Today's Technology for Tomorrow's Firm.
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12 September 2016 • www.CPAPracticeAdvisor.com INCOME TAX PLANNING SYSTEMS Reviews Income Tax Planning Systems By Mary Girsch-Bock I f taxes remained the same from year to year, there would be no need for tax planning. But as a professional, you know how valuable tax planning is; for your clients and for your boom line. For your clients, effective tax management can oen mean a significant reduction in tax liabilities for your clients, as well as the ability to generally plan for an expected liability. For your firm, offering tax planning to your clients opens up a new revenue st ream. For example, there are numerous tax changes expected in 2016 that can significantly change tax liability for your clients, such as the continuing increase in Affordable Care Act taxes, which now stands at $695 per adult or 2.5 percent of income for 2016. Contribu- tion limits on health savings accounts will also rise slightly, as will the estate tax exemption, rising $20,000 to put it at $5.45 million. is is just a very small sample of the myriad federal and state tax laws that can change from year to year. And while tax laws can play a large role in tax liability, life events such as geing married, the birth of a child, buying a home, selling a home, divorce, and death of a spouse can play just as large a role, if not larger in both financial and tax planning for clients. It goes without saying that different clients will require different tax planning. W hile some clients simply need help with retirement plan decisions, or how to maximize deductions, others will require more complex planning services, including the implications of buying and selling stock, home purchasing and sell- ing, and even charitable contributions. In this issue, we looked at five soware products that are designed specifically to assist accountants with tax planning for clients. e programs offer tax planning capability for multiple years, with users able to create custom scenarios based on both current and projected events. While some offer more advanced tools for more complicated tax planning scenarios, they all have the ability to create a tax scenario that can benefit your client. ese programs also make it easy to create an additional revenue stream for your firm. For this review, we looked at five of the most popular tax planning soware products which include: • Lacerte Tax Planner • Bloomberg BNA Tax Planner • CCH ProSystem fx Planning • omson Reuters Planner CS • Drake Tax Planner Designed to work as a stand-alone tax planning product, oen these products can be coupled with other applications from the same vendor to create complete tax planning/tax preparation capability in your firm. Many of the products offer free demos, so potential users can easily try out the product prior to purchasing. While these products cannot predict what tax laws will and will not pass, what they can do is help you provide your clients with the information they need to make conscious decisions about their finances, both personally and professionally. If you're already using one of these vendor's products, it may be best to start there, ensuring good integration with other product applications. If you're not using a vendor's product, take a look at all of them to determine what best suits the needs of your clients and your firm. en you'll be ready to start planning the future for your clients. BASIC SYSTEM FUNCTIONS CORE TAX PLANNING FEATURES REPORTING INTEGRATION/ IMPORT/EXPORT HELP/ SUPPORT OVERALL RATING BNA Income Tax Planner CCH ProSystem fx Planning Drake Tax Planner Intuit Lacerte Tax Planner Thomson Reuters Planner CS Mary Girsch-Bock Mary Girsch-Bock Mary Girsch-Bock began her career as an accountant in the property management and healthcare industries. She is now a eelance writer specializing in business and technology issues and is the author of her first book, several HR handbooks, training manuals, and other in-house publications. She can be reached at mary.girschbock@cpapracticeadvisor.com . BEST FIT BNA Income Tax Planner is a good fit for mid-sized firms that require more complex tax planning capabil- ity in a multitude of states. PRODUCT STRENGTHS • Integrates with bridges offered by third-party tax applications • Offers a wide range of calcula- tions for multiple situations for prior, current and future years • Product is available in both desk - top and web-accessible editions POTENTIAL LIMITATIONS • Does not handle non-resident taxes for all states SUMMARY & PRICING BNA Income Tax Planner is a good fit for firms that want solid third party integration, as well as anytime online access. Product pricing depends on deployment method, as well as number of users, with support included in pricing. Current base pricing for new users to the online version of the product is running $1,148 per year, with additional user licenses extra. www.bna.com BNA Income Tax Planner Read the full review and see expanded ratings for this product online at: www.CPAPracticeAdvisor.com/12250128 5 2016 OVERALL RATING