RedGear Technologies — TaxWorks - CPA Practice Advisor

From the April/May 2010 Review of Professional
Tax Systems (Traditional Workflow).

RedGear
Technologies offers a collection of tax practice programs, with its flagship
TaxWorks system providing the core compliance capabilities for tax professionals.
The system is available in bundles starting with the base 1040-only package,
or with the addition of various business and other entities. In the 2009 version,
the company introduced several new features, including the ability to add tick
marks throughout the system, an audit trail for form entries on 1040 page 1
and page 2, the ability to lock completed returns, greater automation of multi-state
returns and multi-office management tools.

CORE PRODUCT FUNCTIONS/FEATURES:
This review looks at the TaxWorks Combo C bundle, which gives users compliance
functions for 1040, 1041, 1065, 1120 and 1120S, with all states and the TaxWorks
TaxPlanner system. Other bundles also offer compliance for 706, 709, 990 and
5500. Unlimited e-filing for individual and business entities is included. The
program can manage filings for individuals with multiple state compliance issues,
including part-year resident and non-resident, with new features helping to
automate the process of applying state tax credits and allocating income. Additional
features included with all TaxWorks packages include a fixed asset manager,
appointment scheduler, client organizers, two-year comparisons, and a ZIP code
database that aids in auto-fill features for city and state. Add-on programs
are also available for advanced tax planning and document management.

The TaxWorks interface offers an uncluttered work environment, with access
to the e-file center, management functions, document management and system utilities.
Client engagements are accessed from a spreadsheet-style client selection screen
that offers tabbed filtering of clients by entity type, along with sorting by
various client data fields and search functions. From this screen, preparers
also have quick access to return status functions, review processes and additional
options. TaxWorks offers multiple interview-style input methods along with an
interactive forms-based view that appears alongside the interview sheets and
allows users to jump to data-entry fields, drilldown into associated schedules
and worksheets, add notes or tick marks to form fields, or bring up field-specific
instructions. A new option for data input was added this year with the STaR
wizard, which streamlines basic entry functions, allowing administrative or
lower-level staff to start return data entry, as well as to give refund estimates
based on the basic information.

A form selection menu remains on the left side of the multi-panel return workspace,
along with a return summary that displays live calculations for key client data,
including AGI, exemptions, credits, net tax, and refund or amount owed to federal
and state entities. The interface also provides a panel at the bottom of the
screen that shows instructions on the currently active entry field. Diagnostics
functions are provided in the program’s Review center. The program includes
a new Multiple Office Management Tool that offers enhanced reporting and productivity
tools for practices operating with multiple offices, with data transferred securely
through the vendor’s servers.

PAPERLESS WORKFLOW:
TaxWorks provides unlimited e-filing of returns for all state and federal entities,
and offers paperless document management functions through the add-on ArkWorks
system. ArkWorks integrates with TaxWorks, allowing PDF copies of returns generated
by the tax system to be filed in a client folder structure that is manually
defined by the user. The system can also be used to store scanned copies of
client source documents and related engagement materials, but does not offer
automatic organize or data population features. The integration of scanning
into the paperless management system does offer some optical character recognition
capabilities (OCR), but the tax program does not specifically offer automated
population of client data from scanned documents into returns.

TaxWorks offers data import from QuickBooks, Excel and other accounting packages.
Client letters can also be produced as Word or Excel documents and, along with
organizers and other communication templates, are offered in English and Spanish.
An email utility in the program also allows these items and returns to be encrypted
and electronically delivered to clients.

INTEGRATION/IMPORT & EXPORT:
Along with the data import from QuickBooks and Excel, TaxWorks integrates with
ArkWorks for digital client document storage and also with the TaxPlanner system.
Users can offer loan and debit card refund products through several institutions.
The system includes all form instructions, and users can access the TaxWorks
Tax Institute for tax research functions, which offers free searching of a knowledgebase,
plus fee-based options for having professional staff perform more advanced research
tasks.

HELP/SUPPORT:
Within the program, several Help functions are available, including line-by-line
instructions, tutorials, videos and other functions. The TaxWorks support website
includes thousands of topical articles and how-tos on the system’s functions,
along with program documentation, training videos, contact information for live
support, and access to the TaxWorks Forums, an online message board community
that allows users to seek advice from other users and the company’s support
staff. TaxWorks also has a blog that the company uses to post insight on taxation
news and program features. The program and all updates can be downloaded from
the company’s website. All TaxWorks support staff are U.S.-based, with
live support during tax season available from 6:00 a.m. to 10:00 p.m. MT M-F,
on Saturdays from 6:00 a.m. to 6:00 p.m., and on Sundays from January 17 through
February 14 from 9:00 a.m. to 3:00 p.m.

SUMMARY & PRICING
Pricing for TaxWorks starts at $1,495 for a 1040-only package with one state.
The Combo C package reviewed here costs $1,995 for new users, and allows any
number of users within the same office to work with the program. Discounts are
also available for early renewals. The program is generally intuitive with little
learning curve and is best suited to smaller tax offices with moderate to high
volumes of individual clients, along with small business and less complex corporate
filings. It also offers additional management tools for those with multiple
locations during tax season. TaxWorks does not offer integration with traditional
research programs and is limited in integration options with third-party programs.
The system has only basic document storage capabilities and lacks auto-populate
and auto-organize scanning capabilities.

2010 OVERALL RATING: