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Nov 1993

Software programs to make a CPA's life easier. (includes related articles) (Software Review) (Evaluation)

by Mingelgreen, Mark S.

    Abstract- A review of software packages in the market reveals the best software instruments for CPAs involved in tax-planning and small-business services. Among those that received the highest five-disk rating include the payroll-processing and W-2 and 1099 generator AbraPay Payroll System by Abra Cadabra Software Inc; CPA Tickler Database by Front Row Systems; Tax Interest and File in Time both by Time Value Software; Brightridge Solutions Inc's Hi, Finance!; The King Financial Manager by King Financial Software Inc; R-Forms, R-Magnetic, SAR, E-Forms, Q-Forms and 1099R by Peak 1 Resources; T-Value by Time Value Software; Tax Tools by CFS Income Tax and EG Systems Inc's W-2/1099 Filer. Given a second-highest four-disk rating are Business Valuation with Ratios and Graphs by Innovative Professional Software Inc, Spokane Computer Inc's Mag-Filer and MultiCalc by PC Works. A directory of the software vendors are provided.

Much like a movie critic, the author has screened a number of tax software programs useful for matters other than preparation of tax returns. Here are the results.

The mission was simple. Search out computer software that would be helpful to CPAs involved in tax planning and small business activities. How were the programs found? I asked friends in the profession and looked at advertisements in trade publications. By and large, programs selected to be reviewed were those advertised during the fall of 1992 and winter of 1993. Although this method was hardly scientific, and will undoubtedly omit some excellent programs, I believe the programs reviewed do represent a cross section of the types of programs available to the CPA. With few exceptions, software packages commonly thought of as tax preparation programs (the Turbo-Taxes, Pencil Pushers, Lacertes, etc.) were not reviewed. These programs are reviewed annually in many professional journals, and I was looking for other computer programs a CPA would benefit from but did not know existed.

Each of the programs evaluated was given a rating of five disks to one disk. A five-disk program is one which can effectively produce results for a broad audience of CPAs, while a four-disk program is one that quite effectively performs a more narrow range of tasks. A program with a three-disk rating is a good program, but a better program of the same type is available. A three-disk program may be a good choice for the professional who may not need all the bells and whistles of a higher rated program. Programs that received a rating of two disks either had some type of quirk or anomaly (such as a needlessly complicated interface) that made it much harder to use than other programs of its type or were a niche program useful for only a select group. A one-disk rating was reserved for programs that did not function as advertised and represent programs that I would not suggest CPAs take the chance of using. They are not mentioned in this article. Because of space limitations, even all programs receiving a two-disk or greater rating could not be included. Programs in this category are listed in Exhibit 1.

All programs were reviewed on a 486sx 25 Mhz computer system with 8 Mb of RAM and a 170 Mb hard drive. MS-DOS 5.0 was its primary operating system and Microsoft Windows 3.1 was its primary operating environment. With the exception of those explicitly identified as Windows programs, they were run in a DOS window using the default DOS program PIF file found in Windows.

AbraPay Payroll System Abra Cadabra Software, Inc. Type: Payroll Processing, W-2 and 1099 Generator $1,495 (+$995 network, +$200 MICR encoding)

Abra Cadabra Software provided a demonstration copy of their high end payroll processing program for review that did not allow for printing of actual paychecks. However, I have no doubt the actual program prints checks as flawlessly as the rest of the program operates. The program comes with its own installation program that installed the program in its own subdirectory on the hard disk.

The AbraPay system is just one part of a series of human resource programs available from this publisher. These programs link together to form a set of programs that will serve the needs of any personnel office in a moderate to large size organization.

The AbraPay system produces computer generated checks (including MICR encoding with special toner cartridges), prints dual signatures on checks (talk about useless controls!), and can handle direct deposits to six different banking institutions. The program also produces 941's, W- 2's, and 1099's, but does not produce the 940 or state forms. The Federal and state tax tables in the program are user-upgradeable, but an update and support package is available, at extra cost, from the publisher. The program also supports magnetic media filing for both W- 2's and 1099's, has a pop-up calculator and easily handles retroactive pay increases. Payroll data is kept in the popular dBase format so the data can be exported to many database and spreadsheet programs.

