TCP's annual tax software roundup

Products:
Brian Costello's HomeTax
CanTax for Windows
CoolTax
GriffTax
Icicle Computer's Tax Return
QuickTax Deluxe for Windows
SonicTax
SprintTax
Tax Cruncher
TAX made EASY
TaxWiz

A tough time for tax companies

This year's annual roundup of tax software finds the market in disarray. Change is in the wind, and with it, a sense of confusion. Smaller companies are scurrying hither and yon with plans and schemes while the more experienced stay the course and fear the worst. The factors that are causing these tax software companies difficulty are the nature of the product, on the one hand; and the nature of the Internet, on the other.

On the one hand

The first difficulty inherent in tax software is the short time frame within which these companies must act. Individuals begin to think about tax software when their T4s arrive, which is legislated to happen before the last day of February. Unfortunately, Revenue Canada cannot finalize tax forms until Jan. 1, when there is no longer the possibility of new legislation. The series of events-from finalizing code, to making diskettes or CD-ROMs, boxing and shrink wrapping, and getting through the distribution channels and onto retail shelves-is difficult and time consuming.

It is for these reasons that tax software has traditionally come in two stages: a prefiling version, with an incomplete set of forms arriving on shelves before Christmas; and a complete final version hitting the shelves in mid-February. Purchasers of the early edition are mailed a diskette that upgrades their program to a filing version, while adjusting any forms and calculations that have changed at year's end.

The problem with this strategy is the cost of putting the product on the shelf once, followed by a complete re-mailing of another set of diskettes or CD-ROMs (and packaging). This escalates costs, especially when you consider that the retailer must make money as well. Consumers will pay only so much for a product that they will use only once or twice-especially when one rationale for doing your own taxes is to save money.

Another problem is version confusion if both products can be found on the shelves of retail stores during the transition from early bird to final versions.

And finally, retailers will try to cut their losses at the end of the season by discounting, which can seriously annoy consumers, especially when those who thought they were getting a low price as a repeat customer see their software on sale to the general public for less than they paid. In an attempt to overcome this situation, the publishers of two of the products reviewed below have gone to a one-product strategy. Their software arrives on the shelves at the end of November and is the final version. However, only about 70 per cent of users will be able to file with the product. The remainder will discover that they cannot file without the missing forms, which they can get, but not until February.

"We don't pay taxes. Only the little people pay taxes"

-Leona Helmsley (b. 1920),

U.S. businesswoman

On the other hand

The second reason that the industry is in a state of great flux is that all of us little people are using the Internet. As we predicted last year, more and more tax soft

ware is available on the Net. Seven of the products listed below are available for downloading while a mere three are retail-only programs.

Tax software is ideally suited to online purchasing because it is small. However, selling tax software from a Web page is not without difficulty. The public does not have mass access to the World Wide Web, nor much confidence in the security of Internet commerce. The driving force behind this development is the low cost of delivery. There is no packaging, delivery, retail middleman or other cost. For this reason, over-the-counter software can't compete with downloaded software on price alone.

Don't be too quick to leave the traditional retail channel though, that box and those manuals, the registration card and having a place to go if you are not happy are all import considerations. Also, to get the amount of information over the Web that you get from a package like HomeTax or QuickTax would take many hours of downloading if it were offered, which it is not.

The good news here is that tax software as a whole has come down in price, with the high end moving down from $59.99 to $39.95 and the low end moving from $39.95 down into the under-$30 range and lower.

Efile infancy

Efiling (electronic filing) is still in its infancy. Again the problem with this method of submitting tax returns is inherent and not likely to go away soon. Revenue Canada, understandably, will not let the public file returns electronically. Plus, they will not let a tax preparer efile unless he or she has an actual signature from you. Thus, Internet tax companies are effectively stopped from simply uploading your return and efiling for you. This is also understandable on the part of the government as there must be accountability. Lastly, efilers must be paid for their service. When you add the cost of a software program to the cost of efiling, the whole business becomes too expensive.

