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Comparison of Three Tax Preparation Software Packages, Including: Turbo Tax by Intuit, Inc., Simply Tax by 4Home Productions, and Tax Cut by MECA Software

April 6, 2000

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Ms. Finnerty, Chief Financial Officer

Per your request, I have chosen to do my report on an evaluation of three separate tax preparation software packages for potential use in our company. The following are the programs that I evaluated for Wise’s Wild Toys: Turbo Tax by Intuit, Inc., Simply Tax by 4Home Productions, and Tax Cut by MECA Software.

My research concluded that Tax Cut by MECA Software would be the optimal program for our company to purchase. This program provided the greatest value as far as price and helpful features are concerned. During the evaluation process, Tax Cut proved to be a superior program in every category in which it was tested.

The information in this report was primarily obtained through a personal interview with Jonathan, a Sales Manager at CompUSA computer store. Additional information came from journal articles, which were found in the Grasselli Library of John Carroll University.

Thank you for affording me the opportunity to conduct this research project. My associates and I are looking forward to working with this new method of preparing our tax information.

Please let me know if you have any additional questions. I will be happy to assist you in getting this project underway.

Letter of Transmittal…………………………………………………………………………………………………..I

List of Illustrations…………………………………………………………………………………………………..III

Executive Summary…………………………………………………………………………………………………IV

Introduction………………………………………………………………………………………………………………1

Purpose…………………………………………………………………………………………………………..1

Scope………………………………………………………………………………………………………………2

Limitations………………………………………………………………………………………………………2

Turbo Tax by Intuit, Inc……………………………………………………………………………………………..2

Price………………………………………………………………………………………………………………..3

System Requirements………………………………………………………………………………………3

States Available……………………………………………………………………………………………….3

Special Features……………………………………………………………………………………………….3

Installation……….…………………………………………………………………………………………….3

Error Recovery and Support…………………………………………………………………………….4

Preparation, Guidance, and Filing……………………………………………………………………4

Simply Tax by 4Home Productions…………………………………………………………………………….5

Price………………………………………………………………………………………………………………..5

System Requirements………………………………………………………………………………………6

States Available……………………………………………………………………………………………….6

Special Features……………………………………………………………………………………………6

Installation………………………………………………………………………………………………..…..6

Error Recovery and Support…………………………………………………………………………….6

Preparation, Guidance, and Filing……………………………………………………………………7

Tax Cut by MECA Software……………………………………………………………………………………….8

Price……………………………………………………………………………………………………………..……….8

System Requirements………………………………………………………………………………………………8

States Available………………………………..……………………………………………………………………..8

Special Features…………………………………………….………………………………………………………..9

Installation……………………………………..……………………………………………………………………9

Error Recovery and Support………………………………………………………………….………………9

Preparation, Guidance, Filing………………………………..……………………………………………..10

Conclusion….….………………………………………………………………………………10

Works Cited…………………………….………………………………………………………………………….12

Figure 1 Suitability to Task for Turbo Tax by Intuit, Inc……………………………………………..5

Figure 2 Suitability to Task for Simply Tax by 4Home Productions…………………………….7

Figure 3 Suitability to Task for Tax Cut by MECA Software……………………………………..10

The purpose of this report is to determine which tax preparation software program would be best suited for use in Wise’s Wild Toys. The company has undergone a rapid expansion since its organization in 1960, and it continues to grow today. In keeping with the constant developments in computer technology and software, it has been decided that a tax preparation software package will increase the efficiency of the company’s business transactions.

This report evaluates the following software programs: Turbo Tax by Intuit, Inc., Simply Tax by 4Home Productions, and Tax Cut by MECA Software. These three packages were evaluated in the areas of price, system requirements, states available, special features, installation procedures, error recovery and support features, as well as preparation, guidance, and filing mechanisms.

A personal interview with an employee of CompUSA computer store provided the primary information for this report. Journal articles gathered from the Grasselli Library of John Carroll University provided the remainder of the information on tax preparation software packages.

It has been concluded that Wise’s Wild Toys should purchase the Tax Cut program produced by MECA Software. This program produced superior results in the several categories in which it was evaluated.

Wise’s Wild Toys began in the early 1900’s selling discounted toys mainly to those families in poorer areas of Cleveland, Ohio. Today Wise’s Wild Toys has customers all over the Cleveland area. Their generosity to the underprivileged has given them great publicity in the Cleveland area has brought many people to see this wonderful store. Due to its expanded clientele, Wise’s Wild Toys has recently expanded to a second location to meet public demand. They now have stores located on the east and West Side of Cleveland.

Wise’s Wild Toys has increased their inventory by 900% in almost 100 years and their hired employees from the 2 owners to roughly 100 employees. Due to Wise’s Wild Toys increase in size its managerial duties have become more difficult to organize. It has become obvious with the advances in computer technology and software design that efficiencies can be gained through the use of a modern accounting and tax software package.