This program appears geared to a large company's payroll processing needs rather than those of the CPA who handles a small payroll, or generates W-2's and 1099's, for payroll payments made from other sources. However, the program can handle more than one company at a time, and there is no limit to the number of companies that can be set up in the program (assuming you have enough disk space). Therefore, the program is suitable for service bureau use and should be considered by the CPA considering going into the payroll processing business.

Business Valuation with Ratios & Graphs Innovative Professional Software, Inc. Type: Business Valuations $195

Business Valuation with Ratios & Graphs (BVRG) is available as either a stand alone program (a compiled spreadsheet) or as a spreadsheet template for Lotus 1-2-3 and Quattro Pro. Although the publisher recommends using the Lotus version if you own a compatible spreadsheet (so you can modify any formulas used in its calculations), I tested the compiled version. The program loads with its own installation program but would not run in Windows.

BVRG computes the value of a business using seven different methods: 1) capitalization of earnings, 2) excess earnings, 3) dividend paying capacity, 4) multiple of gross revenue, 5) multiple of earnings stream, 6) future earnings, and 7) future cash flow. The program will also calculate the value of a minority interest in the business if you specify a percentage of ownership less than 50%. In these cases, you will be prompted to enter a premium or discount factor to take into account lack of control, amount of diversification, lack of marketability, and liquidation expense factors inherent in valuing a minority interest.

The user of the program enters the company's income statements and balance sheets (for up to the last five years) into the spreadsheet and then enters any adjustments needed to make the company's data comparable to others in the same business. These adjustments are necessary to account for differences in accounting policies, extraordinary and non- recurring items, and adjustments for certain discretionary items. After picking one of the seven methods to use for valuing the business, the user is prompted for additional input items such as earnings rates, capitalization rates, dividend paying capacity, dividend rates, etc. The program then computes the value of the business.

BVRG is geared towards those who already know something about valuing a business. The user has to make numerous assumptions when inputting data, and if these assumptions are not valid, the output will be useless. To help those without an understanding of business valuation techniques, the publishers also offer for sale five texts on the topic.

This program would be an asset to anyone who values businesses on a regular basis.

CPA Tickler Database Front Row Systems Type: Tax Tickler Single User Version $259, Multi-User Version $359, Tickler For Lotus $89

CPA Tickler Database is an excellent tax tickler system that, surprisingly, was the one program reviewed that did not have its own installation program. Installation required using the DOS copy command to copy files from two floppy disks to the users hard drive and then decompressing one file using the popular PKZip and PKUnzip programs supplied with the software.

As with all programs of this type, CPA Tickler Database consists of two different databases, one containing clients and the other containing events that need to be tracked. The two databases are then linked together forming what is known as a relational database.

The program is written using Borland's Paradox v. 3.5 to take advantage of Paradox's "Query by Example" capabilities. Although the program comes with over 40 different reports pre-formatted, reports may be formatted using any one or any set of characteristics defined in the database.

The program's one real weakness is the user cannot change the field names used in the database. This is a disadvantage if a user wanted to assign two partners to a single client, since there is only one field assigned for a partner's name. The other partner would have to be put into the manager's spot. This weakness might be one that can be worked around as Front Row Systems will make custom changes to the program for an extra charge.

Otherwise, CPA Tickler Database offers virtually everything the CPA could want in a tickler system. It imports Lotus 1-2-3, ASCII, and dBase files, and Front Row Systems offers conversion services for other formats. It allows an unlimited number of events to be associated with each client and permits copying of events from one client to another, easing the amount of input needed. Upon putting a return on extension, the program automatically rolls the event to the next year and adds the extended event to the database.

Product support is free for 90 days, after which it costs TABULAR DATA OMITTED $20 per ten minutes. In the alternative, users can opt for an annual support package for $50. You probably won't need the support, the program is that easy to use.

File in Time Time Value Software Type: Tax Tickler $199

File in Time is the new tax tickler system brought out by the makers of T-Value and Tax Interest, two well known programs. This is an impressive product most, if not all, CPA firms will be able to use right out of the box (or, at least as fast as they can import their existing data). To help users get familiar with the product, Time Value Software includes an on-line tutorial.

