The ultimate magic would be if that if no paper was involved, from getting the information into the return, filing it with taxing authorities and having all communication with clients done that way. The element which has had the most progress is the filing part and with efiling mandates increasing from federal and state authorities, vendors are filling out their lines with new forms and new efiling abilities.
"We had some states where were supporting only the 1040," says Julie Kozloski, senior product manager for Intuit's ProSeries tax preparation product. The company has now completed its business offerings for other states. For both ProSeries and its sister package, Lacerte, federal 1041 efiling is now available as well as a 1041 organizer that can be used as a workflow tool.
The biggest changes are coming in Intuit's third product line, the Internet-based ProLine tax. During this year's tax season, its first on the market, ProLine was available only for the federal 1040 and 25 state 1040s. For the 2010 tax software, it will be available for all 1040 states and business forms will be available, along with efiling. Multi-user capabilities have already been added.
One major difference is pricing. ProLine had an introductory price of $9.99 per return during the last tax season. That price still stands but bundled pricing has been added. There is a 20-return bundle for $299 and a 50-return bundle of $499 for 1040s. There's also a uniform price for the business returns. There is a $39.99 per return pricing for forms 1065, 1120 and 1120S. There are bundles for any combination of returns with a 10-return bundle at $249 and 25 returns for $499.
CCH has also introduced a SaaS product as part of its next generation ProSystem fx Tax offering. But it's still early in the game for many CCH users according to product manager Angela Askew.
"We continue to take feedback from early adopters," she says. And that feedback indicates those firms using more than one ProSystem fx product are moving to the new platform one application at a time. Generally, Askew says reviews for the product have been good.
While the tax preparation program is ramping up, adoption of the CCH Portal has been much quicker. Askew says it has been one of the most successful products CCH has recently introduced and said the portal is a key element to the ProSystem suite.
Meanwhile CCH has expanded its e-filing line and has added "13 new partnerships electronic filing items, and added 25 corporate efiling items," Askew says. The tax product also has an electronic filing status system, which lets preparers view which returns have been accepted by states and which rejected in a grid view.
Thomson Reuters is also providing what is says are more robust tools for monitoring efiling. According to Scott Fleszar, senior director of strategic marketing, taxpayers whose prepares utilize his company's UltraTax CS product will receive an automatic email telling them that returns have been accepted by taxing authorities.
UltraTax CS is also being enhanced to work in a multiple monitor environment. The system will automatically detect the number of monitors connected to the system and adjust the displays to maximize the usable area, says Fleszar.
The Bank Product Mess
The most volatile element in tax preparation has been the bank products market with refund anticipation loans likely to be in short supply. However, one new product, prepaid debit cards, seem likely to pick up some of the slack for those without bank accounts, who are part of the RAL market.
Intuit is offering QuickCollect, which enables fees to be deduced from the debit card. Similarly Drake Software is entering its second year with its eCollect program from EPS Financial except that this year the product can be used by taxpayers who use Drake's 1040.com. The program costs preparers $5 per customer. Drake is splitting the fees paid by the 1040.com users. Advent Financial, which markets the GetItCard, is providing bank products to users of Drake, Tax Slayer and Petz Enterprises CrossLInk, and the company's website says its enrollment is still open to EROs. The company distributes funds in three ways: via the E1 Visa prepaid card, direct deposit to taxpayers' bank accounts or checks print in the prepaper's office. TaxWorks is offering a debit card through Visa and CCH Small Firm Tax Services has also added a debit card that can be used for both its TaxWise and ATX software lines.
Those interested in refund anticipation loans and refund transfers are more likely to have luck getting the latter. Chase voluntarily dropped out of the RAL market this year. Last year, Santa Barbara Bank & Trust was forced out by regulators. The company that spun out as Santa Barbara Tax Products Group offered only assisted transfers during the 2010 tax season and had hoped to provide RALs this year through funding by Meta Bank. However, that bank was also forced from the market by regulators.
Intuit has integrated its Pro Series Software with Refund Advantage and SBTPG, which has found a new banking partner. Drake is working with Republic Bank and River City Bank, as well as Refund Advantage and SBTPG. Olsen says CCH is working with both banks and Refund Advantage for TaxWise and ATX. "There's a mix in terms of what each of them is providing," he notes
TaxWorks, owned by RedGear Technologies, has linked up with Citizens Bank, a subsidiary of First Citizens Bank Corp, to provide refund transfer products to users of its tax software. The agreement also offers the ability to provide checks and direct deposits via Citizens Bank.
There have been changes aimed at getting data into tax packages without the need to enter data.
Drake Software is adding 2-D barcodes to K1s and W2s. Data from scanned documents will be imported into the tax software. John Sapp, Drake sales vp, believes that barcoding is going to become more widely available. Likewise, CrossLink is also offering barcoded source document.
"We expect that the large W2 providers will start producing barcodes in the next two years,'" Sapp says