However, using e-file required purchasing the necessary computers and many skeptical tax preparers were slow to adopt it. In , the IRS expanded the e-file service nationwide; that year, 4. In addition, large national tax-preparer companies started using e-file. Having large tax companies agree to use e-file eliminated many doubts among smaller tax companies and sped up the e-file adoption process.
Through the s and early s, Telefile was used to file EZ returns - this was done over the telephone. In , the IRS added an option to use a PIN instead of a signature when preparing taxes, thus completely eliminating the need to use paper during the process.
This made e-filing free for certain taxpayers who met different criteria income, filing status, etc. Businesses have also embraced the benefits of e-file. In , the IRS e-file system added Forms and , which allow companies to file employment as well as annual tax returns. Modernized e-File or MeF made its debut in which was seen as the next generation of electronic filing. By , Half of all tax returns were filed using the e-file system and the Telefile system was retired.
Congress made it mandatory for tax preparers who file 10 or more individual income tax returns to file electronically in In , the IRS ceased mailing out copies of that year's Form learn about the history of Form and has instead made them available online. In , e-filed returns hit the threshold of million returns. See how electronic tax filing has grown. As each generation of U.
Citizens become more confident in online tax preparation platforms, e-file has proven to be safer, faster, and easier than traditional paper filing. Taxpayers enter data into programs which calculate all the amounts for them while gathering forms. Sign up for a free account now and prepare your return - eFileIT on eFile. The University of North Carolina Wilmington. Accounting Horizons 34 1 : 1— Article history Received:. Cite Icon Cite. You do not currently have access to this content.
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Sign in via your Institution Sign in via your Institution. Buy This Article. View Metrics. Citing articles via Web Of Science 1. Although the number of ratings and profiles of respondents was generally consistent with prior years, the mean number of individual returns, entity returns, and tax practitioners were all somewhat lower than usual, suggesting fewer respondents from large firms. Similar to previous years, the survey included the tax software ratings questions and provided a write-in option to rate a package not listed.
In addition to evaluating tax preparation and research resources, respondents answered questions about firm practices, such as use of client portals, pay-per-return pricing, and workflow management. Finally, the list of possible tax season issues was updated to include topics that were identified through news articles and discussion forums during and after the tax season.
Exhibit 1 provides a profile of the survey respondents, which demonstrates that survey participants included representatives from small, mid-sized, and large practices, and are generally similar to prior years of this study.
The mean number of individual and entity returns was lower than in , but only modestly lower than the means observed over the last five years. The median value for the number of individual returns is close to those from the last several years, whereas the median value for the number of entity returns was somewhat lower. The mean number of full-time tax practitioners during tax season in the survey was in line with the survey and those reported in years before Further, the median number of tax professionals for has been identical for the last five years.
Overall, the demographics for indicated survey coverage of firms of all sizes, with somewhat less participation by larger firms. Wolters Kluwer CCH , Intuit, and Thomson Reuters maintain their dominance in the tax software market, with each offering multiple tax preparation and tax research products designed to serve different sizes of tax professional firms.
Free websites for tax research continue to gain traction. Value for cost is still one of the lowest rated features of tax preparation software, and survey participants continued to express concerns about cost. For the second year in a row, however, the mean rating for customer support was even lower than the value for cost rating.
Customer support was also the lowest rated feature for commercial tax research software. Open-ended comments from respondents focused primarily on dissatisfaction with customer support, although a few noted appreciation for companies that provide outstanding support. Respondents reported using all of the listed tax return software products, with three partial write-in ratings submitted; fewer than 10 ratings, however, were received for five products. Altogether, ratings were analyzed; the ratings for these vendors are summarized in Exhibit 2.
Survey participants rated each tax preparation software package on six factors: value for cost, ease of use, customer support, availability of forms, accuracy low error rate , and overall rating. These are the same factors considered in the survey since Each factor was rated on a scale of 1 very dissatisfied to 5 very satisfied ; respondents also provided an overall rating for the products using the same scale.
The average overall rating of 3. The last time the overall rating of tax preparation software dipped this low was in ; overall ratings for the past 10 years have not varied much, ranging from 3. Exhibit 2 provides the ratings of the tax preparation software packages and compares averages to the previous three years. One other package, ATX, was rated by more than 10 respondents 18 ratings.