To avoid re-entering data already on another tickler system, the program imports data from ASCII text files, CR-delimited files, comma and " "- delimited files, and comma-delimited files. The program will also export to those formats. What is missing, however, is a direct import from Lotus files. This can be worked around by exporting the Lotus file in a comma-delimited format and then importing the data into File in Time.

The program allows entering a target date in addition to a due date for each return being tracked. In addition, up to seven lines of notes can be added to each item in the database. The program requires one key default person to be assigned to each taxpayer, but up to four other people can also be associated.

When setting up the database of events to be tracked, the program first requires the user to add the taxpayers to the system. Then the events to be tracked, called "services" in this program, are added to the database and associated with each taxpayer. A tremendous amount of services are already included in the program, but others can be entered as you need them.

In addition to tracking specific services related to each taxpayer, the program's database provides for the following fields: firm contact, phone1, phone2, fax, reference or file #, month of year-end, type, Federal ID #, state ID #, default key person, four employee fields, salutation, and address.

Hi, Finance! Brightridge Solutions, Inc. Type: Utilities $59

Hi, Finance! is the only true Window's program reviewed here. It is also the only reviewed program marketed under the shareware concept. A shareware program is one that can be tried for a certain period of time. If the user likes the program and wants to continue using it, he or she is supposed to pay a fee and register the program with the author/publisher. This registration is on the honor system. However, continued use without registration is in violation of U.S. copyright laws. As a shareware program, this product can be downloaded from many bulletin boards (such as CompuServe, Prodigy, and America On-Line), and, as is also true of most shareware programs, Hi, Finance!'s manual is on- disk to be printed out. On-line help is basically the program's manual in a hyper-text format.

The program's installation method is a little strange. The compressed files are expanded into a temporary directory, and the included installation program installs the program into another directory. The temporary directory can then be deleted.

There are six modules in the program. The first is a financial calculator that computes present and future values of a lump sum or an annuity. Module 2 is a loan calculation and amortization program that handles loans with varying interest rates or varying payments fairly easily. The 3rd module is an investment analysis program that computes net present value, internal rate of return, payback ratio, and a profitability index. The 4th module is a random number generator. Module 5 is known as the business assistant. It calculates product markups, gross price margin, sales tax, break-even analysis, and economic order quality. These five modules are worth the price of the product even if you never use the sixth module.

The sixth module is the personal financial planning module. In this module you enter future cash needs, existing resources, and financial objectives. The product takes into account the time value of money, estimates of appreciation and inflation rates, and estimates of the asset's earnings to determine whether objectives will be met. If not, the program determines the shortfall. As an added bonus, the program creates many graphs to illustrate the results of its calculations. Although this module appears to offer the most, I found it to be the most confusing.

Since this is a shareware product, there is no reason it should not, at least, be tried. Windows users will find Hi, Finance! a valuable addition to their software library.

The King Financial Manager King Financial Software, Inc. Type: Financial management tools for corporate management $149 for single user version ($179 for single location use, $209 unlimited usage license)

The King Financial Manager is a set of financial tools probably more useful to the controller or VP of Finance of a business concern than the practicing CPA. It would be especially useful in the smaller company where in-house accounting software or accounting staff does not ordinarily prepare the in-depth analyses that of which the program is capable. Another good use of the program is in preparing estimates and projections to be used in a business plan.

The program is available as either a Lotus 1-2-3 template or a stand alone compiled program. The Lotus template ran smoothly, even though it was imported into Excel and ran it through Windows. One fault with the program is that it is formatted to be used with Lotus 1-2-3 v. 2.2 w/Always rather than newer v. 2.3 or 2.4, which use WYSIWYG. Excel does not support Always formatted files, so I had some printing problems.

The four modules contained in the program are: 1) Ratio/Calc Manager, that computes 23 financial ratios, loan payments, four depreciation types, present and future values, loan amortization, and net present values of five different cash flows; 2) Cash Flow Manager, to help with completion of a twelve-month cash-flow summary, monthly working capital needs schedules, debt service schedules, and monthly cash requirements schedules; 3) Investment Manager that looks at lease v. buy alternatives using the NPV of alternative cash flows and calculates IRR, internal interest charges, MACRS depreciation, and NPV of cash flows; and, (4) Break Even Manager that calculates the break-even point (in both units and dollars) for up to 10 products or product lines.

The investment-analysis module was more complicated to use than the other modules. The program's documentation is good and is totally menu driven.

