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

Including items like the Daily Tax Report, the BNA Tax Management Library provides up-to-the-minute tax-related information in addition to comprehensive reference material for everything affecting taxes and tax planning. It is impressively organized so that virtually any information can be readily extracted.

BNA Tax Management

www.bnatax.com

800-372-1033

By Glenn Gordon

UltraTax Planner CS Calculates and Displays Tax Scenarios

The first UltraTax product was released in 1992. Planner CS is part of the UltraTax CS family, which is, in turn, a member of the CS Professional Suite of tax and accounting products.

Features

Install Planner CS from a CD-ROM or download it from the Creative Solutions Web site. After the program installation, the license must be installed, either by download or license diskette. Program updates (if any) can be downloaded after program startup. A PDF Getting Started Guide accessible from the help menu is a duplicate of the printed manual received with the application. Help topics are well-organized and provide thorough explanations of program operation.

After starting Planner CS, preparers need to be set up as a first step. In addition to the expected information, a number of preferences must be selected or the defaults accepted. These include the number of alternatives, number of years, first plan year and inflation percent. Although the alternatives, years and beginning year can be changed as you create a new plan for a client, it seems strange to allow preparer defaults for such plan dependent items to begin with.

After preparers, plans may be set up. A new plan may be created, an existing one opened or the trial plan provided with the program opened and examined. The "New" icon at the left end of the icon bar opens the New Plan window. There, a unique plan ID must be entered and a preparer selected. The starting year, number of alternatives and number of years can be changed from their defaults, with up to 50 alternatives and 100 years allowed.

Three options are available for the plan. The Family Plan selection refers to a special plan where the effects of investment income of minor children on the parents' and family's tax liability can be evaluated. The Annualized Plan choice is a single-year, four-period plan that calculates federal quarterly tax payments. For clients whose income varies during the year, different quarterly payment amounts may be set up. The Display single base-year selection changes the format of the display, placing the first plan year in a single column to the right of the field names. Calculated carryforward amounts from this base year column will carry forward to the subsequent plan years under each alternative.

After the client information is entered and accepted, calculations are performed, and the alternatives and years displayed. Displayed data corresponds to the selection made from a row of tabs running above the data area. These tabs change as selection is made from a row of large buttons immediately above the tabs, labeled Main, Income, Activities and Adjustments. Data fields are normally calculated but can be overridden by manually entering data if desired.

The Watch Window makes the implications of different tax alternatives easy to observe. Templates determine which lines appear in the current watch window, and the window can be hidden or resized as appropriate. Standard reports are available and customized reports can easily be made for special needs. Graphing capabilities in the program help communicate scenarios and recommendations, and the built-in word processor allows you to create professional-looking documents.

Planner CS imports client data directly from both UltraTax CS and GoSystem Tax applications and integrates with the entire CS Professional Suite to enable such functions as a paperless office.

Summary

The UltraTax Planner CS is a solid, well-documented planning solution capable of calculating and displaying a large number of tax scenarios. The availability of a number of related products with which it integrates makes it an attractive choice for tax professionals.

Thomson Creative Solutions

www.creativesolutions.thomson.com

800-968-8900

By Glenn Gordon

Lacerte Tax Planner Features Include a Watch List

The Lacerte Tax Planner is one of a number of tax products offered by Intuit under the Lacerte name. Users of the Lacerte Tax program can access the Tax Planner from the CD-ROM they already have.

For computer users without floppy drives, the update information can be downloaded directly from Lacerte. Application licensing may be done for unlimited in-house use or, alternatively, it can be used on a pay-per-plan basis. If the latter is chosen, data can be entered and saved, but no processing takes place until your computer connects to Lacerte through the company's Remote Entry Processing procedure. No plan data is transferred; only the taxpayer's name is forwarded and used for billing purposes.

Features

The Lacerte Tax Planner opens with a plan selection box offering paths to create a new plan, import a Lacerte Tax Client or open an existing plan. Choosing a new plan displays the plan information choices--where the heart of the application resides. Four tabs provide selection of Plan Options, Taxpayer and Spouse, Dependents, and Contact Information. Helpful explanations of the contents of each tab are readily available through help button on each tab window. The Plan Options tab opens up choices of Plan Type, Years and Cases, and State Information.

The Plan Type allows you to set up your choice of Case/Year Analysis, MFS/MFJ Comparison, Difference Analysis or Adjustment Analysis. The Case/Year Analysis projects tax results over the number of years you specify. You can create several scenarios (cases) for a given year to see which produces the lowest tax liability for that year. The MFS/MFJ Comparison displays tax results for two married taxpayers filing separately or jointly. In addition to the obvious value to married taxpayers, this selection provides a quick display of the effects of a divorce.

The Difference Analysis displays two cases with a third column showing the difference between the two for each row. The Adjustment Analysis displays three variations: a column with the original case, a second adjustment column in which you can enter changes to increase or decrease values in any row or rows, and the adjustment results column, where you see what your change or changes would make to the tax bottom line. In conjunction with the plan type, the beginning year, number of years and number of cases can be selected; up to 10 years and 10 cases may be entered--in most cases, this is far more than needed. For all plan types, a convenient multi-column sample display is updated as selections are made to show you how the results will appear.

To complete the plan information, entries under the Taxpayer and Spouse tab, and the Dependents tab, must be made. Accepting the plan information opens the main program screen and the display of cases and years (or related displays depending on plan type). Tabs across the top for summary, income, adjustments and other areas allow selection for display across the top of the screen, with Watch List and Diagnostics tabs anchoring a separate section on the bottom. Both sections are resizable to allow more of an area of interest to be displayed.

The Watch List is an interesting and useful feature. It includes all the years and cases columns displayed for the Summary and other tabs above, but allows the user to change the order in which the rows appear. For example, as you are looking at the cases, you may have a particular interest in observing how Adjusted Gross and Deductions change, and can place those columns at the top to view the immediate effects that data changes have. You can also add rows from a selection window or remove unneeded rows.

Summary

The Lacerte Tax Planner is a powerful tool to quickly set up scenarios and observe the resulting tax obligation changes. The large number of possible cases and years and the handy user-configurable Watch List make it especially flexible.

Lacerte Software Corporation

www.lacertesoftware.com

800-933-9999

By Glenn Gordon

TaxWorks' TaxPlanner a Fast, Straightforward Tool

A bowl of cherries graphic accompanied by a "Your business after using TaxWorks" tagline represents the approach TaxWorks takes toward making tax planning and preparation smoother and simpler. TaxWorks' TaxPlanner is a basic, yet powerful tax planning tool that incorporates the latest in tax law, simplifying "what if" tax scenarios for evaluation of effects on tax liability. It is provided on CD-ROM and integrates smoothly with the main TaxWorks tax program, automatically transferring client contents when TaxPlanner is opened.

Features

TaxPlanner's interface is simple and easy to understand. It consists of five side-by-side columns in which data for various tax scenarios can be entered--all placed in a non-resizable window occupying about one-third of the screen. "Year" and "Filing Status" boxes are placed at the head of each column. Any year can be entered for any column, with the filing status choices being Single, Joint, MFS Live Together, MFS Live Separately, Head of Household and Widow(er).

Existing projects may be opened to display current data or you can begin immediately entering data in any column. Data can be entered in only one column at a time, although the Tools pull-down menu allows copying data from any column to another column, as well as deleting all data in any column. To change any column data, click anywhere in the column, then click on any row heading such as Ordinary Income to open a worksheet window. Entering the worksheet data and closing the window transfers the data to the selected column and immediately displays the calculated results. The row headings are organized similarly to Federal Form 1040 for ease of access.

A Bridge icon triggers a function to copy required client information directly from the TaxWorks tax program when the appropriate path is entered. After using the program for a short time, it appears a helpful addition would be to allow data in a particular field (such as deductions, for example) to be copied to one or more columns so that its isolated effects could be immediately evaluated for several or all scenarios. As it is, changes, such as deductions, must be individually entered in each column unless one entire column is copied to another.

The user can click the U.S. map icon to open a generic state worksheet. Here state information can be entered, overriding federal information if desired. A handy calculator is available, made more useful by a Paste key that transfers the result to the selected planner data field. The user can also check a selection to automatically paste the result when the "=" key is pressed.

The Data pull-down menu allows firm and client data to be entered. Also available from the Data menu is the Preferences window, where the user selects an annual inflation rate factor, an interesting and useful feature. Inflation sensitive items such as EIC, Deductions and Exemptions are adjusted by the annual inflation rate factor.

Output from the application is simple to produce. A Print pull-down menu allows the main worksheet, PAL or AMT or all worksheets to be printed. A slick Create PDF choice under the File menu pull down quickly creates a PDF of client data for easy viewing or transmittal.

Application questions can be answered through a thorough help file included with the program. Although not likely to be required for the planner itself, TaxWorks "works" to keep the cherries fresh by providing live toll-free support for all its products.

Summary

TaxPlanner keeps things simple but produces speedy results for up to five tax scenarios. Its inflation adjuster and instant PDF creator are useful additions to the application.

TaxWorks

www.TaxWorks.com

800-843-1139

By Glenn Gordon