Tax Planning Helps Bring Strategy to Tax Season - 2015 Review of Tax Planning Systems

With over 50 tax provisions on the table to be extended through the end of 2016, it’s definitely not too early to begin planning scenarios on how those provisions, if passed, will affect your client’s tax liability.

In those 50 provisions, incentives such as the Work Opportunity Tax Credit (WOTC), and the Research and Experimentation (R & E) Credit are poised to be extended through the end of next year. How will those provisions affect your clients if they’re passed? How will they affect your clients if they don’t? While all signs are pointing to Congress extending these provisions through 2016, tax planning can help your clients be prepared, no matter what the situation.

This is just a very small part of tax planning. And while it would be wonderful to have a crystal ball that allows both individuals and businesses alike to accurately gauge current and future tax liability, even the best planning can be interrupted by something called life; which can mean anything from the birth of a child, to a layoff, to a new job, a relocation, a divorce, or even the shelving of a bill that was expected to be approved by Congress to extend beneficial tax provisions.

Luckily, there is tax planning software products available to assist accountants in their desire to assist clients with both relatively simple tax decisions such as whether to convert to a Roth IRA from a traditional IRA, or what the tax implications would be of holding an appreciated stock versus selling that same stock.

It’s also important to note that these programs are designed to assist tax professionals in planning out future scenarios for their clients, and in no way takes the place of an experienced tax professional. What these programs can do is provide professionals with the tools necessary to forecast numerous scenarios for numerous tax years, all to find the most beneficial tax scenario for their client; no matter the circumstance.

For this review, we looked at five of the most popular tax planning software products which included:

While these products cannot magically predict the latest tax laws, or whether they will go into effect during the next tax year, two years from now, or not all, they can help accountants help their clients by creating numerous tax strategies designed to project tax liabilities years into the future. They are also designed to take those fictional life events I mentioned earlier and factor them into the equation, giving their clients a variety of scenarios that can, may, should, and should not happen.

Each of the products reviewed in this issue perform similar functions, with some providing a few years of tax projections, while others offer multiple scenarios and multiple year projections.

So take a moment to look at the reviews. Visit vendor websites, download a demo, or attend a webinar to determine which of these products best suits your business and your client needs, both now and in the future. Then start planning.