This year’s tax preparation software survey by The Tax Adviser and the Journal of Accountancy yielded more than 10,000 responses from readers, showing what tax professionals like and dislike about the tax preparation software they used this tax season. As in years past, price and ease of use have a large influence on preparers’ feelings about their software. For the first time this year, the survey also shows that having the responsibility for choosing the tax preparation software product affects the user’s assessment of the product.
As in past years, three products led the pack in the number of respondents using them. Users of ProSystem fx Tax (CCH), Lacerte (Intuit), and UltraTax CS (Thomson Reuters) together accounted for nearly three-quarters of the responses; the remaining one-fourth were divided among, in decreasing order, ProSeries (Intuit), GoSystem Tax RS (Thomson Reuters), Drake (Drake Software), ATX (CCH Small Firm Services), Tax Works (RedGear Technologies), and seven other products that yielded fewer than 64 responses each and are not included in this analysis. Similar to last year, average overall ratings this year for the “big three” products were a virtual tie and in the same order as previously: UltraTax (4.5 on a scale of 1–5, with 5 the highest), followed by Lacerte (4.4) and ProSystem (4.3). (See Exhibit 1.) In the second tier of products by number of users, Drake once again generated the highest overall esteem (4.4), followed by ATX and ProSeries (both 4.2), TaxWorks (3.9), and GoSystem (3.4). The survey was conducted online in May 2011.
Another possible indication of overall satisfaction might be inferred from the percentage of respondents saying they plan to use the same software next season. Ninety-four percent of users of Drake and UltraTax CS plan to stick with them, followed by ProSystem fx (89%), ATX (86.3%), and a tie between Lacerte and ProSeries (84%).
Profile of Users
The products are designed for the most part to cater to firms of a particular size and scope, although some products were used across a wide range of firm sizes. Lacerte, for example, showed up mostly in firms of between 2 and 20 preparers, although it ranked relatively high for one-person shops, which made up 20% of respondents using it. The leading product for one-person firms (which accounted for 18% of all respondents) was ATX, for which 56% of users were sole practitioners. At the other end of the spectrum was GoSystem Tax RS, where 37% of users were in firms of more than 500 preparers (which for all products were only 4.2% of respondents). As a result, GoSystem was also the only software for which respondents who had no input in choosing the system far outnumbered those who had a hand in selecting it, by a factor of more than five to one. Nearly all respondents prepared a significant number of business returns, which for 48% of respondents constituted between 26% and 50% of returns prepared. A majority of users (54%) said that half to three-quarters of returns they prepared were individual returns, with another 19% saying that individual returns made up 76% of all of the returns they prepared.
Features Users Liked Most and Least
When we asked what single attribute of their software users most prized, ease of use got the most responses (28.7%). (See Exhibit 2.) ProSeries and Lacerte won the most regard for this (44.7% and 43.6%, respectively). Respondents who had control over the software selection process tended to regard their software as easier to use than those who did not. Users who had made the software purchasing decision (all brands) gave it an average 4.3 out of 5 for ease of use, while those with no involvement in the choice gave it an average 3.7.
For the next best-liked feature, number of forms/comprehensiveness, the spotlight shifted to ProSystem fx and GoSystem, both billed by their makers as tax preparation and compliance systems, at 33.5% and 31.5%, respectively. Users of those two products were also more likely than most others to pick integration with other software as the software’s best quality, although UltraTax got the most thumbs up for that attribute (19%).
Not surprisingly, the feature of all products most likely to hit a sour note was price, which was faulted by significant numbers of users of Lacerte (56.6%), UltraTax (53.7%), and ProSystem fx (45.3%). (See Exhibit 3.) Correspondingly, price was the factor most often cited by the relatively small number of respondents who reported switching software in 2011 (fewer than 500 for all products), predominantly by former users of the same three products. On the other hand, nearly half the users of TaxWorks (49.6%) and Drake (48.3%) considered those products’ price their most attractive point, followed closely by ATX (43.1%). But price is not everything, and respondents who used any of those three products last year but switched to another product this year most often cited concerns about accuracy and ease of use as the reason for the switch. However, those having switched in this case represent the opinions of only a handful of respondents—fewer than 45 for all three of these lower-cost software systems combined. (See Exhibit 4.)
Not having all the forms needed to prepare a return was seldom cited as the biggest drawback; only 5.4% cited “number of forms/comprehensiveness” as the feature they liked least. However, when the survey asked separately whether their software contained all the forms they needed, 24% of users said no, including a majority of GoSystem users (52%), followed by users of ProSeries (43%). Among the top three products by numbers of users, UltraTax had the lowest percentage of dissatisfaction in this area (10%), with Lacerte and ProSystem fx at 26.9% and 23.3%, respectively. However, ATX ranked particularly well in this regard, with only a little less than 6% of users reporting not having needed forms. The data, however, did not indicate what forms users of any particular product needed.
Data Transfers, Updates, and Filing
Automatic (and accurate) transfer of data from one form to another within a return can make a big difference in speed and accuracy of preparing that return, and users rated UltraTax, ProSeries, and Drake highly in this regard (all three received 4.4 out of 5). Drake also stood out in users’ estimation for handling updates to forms (4.7 out of 5). GoSystem and TaxWorks ranked lowest on this question at 3.5 and 3.9, respectively. Drake also ranked high on ease of general updates and installation (4.8), and each product averaged above a 4 on this question. Drake ranked highest in ease of paperless electronic filing (4.5), with only GoSystem ranking below a 4 (3.5).
Although integration with other accounting software was seldom considered a product’s biggest like or dislike (6.5% and 6%, respectively), users were generally unenthusiastic about their software’s ability in this regard. Here, UltraTax held a clear edge (4.1 out of 5), with the rest in the low to mid 3s.
Tech Support Still Needed
A nearly identical percentage of respondents to last year, 82% (down one percentage point), reported needing technical support from their software’s manufacturer. (See Exhibit 5.) Most, however, said the support was easy or very easy to obtain (76%) and was good or very good (74%). ProSeries and ATX prompted the lowest percentage of help requests at 61.1% and 71.4%, respectively, while 91.6% of Drake users and practically all users of TaxWorks (97%) sought assistance. Despite greater availability of online help in recent years, more users reached for the phone when flummoxed (95%) than queried by e-mail (30%) or online chat (16%). Most users (74%) said they received no training from their software provider, but those who did mostly rated it good or very good (67%).
As in past years, we asked respondents who had switched software whether a factor was the bundling of tax research software with their tax preparation software. Again this year, the percentage who said it was a factor was low (4%). However, this year we asked respondents to rate their tax research software (whether or not they switched or whether or not it was included with their tax preparation software). The answers to those questions will be included in a follow-up article in the September issue.
Product by Product Results
Full survey results for each product are available on the Journal of Accountancy website.
Paul Bonner is a senior editor of the Journal of Accountancy. For more information about this article, contact Mr. Bonner at firstname.lastname@example.org or (919) 402-4434.