This may be the reason behind this year's appearance of a free tax program. Perhaps the company described below is testing the waters for a new model. Maybe the program is free so that the only charge you would incur would be to the efiler. The efiler would have to purchase the efiling program thus earning the software company its income. This may or may not be what is happening behind the scenes, but if it is, it could be a successful marketing model because it would keep prices down.

Efiling is a win-win scenario because it is considerably faster for you and it saves Revenue Canada the cost of rekeying your data.

Casualties

Also as predicted last year, the number of traditional players in this market has thinned. Dolmen Software Inc. the creator of VizionTax, the 1994 TCP Reviewer's Choice for best tax software, was beset by distribution problems and has ceased to exist. (We understand that its talent has been bought by Intuit.) We were unable to find or contact a number of companies that were in last year's roundup including MacTax and QuickReturns. DataTAX, from Legendary Design Technologies Inc., has a Web page that advertises a new tax product for this year but the company didn't respond to our email.

The keen truth of taxes is they cut close and regular. There is little we can do to stop the bleeding but there is a way to ease the pain, and that way is tax software. Always interesting and a whole lot nicer than sitting down with a pencil, and pad of paper, tax software is here to stay.

"It was as true as taxes is. And nothing's truer than them"

-Charles Dickens (1812-70),

English novelist

The main contenders

CanTax for Windows, Canadian Tax Tutor
From: CanTax (division of Softkey Software Products)
Suggested retail price: $36.95, $59.95 (Tax Tutor)

CanTax is headquartered in Calgary, and is a leading developer of income tax software for individuals, small businesses and tax professionals. The company introduced its first product, CanTax T1 Personal Income Tax Software, in January, 1985. In 1989, it launched T1Plus for professional income tax preparers, which has become one of the most popular programs for professionals, and which approximately 8,000 of Canada's tax preparation services use.

Its product line currently includes CanTax for 1996 personal income tax returns, and CanTax T1 Plus and TI Plus with efile for accountants preparing personal income tax returns. Although CanTax products are conceived and developed in Calgary, the company is owned by Softkey Software Products Inc., which has been purchased by The Learning Company, now the third largest software company on the planet. Thus, despite its Canadian roots the company is not wholly Canadian. CanTax claims that more than 50,000 individual taxpayers across Canada use CanTax.

As you would expect, CanTax contains the forms and schedules needed to file complete and accurate personal income tax returns that are ready for submission to Revenue Canada. They have federal and provincial taxes for all provinces and territories (except Quebec provincial taxes); and will allow you to prepare up to 15 returns. The ability to claim credits and deductions; perform "what if" scenarios; and concurrently prepare a spouse's return are here. CanTax contains context-sensitive help screens with easy-to-understand explanations of the tax laws, money-saving tips, suggestions and program shortcuts.

System requirements for the Windows version are a 386 or better, 8 MB of RAM, Windows 3.x or 95, 8 MB of free space, a printer and a mouse. The DOS version will run on a 4 MB of RAM.

CanTax has returned to the inelegant interface of its 1994 version due to customer input. Apparently, many people wanted what they were used to. The style of the interface, neither ugly nor beautiful, is very reminiscent of the DOS world where CanTax has its origins. Functionally, the program is competent with some ease of use conventions, but it is not as intuitive as others. The company has introduced a new practice this year. It no longer sells a prefiling product in December/January followed by a final edition in February/March. Under the new plan, CanTax hits the shelves in December with one product that will work for 70 per cent of the public. Those individuals who need the forms not contained in this package can indicate their need of the additional forms and will receive them at no additional cost in February.

Since we were interested in testing the program with a tax scenario involving a home business we fell into the 30 percent who could not use the product until the additional forms arrived. CanTax will allow you to file up to 15 income tax returns, which makes it good for doing the whole family.

