2017 tax software survey

CPAs rely on their software to carry them safely through the tides of tax season. Here’s how they assessed their products’ fitness.
By Paul Bonner

2017 tax software survey
mattjeacock/iStock

CPA tax preparers would no doubt agree that despite their experience and preparations for tax filing season, every year brings unforeseen challenges. Having dealt with the vicissitudes of tax season, many of them sit down with our questionnaire to assess how well their tax preparation software helped bring them through, and we thank them for their time in sharing their insights with others in the profession. This year, the survey yielded 3,544 responses from CPAs who prepared tax returns in 2017 for a fee. While their answers were largely consistent with those of previous years, they also yielded a few unexpected areas of consensus.

This year, we checked again on the reported incidence of tax identity theft. Fewer CPAs than in 2016 reported encountering identity theft among their clients, it affected fewer of their clients, and they reported somewhat less difficulty in resolving the thefts that did occur (see the sidebar, "Fewer CPAs See Tax ID Theft").

PRODUCTS COVERED AND PROFILE OF RESPONDENTS

This year, the survey asked about 14 professional tax preparation software products, and, as in past years, three products together were used by a majority of respondents. UltraTax CS, a Thomson Reuters product, was used by 22% of respondents; CCH's ProSystem fx was used by 20%; and Lacerte, by Intuit, accounted for 17%. Those percentages are each within one point of last year's shares of users. Similarly, the next tier of products by numbers of users were each within one point of last year's numbers. Drake, by Drake Software, and ProSeries, by Intuit, were each used by 11% of the sample. ATX, by CCH Small Firm Services, was used by 5%, the same percentage as last year. (For the results of last year's survey, see "2016 Tax Software Survey," JofA, Aug. 2016.)

Although it is not widely used among respondents, CCH Axcess Tax, a product used predominantly in larger firms, while not showing a big increase in absolute numbers, did grow in share of respondents from 2.5% last year to 4.4% this year. This may reflect an overall trend continuing from last year of relatively more survey respondents being in midsize to larger firms. The remaining seven products combined (CrossLink, GoSystem Tax RS, Intuit ProConnect Tax Online, TaxAct, TaxSlayer Pro, TaxWise, and TurboTax) were used by less than 8% of respondents, and while they are not included in the charts and analysis in this article, information about them, along with more information and data on the "major" products, is available here.

Firm size: Again, more survey respondents this year were with larger firms. Representation of sole practitioners fell to 28% from 30% (and from 36% in 2015). Respondents in firms of two to five preparers and six to 20 preparers, however, were little changed at 37% and 22%, respectively. Those in firms of between 21 and 100 preparers increased about a point to 8.5%, and respondents in firms of 101 to 500 preparers edged up from 1.8% to 2.1%. Firms of 501 or more were little represented at 1.7% of respondents, nearly all of whom were users of either CCH Axcess Tax or ProSystem fx. Respondents' reported numbers of clients showed a similar pattern to the number of preparers. So, to generalize, ATX and Drake were used mostly by smaller firms; Lacerte, UltraTax CS, and ProSeries inhabited the broad middle market; and CCH Axcess Tax and ProSystem fx were represented among firms of a wide range of sizes but particularly among the largest firms. (See the chart, "Favorites by Firm Size.")


Favorites by firm size

Rankings by firm size

Types of returns: This correlation was also present in the relative percentages of business versus individual returns prepared. For all major products combined, the largest number of respondents reported that half to 75% of their returns were those of individuals and 26% to half were for businesses (51% and 45%, respectively). The preparation of a relatively larger percentage of business returns was more often reported by users of CCH Axcess Tax (20% of whose users reported that between 51% and 75% of returns were for businesses), ProSystem fx, and UltraTaxCS.

Who chose the software: Consistent with its use by mostly larger firms, CCH Axcess Tax was the least likely to have been selected for use in the practice by the respondent, with only 35% of its ­users saying they made the decision to use it and 37% having had no say in the matter. Similarly, 38% of ProSystem fx users decided on using that product, with 25% having no input into the decision. On the other end of the spectrum, 94% of ATX users and 92% of Drake users personally selected the product, reflecting these products' prevalence in sole or small practices. For the others, a majority of respondents selected the product: ProSeries, 86%; Lacerte, 64%; and UltraTax CS, 60%, with relatively few having no input.

GENERAL PERFORMANCE RATINGS

Again this year, most respondents were generally satisfied with their software, with most ratings clustered close to the average for all major products of 4.3 out of 5. Drake users gave it the highest overall favorability rating (4.5), followed closely by UltraTax CS (4.4), ATX and ProSystem fx (both 4.3), Lacerte and ProSeries (both 4.2), and CCH Axcess Tax (4.0). As in previous years, Drake users registered their approval of the product more specifically as well, giving it the highest average rating for most of the performance indicators tallied in Table 1. For two attributes, however, Drake scored below average: integration with other accounting software (3.3—the average for all major products was 3.5) and ease of importing data (3.5, versus 3.6 for all major products combined). For both these features, UltraTax CS, on the other hand, surpassed all others at 3.9.