Mag-Filer Spokane Computer, Inc. Type: Magnetic Media Filing Program for W-2's and 1099's $149

Mag-Filer is a program used for preparation of magnetic media payroll and 1099 information that can be sent to the IRS and Social Security Administration and any state that allows electronic filing. The program will also print 1099's and W-2's to laser printers (tax font cartridge not needed) or to pre-printed forms on dot-matrix printers. Since the program imports and exports data to and from almost any accounting package, much of the data entry expected in a program of this type is eliminated.

This program is a good choice for a company that needs to file magnetically, but whose accounting package does not support magnetic media filing. It would also be an excellent choice for anyone thinking of setting up a service bureau to transmit magnetically for other companies.

Finally, the publisher advertises that the IRS uses it for their own magnetic media filing needs.

MultiCalc PC Works Type: Utilities $149

MultiCalc is a financial utility program that holds a unique advantage over all the other reviewed financial calculation programs. It is the only one that can be installed as a memory resident program (as an alternative to installing it as a standard DOS program) that allows it to "pop-up" over other DOS programs when the Alt-F10 key combination is pressed.

The program consists of seven modules, all of which are useful. The loan-calculation program handles loans where the interest-rate adjusts (ARMs), the Rule of 78's, interest-only payments, and growing equity mortgages in addition to what would be considered normal loan calculations. The program excels at working with multiple-phase loans. The lease calculation program does calculations using six different types of leases while the depreciation module computes depreciation using straight line, declining balance, some-of-the-year's digits, units of production, ACRS, alternative ACRS, MACRS and alternative MACRS methods.

The finance module computes present and future values of a lump-sum and annuity, sinking funds, net present values, modified net present values, and profitability indexes. A bond module computes values at maturity of standard interest bearing bonds and zero coupon bonds.

The two remaining modules include a statistics module that computes the mean, variance, and standard deviation of a series and does linear and multiple regression analysis and a payment recording module that keeps track of the timeliness of payments under a loan. This latter module can also print a payment book for a loan producing three coupons per 8 1/2 x 11 inch page.

The program does not support a mouse and has only two color schemes available. The loan amortization program produces more columns than can be shown on the screen at one time that causes users to have to scroll right and left to view the entire schedule. The context sensitive, on- screen help is good.

R-Forms, R-Magnetic, SAR, E-Forms, Q-Forms, 1099R Peak 1 Resources Type: Retirement Plan Reporting and Administration R-Forms $575; R-Magnetic $75; SAR $195; E-Forms $395; Q-Forms $695

Of all the programs reviewed for this article, these were some of the best. This series of programs provide a complete software library for those who deal with employee benefit plans on a regular basis.

R-Forms takes care of preparation of 5500 series and 990 series forms (5500, 5500 C/R, 5500 EZ, the 5500 schedules, 990, 990-T, and appropriate extensions). SAR is used to prepare summary annual reports and disclosure notices based on data entered or a 5500 prepared by R- Forms. R-Magnetic allows for filing of the 5500 series forms magnetically. E-Forms is used for preparation of the 990 and 990-T (which are also in the R-Form package) as well as the 990-PF and 990-EZ. Q-Forms is used to prepare various forms needed to qualify or terminate a plan, while 1099-R is used to prepare and file forms 1096, 1099-R, and 4804.

The programs install easily with their own installation program. Using the programs may be even easier than installing them. The user-interface is exceptional. Facsimiles of the forms are shown on-screen, and the user fills in the blanks. Pressing F1 while in any blank field brings up the IRS instructions for that line, pressing F3 brings up the product's own excellent, hyper-text based, help system.

The software allows for entry of default items that will print on every return prepared and supports a mouse. This program should be used by anyone preparing more than a handful of these types of returns.

T-Value Time Value Software Type: Utility $129

Perhaps the best known of loan amortization/time value of money programs, T-Value is now at version 3.11, and is still one of the best programs available at what it does.

T-Value computes normal, US Rule and Rule of 78s loan amortizations. The program also handles loans where payments are skipped and ARM loans. Among other things T-Value can do is give the value of a loan at any point in the pay-off schedule, compute mortgage yield assuming a prepayment and original issue discount on below market rate yields.

