2017 tax software survey.

AuthorBonner, Paul

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.

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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 Bonner, "2016 Tax Software Survey," 47 The Tax Adviser 570 (August 2016), tinyurl.com/y7w3rggq.)

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 in a link from the online version of this article at thetaxadviser.com/software.

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). Firms of two to five preparers and six to 20 preparers, however, were little changed at 37% and 22%, respectively. Firms of between 21 and 100 preparers increased about a point to 8.5%, and 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%, and nearly all those respondents 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 are 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.")

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 UltraTax CS.

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.

Favorites by firm size

General performance ratings

Again this year, most respondents were generally satisfied with their software, with most 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 perfomance indicators tallied in Table 1 on p. 570. For two attributes, however...

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