The company also puts out The Canadian Tax Tutor, which is identical to the regular program except that it comes with a tutoring booklet for people wishing to really learn tax preparation. This $59.95 product is an interesting attempt to help Canadians learn about taxation as well as doing their taxes. This initiative should be well received by taxpayers in need of more information as well as a good tax filing program.

CanTax is one of the oldest tax programs in Canada and is a real workhorse for many people. The JumpStart process is nice and the program is easy to efile as many efilers use the professional edition. However, the product does not take advantage of the abilities of today's computers. The ability to convert a Quicken file didn't work for us and, in fact, repeatedly caused a system fault, although this problem may be specific to the particular configuration of the test machine. A file saved from the Canadian Tax Tutor wouldn't load for the standard CanTax program. CanTax tries hard again this year but does not beat the competition.

Contact: CanTax, 200-6130 3rd St. SE,
Calgary, AB, T2H 1K4. Tel: 800-265-3800. Fax: 800-491-5515. Web site: http://www.cantax.com

Brian Costello HomeTax: Ready-To-File (DOS/Windows)
Suggested Retail Price: $29.95

"Practically perfect" were the words we used last year to describe HomeTax and things have only gotten better. HomeTax offers the user two methods of interaction-the EasyPrep interview style or the more traditional forms method. Calculations are performed automatically and information is entered in the correct place on each form and HomeTax performs an automatic accuracy check. HomeTax offers features including extended technical support by phone as well as 24-hour Internet assistance.

New features include better print resolution, an interface with the Royal Bank's PC banking product Managing Your Money, and an Internet upgrade to the Deluxe Edition. The "What If?" feature lets users examine tax scenarios and forecast the tax results of various financial strategies. Checklists and diagnostics give users detailed advice, including optimizing deductions and credits between spouses. A tax-summary feature enables users to compare the current return with last year's, so they can catch any irregularities. The multimedia edition, reviewed here, includes an expanded list of expert tax tips from Brian Costello, the nationally recognized tax-planning authority, as well as a very well done tutorial.

HomeTax requires a 386DX system or higher with 8 MB of RAM, Windows 3.1 or 95, and 11 MB of hard drive space, 2x or higher CD-ROM drive, Microsoft-compatible mouse, VGA monitor and Windows 3.1 compatible printer driver.

This CD-based multimedia program is wonderful. It smoothly converted the personal data such as name, spouse name, dependents, addresses, social insurance numbers, etc., from our Quicken file. The video is helpful without being intrusive. The help system is excellent and the program looks good. Navigation is excellent with very well thought out buttons. All round, HomeTax is a great program. Like its cousin CanTax, HomeTax will do up to 16 returns. Also, like its cousin, HomeTax has moved to a one-product mode of retailing, thus the program will not work for complex or unusual returns.

The only downside to this program is this-HomeTax charges $5 to send you the forms that you must get if you are not a standard tax filer. That is why the regular program is called Ready-To-File. Worse, you must get the upgrade, HomeTax Deluxe, if you intend to efile. To be fair the vast majority of returns are not filed electronically and will not need the upgrade. However, anyone with a home business or any capital gains will be disappointed to find out they must wait until February and pay an additional charge to use the product. But overall, HomeTax is great value and is priced to sell.

Contact: Softkey, 2700 Matheson Blvd. E., 8th Floor, West Tower, Mississauga, ON, L4W 4V9. Tel: 905-624-0303. Fax: 905-624-8944.

Web site: http://www.interlog.com/~hometax

QuickTax for Windows,
QuickTax Deluxe for Windows
Suggested retail price: $29.95, $39.95 (Deluxe)

It's debatable but, at the consumer level, some of the best software in the world is from Intuit the makers of Quicken and QuickTax. This year's QuickTax Deluxe is the slickest, fullest tax program ever. The CD-ROM install program slides smoothly into an introductory video clip from Marshall Loeb and Gena Katz. Loeb and Katz will be familiar to users of previous Quicken versions. Loeb is a former managing editor of Fortune and Money magazines, and Katz a senior manager in Ernst & Young's National Tax Group.

