Look for depth, breadth of information in tax planning software.

As the recent hurricane devastation reminded us, careful planning to anticipate natural disaster scenarios is very wise ... and very difficult.

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While you are not really making life and death choices, tax planning nevertheless has to take into consideration a wide range of factors of varying certainty in assisting clients to make wise tax-related decisions. Fortunately, the tax planning solutions reviewed here allow all that can be foreseen to be used as factors in quickly creating a large number of tax scenarios for consideration.

All programs operate in a similar fashion, allowing a number of different sets of circumstances to be projected over any number of years, with a variety of display choices available for viewing the result. The maximum number of cases and years varies from adequate to seemingly ridiculous but, depending on your situation, may be a factor in deciding what to buy. Various methods to simplify and personalize the resulting information display may also be a consideration in your decision.

As with any sort of activity that attempts to anticipate the future, tax planning efforts and their results are no better than the underlying assumptions used in formulating the plan. With the complexity of current tax code and no improvement in sight, a good tax library may be an investment that quickly pays for itself to create realistic tax scenarios for evaluation. However, it can't be expected to be of equal value to all potential users.

Other similar resources you may already have and the frequency with which tax questions have arisen in the past may help to make a purchase decision. In making that judgment, however, the depth and the breadth of the information included shouldn't be ignored. In addition to the practical analysis and examples that a good library should include to complement the tax code itself, there may be tools and sample documents that are valuable to assist a small practice in its growth process. A trial subscription is a good way to assess how useful it will be to your practice.

--Glenn Gordon

BNA Income Tax Planner Offers Multiple Analysis Modes

The BNA Income Tax Planner is a software application allowing limitless projections and scenarios regarding factors affecting income tax liability. An optional 50-state planner calculates resident income taxes for all states--including New York City and the District of Columbia--and also covers non-resident taxes for 28 states.

Features

The main screen consists of the normal pull-down menus and iconic toolbar to open appropriate worksheets. The total list of available worksheets can be displayed in a panel at left or right or hidden from view until needed. The main worksheet, always active since it is the bottom line for all scenarios, is a summary list of filing status, personal exemptions, income and other factors, ending in total net tax liability. Open worksheets appear as tabs across the top until they are selected for viewing, forming multiple rows if necessary. Worksheets may be tiled or cascaded for convenient viewing.

An assumptions selection in the pull-down menu row allows the user to choose the assumptions that underlie the tax planning analysis--revealing where the real power of the application resides. You may select a "Years within Cases" analysis, allowing one or more cases within one or more years, or "Cases within Years" to postulate multiple scenarios in a given year. The user can utilize up to 20 columns (years, cases or a combination of the two). The mixture is determined by entries on the assumptions screen.

Or, instead of years and cases, an "Adjustment" selection can be made, causing Original, Adjustment and Adjusted columns to be displayed in the analysis. Changing any entry or entries in the Adjustment column displays the modified results in the Adjusted column. Still another choice, the Difference analysis, produces Original, Adjusted and Difference columns, and displays the difference between the two scenarios on a year-by-year basis.

A Taxpayer and Spouse selection displays the effects of a married couple filing separately or jointly. This choice is also quite useful in analyzing the tax effects of a divorce. The final choice, "Minor Child," evaluates the effects of investment income of minor children on the parents' and family's tax liability. The assumptions box allows the default resident state chosen at installation time to be changed, and you can choose to save any set of choices in the assumptions box by making it the default selection. The program also offers annualization analysis, a popular feature allowing users to prepare estimated taxes.

Several features make the application easy to use. Any column of any worksheet may be protected from change by clicking a lock icon. You also may quickly create an automatic copy of any selection within a case, the same year or all columns.

A Graph selection provides a multicolor display of income distribution in either bar, line or area graphs, with choices of 11 data selections to be displayed, plus four user-defined data selections that can be drawn from any row of any worksheet. Graphs and reports can be distributed in print and PDF formats. A client letter selection opens a small word-processing window where information specific to the client can be entered. You may also create a more general letter and save as a template for re-use. Amounts from the worksheet are dynamically linked to the client letter, and the letter is automatically saved as part of the client file.

Application help is extensive, including context-sensitive messages for all commands and procedures, and fully-indexed user and tax reference manuals. A separate user and reference manual is provided for the 50-state planner.

Summary

The BNA Income Tax Planner is an extremely powerful, yet easy-to-use tool for quickly setting up a wide range of tax circumstances for quick analysis. The multiple modes of analysis permit the creation of virtually any set of circumstances.

BNA Software

www.bnasoftware.com

800-424-2938

By Glenn Gordon

BNA Tax Management Library Includes Daily Tax Report

BNA has published regulatory and compliance information for more than 70 years, so it is no surprise that in addition to its tax software products, it also has an extensive library of tax-related information applicable to tax planning. According to BNA, it has drawn on the insights and expertise of 1000+ of the world's leading tax experts to create and maintain this library. The library is available in print, CD-ROM or online, although the Tax Practice portion is only available by CD or online. Subscription is on an annual basis, but a trial subscription is also available. The following review was based on access to the online product.

Features

As might be expected, the Tax Management Library contains an overwhelming amount of information. Fortunately, BNA recognized that the issue is generally not whether a specific piece of tax information is there, but whether you can find it when you need it. Consequently, the site has not only been logically organized, but furnished with extensive tools to assist you in getting at the specific information you need.

The home page is broken into three main sections: Federal/Foreign Tax Library at the top, State Tax Library below and a navigation section along the left side. The new user may want to be brought up to date as a first step, and two navigation links accomplish that task. First, a What's New link displays an amazingly long list of new and revised federal/foreign portfolios, updated tax practice series chapters and updated state portfolios. Second, the Daily Tax Report provides a summary of tax-related news from the United States and around the world, and to show the detail that went into its preparation, an extensive table of contents for this section alone is included.

To understand how to use the library, two printable user's guides are available, a 7-page quick reference guide and a 116-page in-depth user's guide. A library tour demo is also provided online.

Perhaps as important as the primary regulatory source material is the practical analysis and examples that are provided to clarify tax issues. They appear as portfolios, explaining in relatively simple terms such topics as the tax effects of selecting an accounting method, and cover almost any conceivable area of tax interest. For example, more than 75 portfolios cover estates, gifts and trust planning alone.

The value of the library is also enhanced by including a large number of productivity tools. Sample wills and trusts, client letters and election statements, and sample filled-in forms along with tables, charts and lists can save significant amounts of time and money. A federal tax calendar is a handy tool that can be quickly brought up to review filing deadlines and other tasks.

Users will generally approach the library using one of two methods. You might prefer to go directly to some IRS code or document or a specific Treasury regulation. To do so, click the Go To link at the top of the navigation section and review a list of Go To boxes. Filling in the appropriate box for the IRS code, Treasury regulation, Treasury decision or IRS document number will take you directly to the primary source. Or you might start your research in the portfolio or tax practice analysis, and use the copious embedded links to go to the specific code or regulation that applies to your area of interest. If all else fails, use the excellent search facility to arrive at the topic you need.

Summary