This program has some faults. For example, the input necessary to compute the payment schedule on an ARM is not as easy as it should be. However, the manual is excellent, and if you are willing to invest some time learning the program, you will find it can do almost anything you want it to do.

Tax Interest Time Value Software Type: Interest and Penalty Calculator $249

No doubt about it, this is the premier interest and penalty calculator available. In addition to calculating interest on Federal over and underpayments, the program also calculates interest for the following states: Alabama, California, Georgia, Idaho, Illinois, Indiana, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, New York, and Virginia.

The program does not calculate any state tax penalties. It calculates all Federal penalties, including failure to file a return when due, failure to pay tax shown on return, failure to pay assessment, negligence, fraud, valuation overstatement of income tax, valuation understatement of estate and gift tax, interest on large corporate underpayment, and substantial understatement of income tax. These penalties can be referred to either by name or by IRC section. As an added bonus, the manual is detailed enough to be used as a basic primer on Federal tax penalty rules and regulations.

This program should be used not only for computing interest that may be due on an amended or extended return, but also to check the IRS's or a state's calculations on notices and assessments.

Tax Tools CFS Income Tax Type: Utilities $179

Tax Tools is a set of approximately 20 utilities, about half of which are useful to have available at a push of a few keys. Among modules included in this package are 1) Lump-sum distribution calculator that computes Federal taxes due on account of a lump sum distribution; 2) Net-operating loss that computes the amount of net operating loss an individual can carry back from one year to another; 3) minimum distribution from an IRA that computes the minimum amount that must be distributed from an IRA; 4) tax benefit rule calculator for state and local tax refunds that duplicates the worksheet in the 1040 instruction guide for computing the taxable portion of a state or local tax refund; 5) tax deferred exchange calculator that was confusing to use, but does an adequate job; 6) payroll withholding calculator that computes Federal withholding only, it gives net pay if you provide gross, pay period, filing status and number of exemptions claimed; 7) after-tax yield calculator that was quick and easy to use and can also be used to compute effective tax rates; 8) a 1040-ES generator that allows for printing of 1040-ES vouchers, a convenience when preprinted vouchers are not available; 9) an extension generator that prints filled out extensions; 10) a filing status and dependent determination program in which answers to yes or no questions help the program determine whether someone is eligible to be taken as a dependent on a tax return; 11) an IRA distribution calculator that determines the taxable distribution from an IRA if the account includes both deductible and non-deductible contributions; 12) power-of-attorney generator that allows for input of information to print a completed power of attorney form; 13) a change of address form printer that allows for input of information to print a completed IRS approved change of address form; 14) a fast, full-featured financial calculator that computes loan amortizations and present and future values; 15) a very basic projection program (all AMT calculations must be done manually) that supports Federal and California tax calculations; 16) an income statement and net worth statement generator for printing those statements; and 17) a refinancing analysis program to calculate the break-even point where it becomes advantageous to refinance a loan.

A laser printer is necessary to print all actual tax forms produced by the program. Laser printers with and without tax font cartridges are supported.

W-2/1099 Filer EG Systems, Inc. Type: Payroll Processing $89 (+ $40-100 for laser engine, depending on forms required, +$25 for multi-user version)

W-2/1099 Filer is a full function W-2 and 1099 preparation program suitable for both businesses and CPA-practitioners. The program has an option that allows for batch processing (the ability to switch from payer to payer) that makes it especially useful for someone processing payroll for more than one entity at a time.

When the program is first started (and, by the way, it was the only DOS program reviewed that included a program icon for Windows users) the user can print out the program's documentation, set up preparer and magnetic media transmittal options and select the printers to be used with the program. The documentation should be printed, as it is not supplied in any other form.

W-2/1099 Filer includes many niceties you come to expect with programs costing much more. Among these are on-line context-sensitive help, dBase III compatible files, a pop-up calculator that can paste the result into a program field, and the ability to shell out to DOS from within the program. It can carryover data from one year to another, and to let the program automatically compute FICA and Medicare withholding amounts from previously entered Social Security income. W-2/1099 Filer also includes a handy net payroll calculator that will calculate Federal, state and city withholdings when you input gross wages, exemptions and marital status.

Mark S. Minglegreen, CPA, is a business manager with Peyser & Alexander Management, Inc., a firm which manages high-net-worth individuals and their corporations.