The discussion that follows is limited to these providers, as the results for those receiving fewer than 10 ratings may not be representative of a broader survey of the software users. However, the five products that received between 1 and 10 ratings are included in Exhibit 2 for completeness. Of the seven packages with more than 10 ratings, the overall ratings were between 3.
Drake Software has increased its advantage in overall rating versus the other packages with an overall rating of 4. Except for , Drake has received the highest overall rating every year since ; this year, its overall rating is higher than any previously observed in this survey. Drake also received the highest rating on every individual feature, the first time this has happened in the history of this survey. The second-highest overall rating of 3. UltraTax CS maintained its third-place rank with an overall rating of 3.
The top three rated programs were followed by Lacerte 3. One factor that may have impacted ratings for CCH Axcess Tax was a temporary issue with its e-filing system at the September 15 deadline, which resulted in error notifications to some users.
The changes in overall ratings closely paralleled the changes in ratings of individual features. A comparison of the weighted average rating for each feature in to the rating for that same feature in shows small increases in the average ratings of value for cost and customer support, and modest decreases in all other features and the overall rating.
The value for cost rating increased from 3. Respondents ranked value for cost as the second most important feature for tax preparation software; consistent with past years, Drake Software had the highest average rating for value for cost 4. No other package received an average rating over 4.
Average ratings for ease of use have been very consistent over the past several years; the rating of 3. Respondents rated ease of use as the most important feature for tax preparation software, and the package with the highest ease of use rating Drake also received the highest overall rating. The modest decrease in average overall rating may have been driven by the decrease in average ease of use rating.
Additionally, shifting the work environment from a professional office to a home office may have impacted the user-friendliness of tax preparation software. The average customer support rating had been more consistent over time, until decreasing quite substantially from to , but showed a slight improvement from the low of 3.
For the second year in a row, customer support is the lowest rated feature. It is noteworthy that top-rated Drake Software had by far the highest customer support rating 4. The second-rated package on customer support was Lacerte Tax 3.
Availability of forms was the highest ranked individual features with an average rating of 4. Drake Software had the highest rating on this feature 4. Accuracy low error rate was the second highest rated individual feature, but the average rating declined from 4. Accuracy was tied with cost for the second most important feature. Once again, the highest rated package for accuracy was Drake Software 4. All other products received ratings below 4.
Consistent with previous years, the average ratings of all of the features for the tax preparation software packages were higher than 3. Respondents were asked to indicate how long they had been using the software packages that they rated.
As shown in Exhibit 2 , with the exception of Lacerte Tax, all packages had been used an average of five or more years by respondents; thus, most of the respondents would be characterized as experienced users of the software that they rated. Exhibit 3 provides descriptive information about the tax preparation software users for the packages rated by 10 or more participants.
The size of the firms utilizing these vendors in was generally similar to previous years. The other products had users of all sizes, but were used primarily by firms preparing fewer returns, with fewer full-time tax preparers, and a majority of their practice in tax.
Survey participants were asked to rate the eight most commonly used commercial tax research software products, based on a review of print and electronic media. They also had the option to write in a package to review, as well as to rate free resources such as the IRS and state tax websites. Although just over half of the respondents used a commercial tax research package, this survey has documented a shift toward greater reliance on free tax research resources in recent years. The ratings for the commercial products are higher than the free options, but tax practitioners clearly find value in both.
The ratings for the tax research products are summarized in Exhibit 4 , with the free resource ratings shown after the commercial software. Altogether, ratings were received for the commercial tax research software packages, and an additional ratings were received for the free tax research resources. Seven write-in ratings were submitted, but most did not identify the product. This is the third year the survey generated more than 10 ratings for the Tax Book, a relatively new product.
Of the free tax research resources, the IRS website had the most ratings at , followed by state tax department websites at 91, Google searches 86 ratings , and other Internet searches 17 ratings. Of the six packages with more than 10 ratings, just one product, CCH IntelliConnect, experienced an increase in the overall rating.
Parker Tax Pro was essentially unchanged, while Checkpoint received identical overall ratings of 3. The two remaining providers received lower ratings in than —Bloomberg Tax declined from 3. The range of overall ratings was similar to previous years, with individual software ratings ranging from 3.
The overall rating of all products commercial plus free internet resources was 3. Respondents ranked the overall performance and five features of the tax research software packages on a scale of 1 very dissatisfied to 5 very satisfied. The average rating for value for cost was 3. The average rating for ease of use increased from 3. The average rating of customer support also increased somewhat, from 3.
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