2009 Tax Software Survey

BY ALEXANDRA DEFELICE
December 1, 2009

The JofA and The Tax Adviser conducted a survey of their readers to determine what aspects of their tax preparation software they like and what they dislike. The survey, which received 9,776 responses, was carried out in late June and early July 2009. Of the 13 products identified for the survey, Drake scored the highest overall rating (4.439) on a scale of 1 to 5, with 5 meaning “very good.” In a virtual tie with Drake was UltraTax CS, a Thomson Reuters product that earned a 4.436. Thomson’s other package, GoSystem Tax RS, received the lowest score, 3.55 (for the overall ratings, see Exhibit 1).

 

A 2007 JofA tax software survey showed similar results. In that survey, UltraTax scored the highest rating, followed by Drake; GoSystem had the lowest overall rating (see “Users Grade Tax Software,” JofA, Oct. 07, page 34).

 

METHODOLOGY

The exhibits show detailed answers for 11 of the 13 products listed in the survey, including ATX (CCH), Drake, GoSystem, Lacerte (Intuit), ProSeries (Intuit), ProSystem fx (CCH), TaxAct (2nd Story Software), TaxWise (CCH), TaxWorks (RedGear Technologies), TurboTax (Intuit), and UltraTax. Products that received fewer than 100 responses—TaxSimple and TaxSlayer Pro—are not shown here, but information about those products is available online (see journalofaccountancy.com/Web/20091824.htm). IntelliTax, which was included in the 2007 survey, was eliminated from this report because it was acquired by CCH and will be discontinued.

 

EXHIBITS

 

MOST AND LEAST POPULAR

Ease of use topped the list of the best-liked features across all products at 28.5% (see Exhibit 2). Intuit’s products were the leaders in that category, with 48.8% of TurboTax users selecting that as their favorite feature, followed by 41.2% for ProSeries users and 38.3% for Lacerte users.

 

Number of forms/comprehensiveness came in as the second most popular feature across all products. CCH’s ProSystem emerged as the leader there, with 32.5% selecting this feature, followed by GoSystem, with 31.5%.

 

Price was the feature that users liked least, with 34.8% of respondents across all products selecting that answer. Lacerte users expressed the highest percentage of price dissatisfaction, at 52.5%, followed by UltraTax in close second, at 51.9% (see Exhibit 3).

 

Those products have higher price tags than most of the others included in this survey. The price for Lacerte’s Federal 1040 package for the 2009 season is $2,699—a $149 increase over the 2008 season. UltraTax costs $2,250, a $50 increase. The only product that costs more is ProSystem, at $3,585, a $140 increase, and 39.9% of ProSystem users selected price as the thing they liked least about that product.

 

TaxAct and TaxSlayer Pro sit at the other end of the spectrum. Users of those products said price was the feature they liked the best—61.5% for TaxSlayer Pro, which costs $895, and 58.9% for TaxAct, which costs $119 for the Preparer’s 1040 Edition. Neither vendor raised prices this season.

 

Preparers are generally not jumping ship to other products, but for the 4% of total respondents who did switch their tax preparation software for the 2008 season, price was the most often cited reason (35.7%) (see Exhibit 4).

 

Those who do switch must consider several other factors, including ease of use and ease of learning. TaxAct scored the best in both of those categories, with its users giving it a 4.44 out of 5 for ease of use and 4.49 for ease of learning. GoSystem scored the lowest, with 3.17 and 3.08, respectively (see Exhibit 1).

 

On the more technical side, Drake received the best score for how well it ran on users’ networks, with 4.68; GoSystem scored the worst, with 3.93.

 

TECHNICAL SUPPORT

Regardless of how easy the software is to use, the survey found that most users—73.7% across all products—needed some kind of technical support in the 2008 season. Most (93.1%) got their tech support over the phone, while 31.4% selected e-mail and 10% live chat.

 

How easy it was to get that help and just how good it was varied (see Exhibit 5). Drake users gave their tech support the highest rating for quality (4.52) and the second highest rating (4.70) in response to the question, “How easy was it to get technical support from the vendor?” TaxSlayer Pro got the highest rating in response to that question (4.78) and came in second for quality of tech support (4.33).

 

Drake and TaxSlayer Pro were two of only three vendors to have a live person answer the phone when called for this article. The other was TaxSimple, which came in fourth in both categories, after UltraTax.

 

TurboTax scored the lowest in both categories, with 3.18 in how easy it was to get tech support and 3.36 in quality of tech support. But that ranking can be deceiving, because TurboTax also had the lowest percentage of users who needed technical help at all (16.3%), and it was the only product other than TaxAct where fewer than 50% of respondents said they needed help last tax season.

 

Removing TurboTax from the picture on this question, TaxWise came in last for ease of getting help, with a 3.38, and GoSystem came in last for quality, with a 3.58.

 

WHO USES WHAT?

With so many products to choose from, firm size plays a big role in the selection process. CCH’s ProSystem tax software won this year’s popularity contest, with 28% of the 9,776 survey respondents indicating that they used it. Lacerte users totaled 19% of respondents, and 14% used UltraTax.

 

ProSystem by far surpassed other products in firms with six or more preparers and those preparing returns for more than 500 clients, with 47.9% and 43.3%, respectively. Overall, 89% of firms that prepared returns for more than 500 clients and 91% of firms with six or more preparers used one of four products: GoSystem, Lacerte, ProSystem and UltraTax.

 

Smaller firms showed more variety in their tax preparation software choices, but, overall, Intuit’s products dominated. For firms with five or fewer preparers, 20.6% used Lacerte and 15.5% used ProSeries. For those preparing returns for fewer than 100 clients, TurboTax, another Intuit product, took the lead with 25.5% of respondents, while 15.6% used ProSeries and 12.3% used Lacerte.

 

That brings up an interesting anomaly. Intuit markets TurboTax as a consumer product, yet 724 respondents—7% of the total—said they used TurboTax to prepare 2008 tax returns for clients or their company. Those respondents were overwhelmingly sole practitioners (83%), and 91% prepared returns for fewer than 50 clients. Individual accountants who responded to an inquiry about these findings said they used TurboTax for themselves and family members. Price may also be a factor: TurboTax costs $74.95 vs. $1,399 for ProSeries and $2,699 for Lacerte.

 

NEW AND IMPROVED

Intuit is trying something new to help preparers who are switching to ProSeries this season with a new user on-boarding program. The program provides new customers with a specialist to help walk them through the ProSeries tax preparation process and monitor their readiness for tax season. It also includes step-by-step assistance for converting prior-year data into ProSeries.

 

Many of the other vendors are focusing on security improvements for this season. TaxWise added e-file encryption and a security manager, which allows the office manager to handpick which tasks and software each staff member can access. Drake also introduced role-based security and now has the ability to password protect and e-mail PDF copies of tax returns. TaxWorks included audit checks on many fields. TaxSlayer Pro provided off-site backup and storage, and TaxSimple double encrypted its files.

 

Many continue to look toward the Internet. Half the vendors have online client portals as well as Web-based versions of their products, while the others retain the desktop. But even some of the latter are introducing features such as online knowledge bases and e-mail alerts and are improving their e-filing capabilities.

 

Alexandra DeFelice is a JofA senior editor. To comment on this article or to suggest another article, contact her at adefelice@aicpa.org or 212-596-6122.

 

More information about each tax preparation software vendor, including prices, features, and contact information, as well as product-by-product survey results, can be found at journalofaccountancy.com/Web/20091824.htm.

 

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