Abra Cadabra Software 5565 9th Street North St Petersburg, FL 33703 (813) 525-4400

Brightridge Solutions, Inc. 1534 Brightridge Drive Kingsport, TN 37664 (800) 241-7203

Business and Accounting Software Systems, Inc. PO Box 1444 Vail, CO 81658-1444 (800) 748-1964

CFS Income Tax 883 Los Angeles Avenue Simi Valley, CA 93065 (805) 522- 1157

Denver Tax Software, Inc. PO Box 8379 Denver, CO 80201-8379 (303) 292- 6686

EG Systems, Inc. 163 Third Avenue, Suite 200 New York, NY 10003 (212) 265-9622

Front Row Systems, Inc. PO Box 550346 3033 Maple Drive Atlanta, GA 30355 (404) 231-1120

Heizer Software 1941 Oak Park Boulevard, Suite 30 PO Box 232019 Pleasant Hill, CA 94523 (510) 943-7667

Innovative Professional Software, Inc. 7140 East Heritage Place North Englewood, CO 80111 (303) 220-5730

Intex Solutions, Inc. 35 Highland Circle Needham, MA 02194 (617) 449- 6222

King Financial Software, Inc. 6006 Raleigh Drive Garland, TX 75044 (214) 414-4287

PC Works, Inc. 801 Madrid Street, Suite 105 Coral Gables, FL 33134 (800) 262-6890

Peak 1 Resources, Inc. 10394 West Chatfield Avenue, Suite 108 Littleton, CO 80127 (303) 933-1000

Phoenix Phive Software Corporation 7830 East Gelding Drive, Suite 400 Scottsdale, AZ 85260 (800) 331-1811

Prentice Hall Professional Software PO BOX 723597 Atlanta, GA 31139 (800) 241-3306

Spokane Software, Inc. 915 West Second Avenue Spokane, WA 99204-1598 (509) 624-4248

Time Value Software 4 Jenner Street, Suite 100 Irvine, CA 92718 (714) 727-1800


The Revenue Reconciliation Act of 1993 (the Act) offers a tremendous opportunity to provide additional tax-planning services to clients. Part of this opportunity can be attributed to the political hoopla that came with the passage of Clinton's deficit reduction package. People have been leery of the new plan since Senator Robert Dole warned during his speech on the floor of the Senate prior to the final vote to "put down your VCR remote and hold on to your wallet!"

Although the Act is by no means a step towards simplification, it builds on the existing calculation framework. Therefore, the Act's changes have been quick to integrate. As you recall, we waited a rather long time for reliable software following the enactment of the Tax Reform Act of 1986.

Whether you prefer to use a stand-alone package or tax-planning software, you should focus on how the following changes are addressed.

* New regular tax rates including the 39.6% surtax;

* New alternative minimum tax rates and exemptions. Specifically, the increase in the Alternative Minimum Tax (AMT) rate to 26% from 24% for amounts of $175,000 or less, and 28% for amounts higher than $175,000 and the inclusion of the new AMT exemptions;

* The permanent phaseout of personal exemptions;

* The permanent phaseout of itemized deductions;

* The calculation of the Medicare portion of the self-employment tax without any income limits, beginning in 1994;

* Increase to 85% of the portion of Social Security benefits included in income over certain thresholds effective in 1994;

* Computation of net investment income with new rules for capital gain income, including the election to optimize the investment interest expense deduction;

* The deductibility of moving expenses "above the line" in years starting after 1993;

* Reinstatement of the deductibility of the self-employment health insurance deduction for 1992 and 1993;

* Separate computation of AMT charitable contribution limitations and passive activity real estate allowance with election to use AGI computed on an AMT basis;

* Election to compute 1993 estimated tax payments and penalty without regard to 1993 increases;

* Ability to isolate the increase in 1993 tax and to elect to pay it in installments of 1/3 in April of 1994, 1995, and 1996 (Note: this change does not apply to the AMT or the taxation of estates and trusts);

* Computation of losses from Material Participation Rental Real Estate Activities for "qualified real estate professionals," specifically the relief from the passive loss rules, effective in 1994;

* Introduction of simplified estimated tax rules for 1994; and

* Increases in the earned income credit for 1994.