Table 1: Overall ratings

Ease of use: For ease of use, a key general consideration, respondents were generally favorably disposed toward their software, although CCH Axcess Tax and ProSystem fx users rated usability 3.6 and 3.9, respectively, below the average 4.2 for all major products. Above-average ease-of-use marks for Drake, ATX, ProSeries, and Lacerte correlated with more of their users picking this as a most-liked feature, described below.

Integration: ATX users rated its integration with other software and data importation even slightly lower than did Drake users (3.0 and 3.3, respectively). However, ATX received nearly the highest marks (second only to Drake) in e-filing ease and how it handled updates. Lacerte users gave it the lowest marks of any major product for how it handled updates (4.1), which was also borne out by write-in comments, described later.

Number of forms: Asked if their software provided all needed forms, 15% overall said it did not, close to last year's 16%. By far, the least deficient in forms were ATX (only 4.8% said it did not contain all necessary forms) and UltraTax CS (6.6%). Users of ProSeries notably faulted it in this regard (29%), followed by Lacerte (23%). This finding for ­ProSeries correlates with the "least liked feature" results described later.

LIKES AND DISLIKES

It might seem odd that when asked about ease of use, Drake users gave it the highest rating, but then did not pick ease of use as a best-liked feature, with only 19% doing so, close to the average for all major products. Instead, Drake users picked price and product support far more often as a most-favored feature than users of the other major products (see Table 2). Lacerte was the software with the most "liked best" votes for ease of use than any other product (26%).

Table 2: What did you like best about the tax preparation software you used this year?

Drake was the only product for which product support was the second-best-liked feature (and for no product was it the most-liked feature), although for ProSystem fx, it was third. This finding for Drake is also reflected in responses to specific questions about support, described below. Next after Drake in "likes" for price was ATX, with 29% of its users' voting for price as a best-liked attribute. As mentioned above, ease of use also was picked as a top feature by users of ProSeries (26%), ATX (24%), and Drake (19%), correlating with their favorable ratings for this feature. However, although relatively fewer users of CCH Axcess Tax and UltraTax CS picked ease of use, it was still their third-best-liked feature at 13% and 18%, respectively.

Users of UltraTax CS most often picked accuracy as a top attractive feature (24%), and accuracy was the second-most-often-approved trait by users of ProSystem fx (28%), CCH Axcess Tax (24%), and Lacerte (22%). Number of forms/comprehensiveness was prized by users of ProSystem fx (29%), followed by CCH Axcess Tax (26%), as both those products' most-often-liked feature.

As previously, price registered as the No. 1 least-liked feature for most major products: UltraTax CS (38%), Lacerte (37%), ProSystem fx (37%), CCH Axcess Tax (26%), and ProSeries (25%), percentages that generally matched last year's (see Table 3). Lacerte users' price antipathy eased a bit from 40% in 2016, while CCH Axcess Tax edged up in this category from 22% last year. Also like last year, "tax research included in package" was the top dislike for Drake (21%), followed closely by integration with other software (20%). Product support was found wanting among 22% of ATX users, making it that software's top least-liked feature. ProSeries was the only product to garner a double-digit percentage of thumbs down (12.5%) for its number of forms/comprehensiveness, which correlates with results on the specific question of whether the software contained all needed forms, mentioned above.

Table 3: What did you like least about the tax preparation software you used this year?

Because "other" answers for some products' top three dislikes ramped higher than previously, we took a closer look for write-in trends. Difficulties related to state returns figured in the largest number of these, with 61 write-in responses. Many mentioned problems with multistate returns. However, these appeared fairly evenly distributed among the software products, which may say more about the states than about the software. A significant number of write-in complaints (41) mentioned software updates as a problem, most often saying they were too frequent and/or disruptive, with some saying they occurred at inconvenient times and a few mentioning a requirement of all users to log out of the system while it updated. The bulk of these comments implicated two products: 29 were by users of Lacerte and eight by users of ProSystem fx.

PRODUCT SWITCHING

The survey asked those who switched from one product to another for this year why they did so. However, these data should be regarded circumspectly since they represent a relatively small sample. Only 220 respondents said they had switched from the product they used to prepare 2015 returns. Table 4 shows the product they switched from and percentages of selected reasons for switching. Unsurprisingly, price figured prominently—it was the top reason overall and the most frequent reason, specifically for five of the seven major products. Because "other" was among the top choices for most of the products, we scanned write-in answers. No clear trends were discernible, and many responses didn't reflect on the software per se; firm mergers or other operational changes of practices were most often mentioned.

Table 4: Why did you switch from the software you used last year?

The survey also asked whether users planned to use the same software again next year; the overwhelming majority typically say they will, and this was true again: An average of 98% said they planned to do so, and for no product was that commitment soft.

