIEWS ONLINE AT WWW.CPAPRACTICEADVISOR.COM/ 12004251 20 October 2014 • www.CPAPracticeAdvisor.com