Please recognize that many states, as a matter of tax law, conform to the Federal rules and others do not. It is important to address the integration of the state impact of the new tax law as well.

Several software companies have announced the release of revisions to their tax-planning software to include the changes from the Act. This list will undoubtedly increase--we urge you to contact the software house of your choice for further information.

Many tax-preparation packages provide the opportunity to purchase a tax- practice-management utility which isolates the names from your database of clients which will be affected by certain measures in this tax bill (i.e., self-employed taxpayers and taxpayers subject to tax on their Social Security income). These packages also frequently include a simple mail-merge utility with the ability to tailor a tax-planning letter to your clients. Such a module can be very helpful in contacting your clients.


Customers of both CLR Fast-Tax and CCH Computax can produce fixed reports that use their 1992 client data to run projections under 1993 and 1994 law. In this way, taxpayers can be shown how the changes affect them personally. Although the new provisions are included, real estate professionals are not recognized. Therefore, passive losses will be calculated as in 1992.

Fast-Tax's Tax Outlook produces a three-column white-paper report comparing 1992 (as filed), 1993, and 1994 (per final bill). Computax's Tax Reform Projector shows historical 1992 amounts in one column and projected amounts in another, in which you may include or suppress particular 1993 or 1994 tax act provisions. Computax also prints the tax reform computation on 1992 IRS forms (marked "do not file--for projection purposes only"). Both vendors provide analyses of the differences caused by tax reform and identify the new law provisions causing each change. State calculations are not provided.

1992 data is generally used with no changes. For example, depreciation is deducted for assets that became fully depreciated in 1992, and non- recurring items (like moving expenses or capital gains) which appeared in 1992 will again be included in the projections. You could modify your 1992 database before running the reports, but this may cause errors in amounts carried to 1993 returns. Computax provides for entry of an overall increase or decrease in projected income.

Customers who use Computax's in-house system license the software and produce these reports themselves. Those who use Computax production facilities (by on-line connection or by submitting input forms) may have them run by the vendor. Fast-Tax also offers both in-house and off-site production options (the latter is available to customers who archived 1992 data to Fast-Tax).

Each product is marketed with extra services. For example, Computax's Tax Reform Projector provides personalized transmittal letters for sending the report to clients. Fast-Tax's Tax Outlook includes a fully word-searchable electronic version of the actual law, to aid in researching tax reform issues.

In addition to these reports, both vendors have products that allow changing assumptions and performing more detailed planning. Fast-Tax supports customized planning by providing an electronic bridge that lets the user link client information to BNA's Income Tax Spreadsheet. BNA licensees may then run tax projection alternatives in that program (which contains complete calculations for all states and some common resident/nonresident combinations).

Computax's stand-alone AccuPlanner, which can be licensed by practitioners that are not Computax customers, allows entry of data to project 1993 and 1994 tax under the new law. In-house (or OFX) Computax customers can import 1992 client data to reduce data entry. AccuPlanner creates up to 26 scenarios and will print Federal estimated tax vouchers. Users may enter adjustments to the Federal amounts to project state taxes. Computax has pre-set all adjustments for the 14 states that have AGI-based systems, and also provides a complete California projection. While not as comprehensive as BNA's Income Tax Spreadsheet, AccuPlanner is considerably less expensive.

Customers of either company develop databases containing a wealth of client information that may be searched for potential practice development opportunities created by the new tax law. Fast-Tax's Tax Query allows users to set parameters to drive a custom search of their client's data. Computax's Client Analyzer will scan your 1992 return data and list your clients that claimed the deduction for self-employed health insurance, so you can contact them about possible amended returns.


Income Tax Spreadsheet Bureau of National Affairs (BNA)-- 1231 25th Street N.W. Washington, D.C. 20037 800-372-1033 $495 Federal calculations only $890 with 50 state planner

Digitax Planner Digitax, Inc. 30001 S. State Street Ann Arbor, MI 48108 800-DIGITAX

Tax Answer Independent Preparer Services, Inc. 5115 Douglas Fir, Suite H Calabass, CA 91302-1441

Plan 1040 Prentice Hall Professional Software PO BOX 723597 Atlanta, GA 31139 (800) 241-3306 $425

Planmode Sawhney Software 285 Highway 18 East Brunswick, NJ 08816 908- 613-8700

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