Where do you and/or your clients go for help when seeking information for filing a Form 1041 return for an estate or trust? The IRS Web site? The answer is "Yes" if you have patience and a sense of humor. Visitors to the site are confronted with a PDF file containing 44 pages of instructions! They discover that such a return could entail completing Schedules A,B,D,G,I, and J, as well as K-1s for each person receiving distributions. Users also might conclude that the 44 pages of instructions were insufficient for the task at hand.
For even the most seasoned tax preparation professionals, preparing and filing Form 1041 returns can be complex and time-consuming. Fortunately, the applications described in the following reviews feature an extensive range of functions and capabilities that enable tax preparers to work smarter, faster and with much less paper.
All of these applications incorporate features that help preparers determine what schedules and forms must be completed and submitted for a particular Form 1041 return. One application offers a list of questions that prompts the preparer to compile the necessary information, while another offers a series of online worksheet forms that address all of the filing requirements for a particular return. These applications also direct preparers to the tax return requirements of individual states.
Saving time and improving accuracy are two of the most important reasons for using packaged software. Personal and financial information entered on a worksheet, form or schedule is automatically transferred to the appropriate lines or spaces on other documents--eliminating the time and tedium associated with manually reentering data. Because calculations are likewise performed automatically, the opportunities for simple mathematical errors also are reduced.
Schedules, worksheets or forms can be reviewed by clicking on links or opening electronic files, rather than sorting through stacks of paper. Other efficiencies are gained through online note forms, calendars and appointment books, as well as having the capabilities to print client invoices, letters and labels.
These applications also enable users to capitalize on the speed and easy access to information on the Internet. Although certainly nothing new, e-filing capabilities are included in many of the packages. Client e-mail messages can be easily composed and sent with related files attached. Links to company Web sites provide tax preparation support, IRS updates and application information.
Which application might work best for your firm? That depends on a variety of factors, including the types of tax preparation services typically required by your clients, the general capabilities or functions you value most, and your preferences regarding computing styles and software vendors.
Built-In Custom Spreadsheets can be Created from a Hot Key for any Form, Schedule or Worksheet
ATX TotalTax Office Prepares 1041 Returns With Spreadsheet Format
ATXForms is one of the "babies" in the tax software business. Founded in 1992 by Glynn and Steve Willett, ATX has always produced software using a Windows interface. It is well designed, as evidenced by its stated growth to 40,000 professional users. TotalTax Office combines ATX's popular MAX and Saber packages, as well as Kleinrock's TaxExpert and ZillionForms, with more than 10,100 tax forms, including school district applications, in one package.
Simple to install, you're up and running in a matter of minutes. Included on the auto-running CD-ROM are several tutorial videos narrated by "Maxwell," ATX's online help "mascot" (think Microsoft Word's paperclip or Einstein). While Max well currently talks you through preparing Form 1040 or an 1120S, the company indicates that he will be out of a job in the 2004 version, although the same level of guidance and assistance will be provided. (However, the information applies, in general, to all ATX programs.) Numerous on-line "Quick Tutors" also help with particular tasks. With the most recent version, online help is now field-specific, which saves some time. Also available online are the actual IRS instructions (in Acrobat format). According to ATX's Web site, Web classes will be offered soon for those interested in learning more about the software.
Accountants love spreadsheets, a feature ATX has used effectively in the program. Built-in custom spreadsheets, a power-user feature, can be created for any form, schedule or worksheet. Once the worksheet is created, Start Link/Finish Link, a built-in feature, is used to link individual cells to lines on forms where information is compiled and distributed from one form to another. When compared to the custom spreadsheets of other tax packages, ATX worksheets are more flexible, but also require more work to use them effectively. Accountants who do not enjoy spending a lot of time developing worksheets and links may find the package too time-consuming to justify the savings in dollars.