Like both of the other main contenders QuickTax offers both forms and interview approaches. The interview style is EasyStep and uses the same very cool display from last year. The user sees the tax form, views a small explanatory video and presses buttons to move though the process. Also carried over from last year is the big red circle that indicates the next item you are to fill out. Other features include: SmartAudit, Deduction Finder, extensive help, import/export, What If feature, toll-free telephone support, tax summary window, links to Quicken, and more. The CD-ROM also contains three books on taxes and the Financial Times BellCharts, a mutual fund program to analyze most funds in Canada.

We went through the software using a fictional tax return from someone with a small home office. The program was very helpful in taking us to the correct forms and offering information from the included tax books. The process of filling out taxes for a home office is not easy, but with Quicken it was easier. Moving around in the program is great and the interface is unequaled in both functionality and aesthetics. The videos, voice overs and highlights are tasteful and a great way to liven up the process of doing taxes.

QuickTax Deluxe for Windows is last year's Reviewer's Choice in this category and although there are some changes the product has remained substantially the same. Intuit markets its tax program by putting a prefiling edition on the shelves until the final version is available. Users must register the software so Intuit can send the final product. It is not possible to file with the early edition. Although Intuit has extensive Internet experience and has incorporated Internet access into its financial program, the company has not moved to any of the more innovative online techniques for its tax product. Efiling is a possibility, and is mentioned on the box, but the function is buried in the program. This is a safe, reliable and fun tax program and top-notch teaching software all in one. QuickTax Deluxe is outright the best tax program ever made.

Contact: Intuit Canada, PO Box 652, Station Main, Fort Erie, ON, L2A 6N7. Tel: 800-825-8169 (ext. 309). Fax: 800-324-0375. Web site: http://www.intuit.com

Alternatives

GriffTax (Mac Only)
From: Colin Griffiths & Associates Ltd.
Suggested Retail Price: $39.95

Last year we favorably reviewed this product as a Windows program. A number of things have occurred at this innovative company and now GriffTax is a Macintosh-only product that you download from the Internet. The Windows version is now called SprintTax (see below). When asked why the company chose to focus completely on the Mac version of its software, company spokesman Colin Griffiths said, "Because Windows was so horrible!"

Fair enough. Griffiths, a self-described Mac-o-phile, has ported his software over to Windows in the past and that is experience enough for him to have an opinion. Griffiths has not only quit the Windows side of things he is also introducing an innovative approach to doing your taxes. You can download GriffTax, print out the return and mail it, or you can do your return on the Net.

Here is how it works: You go to the GriffTax Web page and enter your data. You don't enter a name for security reasons, without a name the data is simply numbers belonging to an anonymous file. Once you have paid for the program, via a credit card and the transaction abilities of the new versions of Netscape or Internet Explorer, you then download a file that prints as a tax return. You can go online and alter the numbers as much as you like but can only download three times. When you are satisfied that you have your return in order, you can either download the printable file or you can have an efiler download the password protected file and efile it (you must visit the efiler and give a signature).

Griffiths is giving away the efile software to anyone so that even if your efiler doesn't use GriffTax he or she can download the software and prepare the return. This effectively makes the product OS (operating system) independent and opens up the program to the Windows world. Bravo, for innovation. The process was not up and running at the time of this review so we must rely on the word of the company for this year.

The software product itself is elegant and well written. It is possible to do multiple returns. There is a good help program and all the regular functions. As with many of the companies reviewed here, the 1996 product

was not finalized at the time of the review, thus these findings are based on last year's product. A good interface and an innovative company make GriffTax a good choice for Mac users and may be a good choice for Windows users too.

