Rating Tax Software

User satisfaction with products dips a bit.
BY STANLEY ZAROWIN

EXECUTIVE SUMMARY
  • TAX SOFTWARE PREPARERS continue to be satisfied with the products they used this year, but their fondness has cooled somewhat from last year.
  • CUSTOMER SUPPORT HAS IMPROVED, they report.
  • SOME 83% OF THE USERS said they would continue to use the same package this year; 6% said they plan to switch; and 11% were undecided.
  • ELECTRONIC FILING continues to grow, it appears. Some 63% of the respondents said they offered electronic filing and transmitted 44% of their eligible returns to the Internal Revenue Service.
  • SOME 58% OF ELECTRONIC filers charged a separate fee for the service. Three-quarters of the respondents said they plan to offer electronic filing next year.
  • ELECTRICITY HEDGING SHOULD NOT BE a profit center for most companies outside the utility industry. Hedges should only offset exposures created by core businesses.
STANLEY ZAROWIN is a senior editor on the JofA. Mr. Zarowin is an employee of the American Institute of CPAs and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.

lthough tax software preparers are satisfied with the products they used this year, their fondness has cooled somewhat from last year. On the other hand, customer support has improved, they say. A These are some of the conclusions of a nationwide survey just conducted by the National Association of Tax Practitioners (NATP), an organization that provides educational services and research for tax professionals. NATP members were asked to rate their software, and 1,103 of them provided reports of what they liked and didn't like about their software and their vendors' customer support. Although we received input on 35 products, we report on only the 18 that produced assessments from 10 or more users; we felt that assessments from fewer than 10 were not statistically valid.

LIKES AND DISLIKES

Users were asked to rank their software from 1 (very dissatisfied) to 5 (very satisfied). The 18 products received an average rating of 3.95, down a bit from last year's 4.22. However, the average rating for customer support rose to 3.81 from 3.74. The 290 responding preparers who use network versions of their software rated their products an average 4.00; there are no comparable data for last year. Exhibit 1, pages 2829, lists the respondents' assessments. Some 83% of the users said they would continue to use the same package this year; 6% said they planned to switch and 11% were undecided. These percentages do not include those who had to switch because their products are being discontinued (for more on consolidation in the tax software industry, see the preceding article, "Tax Software Hits the Net," page 24). Although we lack comparable year-to-year data, it appears that electronic filing continues to grow because of its convenience, accuracy and speed. Some 63% of the respondents said they offered electronic filing, and they transmitted 44% of their eligible returns to the Internal Revenue Service. Some 58% of electronic filers charged a separate fee for the service, and they reported transmitting an average of 25% of their returns. However, those that didn't charge a separate fee transmitted an average of 70% of their returns. Three-quarters of the respondents said they planned to offer electronic filing next year, and 57% of these planned to charge a separate fee for the service. Details are in exhibit 2, page 28. And for a list of the 18 vendors covered by this survey, see exhibit 3, page 29.

Exhibit 1: How Users Rate Their Tax Software
Vendor Tax Program Number of Surveys Returned Average Number of Returns Filed by Users Satisfaction With (1=very dissatisfied and 5=very satisfied)
Program in 1998 Program in 1997 Customer Support in 1998 Customer Support in 1997 Network in 1998
Plan to Use Product Next Year
  Yes       No    Undecided
AM Software AM-Tax Professional 1040 32 231 4.19 4.32 3.94 4.07 4.50 88% 3% 9%
Arthur Andersen A-Plus-Tax for Windows 11 570 3.82 N/A 4.55 N/A 3.50 55 9 36
ATX Forms Saber 1040 41 209 3.32 3.41 3.56 N/A 3.33 63 15 23
CCH Computax ProSystem fx 53 483 3.92 4.25 4.02 4.38 4.28 85 6 9
Creative Solutions UltraTax 53 642 4.12 4.08 4.00 3.76 4.13 91 6 4
Drake Software Drake 110 860 4.17 4.21 3.81 4.05 4.29 93 5 2
Dunphy Systems 1040 Professional Tax Preparation 34 523 4.21 4.39 3.97 4.20 3.88 85 0 15
Intuit ProSeries 247 354 3.99 4.17 3.76 3.89 3.57 85 2 13
Lacerte Software Lacerte 1040 Tax Software 109 612 4.20 4.50 3.98 4.49 4.17 90 5 6
Micro Vision Software Tax Relief 1040 57 655 3.35 4.12 3.14 3.67 3.44 58 16 26
ORRTAX Software 1040 Preferred 27 334 3.56 N/A 3.41 N/A 2.50 74 7 19
TAASC The Professional Tax System 72 486 3.72 3.97 3.49 3.96 4.11 78 7 15
TaxByte TaxByte Tax Prep Software* 67 655 4.28 4.57 4.20 4.43 4.50 N/A N/A N/A
Tax$imple Tax$imple

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