Data is generally entered directly into on-screen IRS forms. If you prefer interview-type input, you won't find it for the fiduciary module--it is only available for Forms 1040, 1065, 1120 and 1120S. Fields with associated schedules or worksheets are bordered in maroon; clicking the rabbit icon "jumps" you to a screen for entering supporting data. As you add forms, schedules and worksheets, a new tab is created at the top, under the tool bar. Changing from one to another is as simple as a mouse click.
You can buy ATX products individually or bundle them in just about any way imaginable. ATX offers as much or as little as you need in the way of features--and all for pretty reasonable prices, too. Options include Saber PRS11, with access to all Saber forms and the ability to print 11 free returns; and TotalTax Office Plus, which includes MAX, Kleinrock's TaxExpert (with line-by-line integration within MAX), plus special editions for California, New York and Employment research, as well as unlimited e-file and Web organizer.
ATX also offers accounting software (Total Accounting Office). While general ledger data currently must be entered manually into the tax software, ATX says that an automated data transfer from Total Accounting Office to tax forms will be available this year.
Updates are available directly from the www.atxinc.com or from CD-ROMs mailed from the company. ATX supports data conversion from Intuit's ProSeries, MicroVision, Drake, Lacerte, IntelliTax. TaxWise, TaxWorks and others (see knowledge based area on the company's support page for a complete list).
The company also offers an add-on feature called WebSite Builder that allows its customers to seamlessly link their Web sites to client-centered content pages, or obtain a complete turnkey customized Web site with continuously updated financial content. This simple Web presence solution delivers benefits to ATX's customers' clients beyond what customers can effectively provide. ATX describes its online Financial Guidance Center as a "necessity for keeping current clients loyal and generating new clients."
TotalTax's visually pleasing Windows interface, and features like Start Link, plus ATX's association with Kleinrock's for tax research, make it easy to slash through a 1041. If you like entering data directly onto IRS forms and appreciate the benefits of integrating with accounting software, give TotalTax serious consideration.
By Alfred Charles Giovetti, CPA, ABA, ATA
ProSystem fx Gives Users the Ability to Custom Design the Tax Preparation Toolbar
Dynamic link with Microsoft Excel allows for the import and export of Schedule K-1 information
While Commerce Clearing House (CCH) expanded its ProSystem fx tax software into a complete professional office system, over the last several years, the star of the system is still ProSystem fx Tax, a powerful, flexible tax program designed for any professional, from the small sole proprietor to the largest multi-member firm.
The ProSystem fx Fiduciary Tax Return Service comes with an extensive instruction guide and several online tutorials. The system comes on a CD-ROM, plus a 3-inch floppy "permission diskette," which is necessary for installation. You can click a "Show Me" icon, and a multi-media presentation walks you through the installation process (should the installation confuse you). Unlike most tax packages, ProSystem fx converts your data from your previous tax software in-house--a data conversion CD is sent with the software eliminating the need to send your data by mail to a third party.
In the 2003 filing season, ProSystem fx introduced the Worksheet View to input data into the program, supplementing the interview style, input method. CCH believes that the new interface is easier to use and learn than the available systems. Worksheets, which should not be confused with spreadsheets, link to multiple fields in multiple forms. The links allow you to input the data once into a system organized by category, topics and sections rather than forms, thereby reducing the number of input screens. As with any input data, the actual forms still need to be manually reviewed to make sure the information is presented correctly.
ProSystem fx contains all the features you expect in a fiduciary package--all types of estates and trusts, allocation of deductions to the different classes of income, distribution of income based on amounts or a percentage, and several others. Unique to this product, however, is the ability to integrate with CCH's tax research through either the CD-ROM or Internet version. This integration is context-sensitive--pertinent tax research can be accessed while in ProSystem fx.
Tax research is not the only integration available. Since ProSystem fx is part of a complete office system, the program seamlessly integrates with all of CCH's other modules. In addition to the ability to import capital gain information from GainsKeeper, a dynamic link with...