Hard Look at Tax Software: 2004 Survey of New York State
Susan B. Anders and Carol M. Fischer
an expanded survey of New York State CPA firms, the authors
find a high level of satisfaction with tax software for the
third consecutive year. New ratings for entity tax preparation
software are similar to those for individual software for
the current and two prior years. New York State accountants
continue to embrace technology in their tax practices.
practice continues to evolve as professional accountants
incorporate technology into their practices to better serve
their clients. The third annual survey of New York State
practitioners was expanded in two respects:
The authors surveyed a larger number of local and regional
In addition to soliciting respondents’ ratings of
individual tax preparation and tax research software,
this year’s survey included questions on entity
tax preparation software.
study also obtained information about how tax practitioners
use Internet resources and develop their own websites to
better meet the needs of their clients. The survey was mailed
to approximately 500 New York State practitioners selected
from online listings and CPA directories. A total of 235
usable surveys (47% response rate) were returned and analyzed.
1 presents a profile of the respondents. This profile
demonstrates that most survey respondents would be characterized
as representing small to medium-sized firms, with a median
of 600 individual and 200 entity returns filed each year
by five full-time tax practitioners in a firm in which 50%
of the professional practice is in tax.
Tax Preparation Software
the third consecutive year, survey respondents rated the
individual tax preparation software used in their practices
quite favorably. Users ranked the vendors on a scale from
1 (very dissatisfied) to 5 (very satisfied). Important considerations
in choosing a tax software package or an online service
include cost, user friendliness, customer support, available
features, updates, state tax software, company reliability,
and user familiarity. The survey instrument listed 21 of
the most commonly used commercial tax return software vendors,
based on a review of print and electronic media.
were asked to write in the name of any package they used
that was not listed on the survey. All 235 respondents indicated
that they used at least one tax preparation software package.
Respondents reported using 12 of the 21 tax return software
companies; ratings for these 12 vendors are summarized in
some respondents used more than one software package, more
than 235 ratings were analyzed. On average, respondents
had been using their software package for more than 8 1/2
years. The average overall satisfaction rating for the 12
software packages rated by this year’s respondents
was 4.21, indicating that the average respondent was highly
satisfied. Consistent with previous years, the lowest overall
rated category was satisfaction with cost.
than 60% of the ratings received were for two software packages:
CCH ProSystem fx (89 ratings) and Lacerte Software (77 ratings).
These packages also received the two highest overall ratings
(4.35 for Lacerte; 4.32 for CCH ProSystem fx). Ratings of
individual features, also provided in Exhibit 2, are consistent
with overall ratings, suggesting that respondents were generally
satisfied with all aspects of the tax preparation software.
While some users were dissatisfied with cost, they were
generally very satisfied with features such as ease of use
and customer support. With few exceptions, the average ratings
of virtually all features for all software packages were
higher than 3.
other packages received 10 or more ratings: Creative Solutions
(38 ratings), Intuit ProSeries (28 ratings), and RIA GoSystem
(14 ratings). All three of these products earned relatively
high ratings. Because Accountants World, ATX Forms, Drake
Software, Laser Systems TaxWorks, Tax$imple, Turbo Tax,
and Universal Tax Wise were each evaluated by fewer than
10 users, the ratings for these vendors should be interpreted
the five packages rated by more than 10 survey respondents,
the ratings of individual dimensions and overall satisfaction
were remarkably similar to the ratings for these packages
in previous years. Exhibit
3 provides descriptive detail on the tax preparation
software users for the packages rated by more than 10 respondents.
While CCH ProSystem, Lacerte Software, and RIA GoSystem
were used by firms in all size categories, their respondents
represent some of the larger firms in the sample. Intuit
ProSeries and Creative Solutions were generally used by
firms preparing fewer returns, with fewer full-time tax
preparers, and with 25% or more of their practice in tax.
Tax Preparation Software
respondents were also asked to rate the entity tax preparation
software they used. This was a new line of questioning;
the survey instrument listed 22 of the most commonly used
tax return software vendors. Respondents were asked to write
in the name of any package they used that was not listed
on the survey. Most respondents indicated that they used
at least one entity tax preparation software package. More
than 87% of the respondents used the same vendor for both
individual and entity software, while 8% used different
vendors. Respondents reported using 15 different packages;
the ratings for these vendors are summarized in Exhibit
4. The discussion focuses on packages rated by 10 or
more respondents; although ratings for packages with fewer
than 10 users are reported, they should be interpreted with
to individual tax preparation software, respondents generally
rated themselves as being quite familiar with the entity
software, using a package for an average of 8.4 years. The
overall satisfaction rating of 4.18 is almost identical
to individual tax preparation software.
than 10 ratings were received for five different packages:
CCH ProSystem fx (83 ratings), Lacerte (74 ratings), Creative
Solutions (32 ratings), Intuit ProSeries (24 ratings), and
RIA GoSystem (14 ratings). As with the individual tax preparation
software, the top-rated vendor was Lacerte, with an overall
rating of 4.32, closely followed by CCH ProSystem fx at
4.28. The only package with an overall rating below 4.0
was Intuit ProSeries at 3.88. Ratings of individual dimensions
were generally quite favorable, with only cost receiving
average ratings below 4.0.
