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Practitioners are increasingly relying on tax planning software to add value to their clients' preparation experience, and more software vendors are building planning functionality either into their tax prep programs or as stand-alone offerings.
"Tax planning is a smaller component of the larger picture of financial planning, which is a component of the larger picture of estate or retirement planning," said George Olavarrieta, senior product manager at San Diego-based Lacerte.
In addition to the simple "what if" scenarios that most vendors now include with their tax preparation software, many software companies have more powerful standalone programs that integrate with their other software and provide graphs and specialized reports. The Lacerte Tax Planner, introduced last year, was purchased by more than 6,000 preparers.
"We had very good feedback, and we're adding a number of things that preparers told us they'd like to see," said Olavarrieta. "We're looking at collecting and analyzing their needs to determine where we want to take it over the next few years."
The Lacerte Tax Planner integrates with Lacerte's individual tax program, enabling the preparer to transfer the client's tax data file into the planner. At that point, the preparer can run a year/case analysis, a filing status comparison, a difference analysis and an adjustment analysis.
BNA Software, based in Washington, D.C., sells its Income Tax Planner and Estate Tax Planner as stand-alone products. Its Income Tax Planner can import data seamlessly from tax compliance programs such as Lacerte, ProSystem fx and GoSystem. It calculates a wide variety of tax situations, including farm income averaging, self-employment and lumpsum taxes.
The planner provides federal and state income tax projections for...