Contact: Colin Griffiths & Associates,
120 Pineridge Rd., RR#3, Carp, ON, K0A 1L0.
Tel: 613-839-2455. Fax: 613-839-1764.
Web site: http://www.grifftax.com

SprintTax
From: AKMicrosystems
Suggested retail price: to be announced

AKMicrosystems has taken over the Windows version of GriffTax and is revamping it as SprintTax. The software sent to The Computer Paper for review was accompanied by a note explaining that this was an alpha version of the product. In fact, as far as we can tell, this is last year's GriffTax for Windows intact. This poses a difficulty because the Windows product was well reviewed last year and, should the revised product remain true to the original, it is likely that this will be a successful offering. However, if the program is altered more than cosmetically the final version may be anything what-so-ever. There is a long road between alpha code and gold code! This will certainly be a make or break year for the product and we look forward to reviewing the real McCoy next year.

Contact: AKMicrosystems, 9B-245 W. Beaver Creek Rd., Richmond Hill, ON, L4B 1L1. Tel: 905-771-1155.

TAX made EASY (DOS only)
From: La Motte Enterprises Inc.
Price: $39.95

"For those who don't like rodents!" was the note scribbled on the package containing this software. The last in a dying breed, TAX made EASY clings to life with the tenacity of those aging lovers of the command-line interface. The product hasn't changed, neither has the review: If minimalism were a criteria for tax software TAX made EASY, by La Motte Enterprises Inc. of British Columbia, would hands-down win. This program needs DOS 2.1 or later (we'd forgotten there was a DOS 2.1), either a 3.5- or a 5.25-inch floppy drive, .5 MB of RAM and no hard drive space since it can run from the floppy. The company has been writing tax software for more than 11 years and is firmly ensconced in the DOS world. The manual is a single, folded piece of paper, which is all you need because the question windows and accompanying forms are as clear as they are Spartan. There is nothing pretty, superfluous or added to this package. What you get is a Lilliputian, prosaic bit of DOS code that performs a function-it calculates your taxes. Unfortunately, 40 clams is a hefty price for such a thin product.

Contact: La Motte Ent., 204-2614 Bridge Street, Victoria, BC, V8T 4S9. Tel: 250-389-0428.
Fax: 250-477-9145.

SonicTax
From: UnSinn Software Solutions Inc.
Suggested retail price: $29.95

SonicTax is a Windows tax program available only from the World Wide Web. The download is a small, self-extracting .zip file that installs to your hard drive. The program is a very simple one that will do the majority of returns without trouble. There is no fancy programming here. You move through the software's forms-based interface filling out the blank spaces. When you are done simply print out and mail the return. You can do a spousal return but must close the first return to get to the second. For a simple and tiny program this is a decent offering. SonicTax is a solid, simple little program that you can get at the Web address below. For simplicity this is it. However, to be a really good product the price should be $15.95.

Contact: UnSinn Software, 410-10665 Jasper Ave., Edmonton, AB, T5J 3S9. Tel: 403-425-8917.
Web site: http://www.taxbuster.com

TaxWiz
From: TaxSoftware Inc.
Suggested retail price: $26

TaxWiz is a small program much like SonicTax. It uses the same install program, has the same readme file (except for the name), sports a similar icon and is almost identical in its overall structure. The main differences here are: a) this is a retail product, and b) we couldn't get it to work.

The company sent two programs with different passwords but neither would let us enter any data. As well, the text and information boxes didn't line up. There was an option to play a peculiar little MIDI file in the background but we are not sure if this is meant to please or distract. All we can guess is that this is pre-release product that is still a

work in progress. The company even borrowed our title from last year's tax review (Many Happy Returns!) for their disk cover.

Contact: TaxSoftware, PO Box 59112, Edmonton, AB. Tel: 888-413-0370.
Web site: http://www.taxstuff.com

Living vicariously

Tax Cruncher (Win.xx/Mac)
From: Tax Cruncher Software Incorporated
Price: $15

Tax Cruncher Software is an innovative company that uses your existing spreadsheet program to do tax calculations. It works like this-you download a small 100KB compressed file for your particular operating system and your individual spreadsheet program. Using PKUnzip you expand it to a standard spreadsheet file. You start your spreadsheet program and load the file. You enter your social insurance number and then call the company's toll-free number. You arrange for payment and they give you an access number. You sit down at your machine, enter the number and fill in the tax form boxes. When you're done you print a copy and mail it to Revenue Canada.

