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Technology Blog: Critical Features of Tax Planning Software

By Victoria Kosuda, CPA, CITP posted 12-13-2012 10:48 AM

  

Technology Blog: Critical Features of Tax Planning Software
By Victoria Kosuda, CPA, CITP

Potential tax changes can mean uncertainty as CPAs begin preparing for the 2013 tax season. The Technology Interest Group sponsored a Tax planning Software webinar recently to give tax professionals tools for planning multiple scenarios for their clients’ planned and unplanned life events.  Jim Lawrence, CPA, Traphagen Financial and Charles Marshall, CCH to discussed factors to consider in choosing the appropriate tax planning software and provided overviews of  two popular tax planning products: Intuit's Lacerte Tax Planner and CCH's ProSystem fx Planning.

  

When you’re evaluating tax planning software, critical features include:

·         Incorporation of most recent tax rates, rules, etc.

·         Multi-year planning capabilities

·         Direct integration with the each vendor's tax products

·         Ability to compare the prior year, current year (with projections), and future years. 

·         Creation of multiple scenarios that are easy to change and can even be updated during working meetings with a client.

·         Support state calculations

Both the Intuit and CCH product offer these functionalities. However, although both packages support state calculations, neither allow for multi-state projections.  

The key takeaways from the webinar are as follows:

  • The goal of tax planning is to minimize the tax liability in accordance with the rules and regulations that are in effect at that time in order to protect income and grow wealth. It is one of the most valuable services you can provide to your client.
  • Opportunities for planning end on 12/31, so September through December is the key time to utilize this type of software and help your clients for the current year.
  • The integration between tax preparation software and tax planning software is the most important feature to enable an efficient process.  The products are similar in their overall capabilities.  It is the direct import of prior year data from the tax preparation software into the tax plan that is the key functionality a firm should look for when making a software selection.

If any readers have experience with these products or other tax planning tools, please leave a comment to assist other NJSCPA members who may be in the process of determining which tax planning software will best meet their needs.

Access the complete webinar and handouts here:

http://www.njscpa.org/news/article/2012/12/05/selecting-tax-planning-software

As the owner at Beyond Financials Consulting, LLC, Victoria Kosuda, CPA, CITP provides typical accounting and tax services to clients and helps them look at their business differently in order to better manage the performance of their products and services and overall financial results. She is a member of the NJSCPA Technology Interest Group. You can reach Vicki at vicki@beyondfinancialsconsulting.com or 908-358-4680.



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