5 presents firm information for the entity tax preparation
software users for the packages rated by more than 10 respondents.
Creative Solutions and Intuit ProSeries software were used
almost exclusively by firms preparing fewer than 500 entity
returns and with fewer full-time tax preparers than the
others. CCH ProSystem and Lacerte software were used by
firms in all size categories. RIA GoSystem appears to be
used to a greater extent by larger firms.
study also asked whether practitioners used tax research
software to facilitate legal research. The survey instrument
listed nine of the most commonly used tax research software
vendors, based on a review of print and electronic media.
Respondents were asked to write in the name of any package
they used that was not listed on the survey. Most respondents
indicated that they used at least one tax research software
package, and many respondents used more than one package.
In total, 395 ratings were received for the nine vendors
6). CCH had the most users, at 96, followed by RIA,
BNA, Kleinrock, and PPC, all of which had more than 40 users,
and Tax Analysts with 12 users. The other three vendors
had fewer than 10 users; thus, their ratings should be interpreted
users ranked the vendors on a scale from 1 (very dissatisfied)
to 5 (very satisfied). The average overall rating for all
nine vendors was 3.79, compared to overall ratings in previous
surveys of 3.88 (2003) and 4.01 (2002). All of the average
ratings on individual dimensions exceeded 3, however, and
the average ratings for every individual dimension except
familiarity were the same or actually increased relative
to 2003. Most of the individual dimension ratings have slipped
somewhat from the original 2002 ratings, but the decline
is relatively small.
overall ratings for the vendors used by more than 10 respondents
were similar, ranging from the highest rated, PPC, at 3.87,
to CCH (which was rated first in 2003), with a rating of
3.76. While survey respondents are not as satisfied with
tax research software as they are with tax preparation software,
this may be due to the less-structured nature of the questions
that are addressed using tax research software, making it
generally more challenging to satisfactorily resolve issues
using this resource. In addition, firms are more likely
to use multiple tax research software packages than multiple
tax preparation packages.
may afford them a better opportunity to make direct comparisons
of the different features in the packages, or may preclude
their developing a greater familiarity with a particular
product. Use of multiple packages may also reflect users’
dissatisfaction with any single tax research software package
to meet all of their needs.
to the ratings from previous years, the overall satisfaction
ratings for the tax research software are more volatile.
This may be due in part to a large increase in the sample
size from 84 (2002) to 168 (2003) to 395 ratings (2004).
While only 8% to 9% of respondents indicated plans to switch
tax preparation software, 13% plan to change their tax research
7 provides descriptive detail on tax research software
users. The majority of the firms using the Tax Analysts
software prepared fewer than 500 tax returns and had fewer
than five full-time tax preparers; Tax Analysts had a larger
percentage of users with 75% or more of their practice in
tax than any other vendor. Kleinrock, PPC, and RIA were
used by firms in all size categories. Compared to other
vendors, BNA and CCH were used more often by larger firms,
as measured by both individual returns prepared and full-time
information on the software vendors included in the survey
can be found on their websites, listed in Exhibit
9 summarizes responses to survey questions related to
issues beyond the choice of tax return or tax research software.
For most questions, the 2004 survey results are similar
to those in 2003. While only 46% of the 2002 survey respondents
filed individual returns electronically, 64% of both the
2003 and 2004 respondents indicated that they filed individual
returns electronically. The percentage of respondents already
using an online organizer has remained relatively stable,
with 13% of respondents indicating that they did this in
2004; however, there has been a continued increase in respondents
planning to use one soon: 40% in 2004, as compared to 36%
in 2003 and 32% in 2002. Fewer tax practitioners express
an interest in processing returns via an application service
provider, and only 12% took advantage of this technology
in 2004. Many tax practitioners and their clients may still
have concerns about the degree of security provided by web-based
data transmittal and information processing.
majority of respondents purchased CD-ROM–based tax
research software in 2004, and an increased percentage of
respondents conducted tax research via a proprietary Internet
site. Most respondents have also developed their own websites
to better serve their clients. Exhibit
10 summarizes the extent to which New York practitioners
who responded to this survey use the Internet as a form
of outreach to clients and potential clients. The reasons
for creating a website have not changed much over the three
years of this survey, but the commitment to using firm websites
appears to be strong, as the majority of respondents use
the website for multiple purposes.
2004 survey respondents reported a high level of satisfaction
with both individual and entity tax preparation software.
Although ratings of tax research software have slipped somewhat,
respondents still rate these products relatively positively.
Survey participants also indicated a relatively high level
of reliance on the Internet in their tax practices, as well
as use of a firm website. While it is likely that computer-savvy
practitioners would be more inclined to respond to the survey,
a response rate of almost 50%, combined with a larger sample
size, provides evidence that New York State practitioners
are embracing technology to better meet the needs of their
clients and to position themselves for the future. For practitioners
considering tax preparation or research software, the ratings
provide valuable information on their colleagues’
B. Anders, PhD, CPA, is an associate professor, and
Carol M. Fischer, PhD, CPA, is a professor,
both at St. Bonaventure University, N.Y.
Note: The CPA Journal plans to continue
this annual survey of tax software. Vendors that would like
to participate and readers that have comments for the authors
can e-mail the editors at firstname.lastname@example.org
with “Tax Software” as a subject line.