BEST FOR A NEW PRACTICE

The survey also asked what software respondents thought would best serve a new tax practice. Although respondents could recommend a different software than the one they use, the data presented in Table 1 are limited to users of a software product recommending that product for this purpose. This percentage was highest for users of Drake (93%), followed by ATX (88%), but with ProSeries (79%), UltraTax CS (72%), and Lacerte (71%) also garnering significant approval. One write-in response, while not recommending a particular product, gave perhaps the best advice, especially given the widespread disaffection with most tax software's cost: "Get the best product you can afford."

TRAINING, TECHNOLOGY, AND SUPPORT

Most users, as in years past, reported needing technical support at some point during the tax season (83% overall; see Table 5). Correlating with Drake users' picking support as a prime feature they liked about the software, those users gave support the highest numerical rating of users of all products, both for quality (4.6) and ease of obtaining it (4.8). This is also consistent with 2016 responses.

Table 5: Technical support

As previously, the telephone remained the predominant method of obtaining support for users of all major products, although email and instant messaging (IM) or live electronic chat continued to grow in use. Email was used by 30.5% of respondents, slightly above 2016 (28%) and 2015 (29%) levels, while IM/chat use grew by three points over last year and five points from 2015. Both email and IM/chat were used most extensively this year and at higher rates than in 2016 by users of CCH Axcess Tax.

As in past years, nearly one-third of respondents reported receiving training from the provider in using their software. Users of ATX reported the lowest rate of receiving training at 13%, while 65% of CCH Access Tax users were trained by the provider, as were 44% of Drake users and 38% of users of UltraTax CS. Drake users gave the quality of the training they received the highest marks, averaging 4.4 out of 5, followed by ATX at 4.3 and ProSeries at 4.1.

THE VIRTUE OF FAMILIARITY

Given the complexity of tax law and procedure and the variety of formats and systems that have evolved for entering data in these software products, some tax preparers may reflect on how remarkably well most of it works most of the time—particularly those old enough to remember preparing returns on paper as their only option. Even so, users of most products surveyed did not rank "learning curve" among the top three least-liked features of their software (CCH Axcess Tax being the exception, whose users criticized that trait 15% of the time, its second-least-liked feature). But neither did many users say they particularly liked their software's learning curve, suggesting it is steep enough—along with what appears in most cases to be a considerable investment—to deter many from trying out a different product. Typical among many of the "other" write-in answers for best-liked features was, "Have used it for many years" (also reflecting the relatively small numbers noted above who switched products). Faint praise, perhaps, but familiarity with this essential tool of the trade at least provides some stability in what otherwise can be a trying, if not tumultuous, season in many practices. However, for those wanting or needing to set a new course, to try a different product from the one they know, hopefully, this survey's results can shed a little insight. 


Fewer CPAs see tax ID theft

Fewer respondents reported encountering ID theft among their clients than in 2016, when 59% of respondents saw it ("CPAs Contend With Tax ID Theft," JofA, Aug. 2016). In fact, in this year's survey, that figure was nearly reversed: 57% said they did not see tax ID theft among their clients, while 43% did. Moreover, for CPAs who did have clients whose identities had been stolen, more respondents than last year said those clients were independently aware of the theft (28%, up from 22% in 2016) rather than the CPA's having to break the unwelcome news.

Also, those who did have clients who suffered ID theft this year generally said it affected fewer of those clients. The percentage of clients affected, as before, was generally low, with 96% of respondents this year saying fewer than 5% of clients were affected (95% in 2016). Those reporting 5% to 10% of clients affected by identity theft went down more, from 3.8% of respondents to 2.7%. However, while only three respondents reported that more than 15% of clients had been affected in 2016, seven respondents did so this year.

Furthermore, dealing with the IRS to resolve ID thefts may have been slightly easier on average. In 2016, on a scale of 1 to 5, with 1 being very difficult and 5 being very easy, the reported difficulty in resolving ID theft averaged 2.7; in 2017, that average edged up (toward easier) to 2.9. CPAs rating the difficulty level as a 1 (very difficult) fell from 18% to 14%, and those rating it a 2 fell from 22% to 19%.

These findings appear consistent with the IRS's report last fall that 50% fewer taxpayers filed identity theft affidavits in the first nine months of 2016 than in the same period a year earlier (see IRS News Release IR-2016-144).


Results and methodology

The survey was conducted from May 1 through May 24, 2017, and received 3,544 responses from CPAs who indicated that they prepared 2016 tax returns for a fee. The tables accompanying this article show answers for the seven most-used products of the 14 asked about in the survey (and 1% of respondents wrote in others). For more information and ratings covering all the products asked about, click here.


About the author

Paul Bonner is a JofA senior editor. To comment on this article or to suggest an idea for another article, contact him at Paul.Bonner@aicpa-cima.com or 919-402-4434.

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