There is no paper manual and the interface takes a little getting used to since the forms lie one beside the next. This is really just one large spreadsheet so don't expect it to look like the real tax forms.

Tax Cruncher is available in the following formats: Lotus 1-2-3 (DOS and Windows), Quattro Pro (DOS and Windows), Microsoft Excel (Macintosh and Windows), Claris Works (Macintosh and Windows), Microsoft Works (Windows). The concept is good and although the process of using a spreadsheet takes some getting use to, overall it works. The company is considering adding an interview-style component, but how this would be achieved is unclear. The only recommendation we would give them is to lower the price.

Contact: Tax Cruncher Software, Box 1358, Station M, Calgary, AB, T2P 2L2. Tel: 800-254-9426.

Icicle Computer's Tax Return
(Mac, perhaps Windows)
From: Icicle Computer
Suggested retail price: $25, $15 (renewal)

Like TaxCruncher, Icicle's returns are not really software programs but rather spreadsheet data that you download and open in your Excel 3, Excel 5 or ClarisWorks programs. The files are compressed with StuffIt and will uncompress on any Macintosh. The company expects to have a Windows product for this tax season, but was unable to supply one to us in time for this review. The Macintosh product works as well as these types of programs do, which is to say they work but are neither pretty nor smart. The price is about right for a repeat user but seems high for a first time user. If you already spend lots of time in your spreadsheet and like it, a spreadsheet tax file will work splendidly for you.

Contact: Icicle Computer, Box 20093, Rideau East PO, Ottawa, ON, K1N 9N5 Tel.: 613-237-4899.
Web site: http://www.hookup.net/~icicle

For a song

CoolTax
From: FLS Research Inc.
Price: Free

Cooltax is a Canadian T1 Personal tax-preparation package for Windows-and it's downloadable free from the Internet. Cooltax is adapted for the home user from the line of Taxbyte professional tax software by FLS Research Inc. of Ontario. It is available in both a 16-bit version for Windows 3.1x and a full 32-bit version for Windows 95 and NT. The "early-bird" planner was available for downloading since before Christmas, and the production version for filing will be available for free downloading in mid-February, 1997.

Cooltax highlights include: an online animated tutorial showing the user how to prepare a simple tax return for an individual or a whole family; the Tax Expert feature-a wizard to guide users to the correct tax form for data entry; complete tax forms that are fully approved for submission to Revenue Canada; full online help for each tax form; and fully interactive "what if" scenarios. What's the catch, you ask? Nothing. That is all. The company does have add-ons for professional users and efiling but for the individual user the program is gratis and it will do up to 15 returns.

The program is just over 2 MB and downloads as a self-extracting .zip file. Once unzipped the executable opens up and offers the user a choice of two data-entry methods. Although the interview format is ugly and confusing the forms accurately reflect Revenue Canada forms. The program looks and feels just like the other tax programs that you pay for. You can't efile, unless the tax preparer purchases the professional product, but for the majority of users that is not a problem. The program does not have all the bells and whistles of a HomeTax or QuickTax, but it is a full-fledged program and has the look and feel of stability. For the truly value conscious there has never been anything that offers so much for so little. Somebody must be shaking in their boots over this development. Only time will tell if this company can keep up such a marketing strategy. Good luck to them from Joe Public.

Contact: FLS Research, Tel: 416-490-8997.
Web site: http://www.cooltax.com

Reviewer's Choices

This year, we've awarded the TCP Reviewer's Choice for best personal tax software to two packages. For the second year in a row, we are pleased to announce that Intuit's QuickTax Deluxe for Windows is one of the winners. Joining this product is Brian Costello HomeTax, published by The Learning Company. Both are top-notch programs, and while QuickTax Deluxe might have the edge in its feature set, HomeTax counters that with a suggested retail price that's hard to beat.

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TCP Online February 1997 Issue