The purpose of this report is to evaluate three tax preparation software programs and submit recommendations on the premium program for Wise’s Wild Toys to purchase. The information contained in this report was obtained from journal articles found in the Grasselli Library of John Carroll University. Additionally, an interview with a salesperson at CompUSA computer store contributed information for this research.

This report compares several features of updated tax preparation software packages. To begin, some general information regarding price, system requirements, and the states that sell the software, is listed. Next, the special features of each program are evaluated. The installation process is then discussed, followed by error recovery and support features. To conclude, a chart illustrating preparation, guidance, and filing mechanisms is explained for the three software packages.

Of note, which also heightens the time frame here, is that the current software and hardware packages expire in the year 2002.

Turbo Tax is a dependable program produced by Intuit, Inc. which has been one of the top programs for the past few years. Intuit, Inc. hasn’t presented any major alterations to the intuitive interface that was introduced in last year’s program, because there was little reason to (Neumeier, 170). Overall, Turbo Tax is a reliable, thorough, and understandable program when it comes time for tax season (Jonathan).

This software program is priced at $49.99 for the deluxe edition, $27.99 for the federal edition, and $29.99 for the state edition.

This program requires 4 megabytes of Random Access Memory (RAM) space and 20 megabytes of hard-drive space.

The availability of this program is quite diverse, as it can be purchased in 45 states in the United States (Dean, 153).

The EasyStep interview is one highly recommended method for filling out tax returns. This program guides the user through the entire process from beginning to end (McCollum, 34). The Forms Method is an additionally endorsed program that permits business owners to complete their forms directly, without any major complication (McCollum, 35).

To begin the program, the user simply types the word “install’. Next, the registered user name, customer number, and install code, which are found on the

shipping invoice, must be entered (Neumeier, 170). From this point, each of the five disks that are supplied with the program must be inserted. The entire installation process can be completed in five minutes, and once the program is installed, it can be easily reconstructed for different hardware (Neumeier, 171).

The help feature in this particular program consists of limited advice from the Tax Advisor (Keating, 80). Additional features include a pop-up calculator, a notepad for making corrections, and a four-part review mechanism for detecting deductions that can be made. A diagnostic message is printed along with any invalid information to alert the user of a mistake (Neumeier, 170). Information can be readily added, deleted, and changed even without the presence of a built-in edit feature (Neumeier, 36). The makers of Turbo Tax guarantee their program, but if the program makes an error in calculating tax returns, the company will pay the IRS penalty (Yakal, 262).

As Figure 1 illustrates, Turbo Tax by Intuit, Inc. received relatively favorable results in a test conducted by PC Magazine. Turbo Tax received above average results in the areas of “Preparation” and “Guidance”, and the area of “Filing” was determined to be somewhat superior to the other software programs on the market (Yakal, 260).

Figure 1 Suitability to Task for Turbo Tax by Intuit, Inc. Source of data:

Yakal, Kathy, PC Magazine, 13 (1996): 260.

Simply Tax is a reproduced version of a software package that was given away two years ago by 4Home productions. This year’s version combines some original material with updated content and guidance (Jonathan). Although this program does not yet match the reliability and speed of the market leaders, its new beginning shows promise (Yakal, 211).

This software program is priced at $19.99 for the federal edition on diskette. The Windows version can generally be purchased for $39.95, although the list price is $69.99 (Neumeier, 148).

This program requires 8 megabytes of RAM space and 13 megabytes of hard-drive space.

The availability of this program is somewhat limited, since it can be purchased in only 20 states in the United States (Dean, 153).

Information concerning income and calculations for business, as well as personal, deductions and expenses are presented by the helpful Tax Wizard (McCollum, 34). Several other personal-finance programs, including Quicken and Supply Money by 4Home Productions, can be imported to this particular program for a more complete tax form (McCollum, 35).

This installation process is relatively simple to follow, and does not require more than 10 minutes (Neumeier, 147). Providing that the user has the appropriate equipment, an electronic filing program, which is contained in all packages, can be installed with ease (Ketron, 18).

This program offers on-line tax assistance and advice from Ernst & Young Accounting Firm (Keating, 81). In addition, a pop-up calculator and notepad are provided, as well as mini-worksheets for lengthy calculations (Jonathan). Incorrect information cannot be accepted, and it is not easy to alter the information that has

already been typed into the program (Neumeier, 148). A long process, which requires the user to backtrack through the original interview process, is required to change invalid information (Neumeier, 37). Unfortunately, though, 4Home Productions does not provide a guarantee with their software package (Yakal, 211).

As Figure 2 demonstrates, Simply Tax by 4Home Productions was somewhat inconsistent in its evaluation by a study conducted by PC Magazine. Simply Tax was found to be below average in the category of “Preparation”, above average in the category of “Guidance”, and average in the category of “Filing” (Yakal, 211).

Figure 2 Suitability to Task for Simply Tax by 4Home Productions

ExcellentPower

Source of data: Yakal, Kathy, PC Magazine, 13 (1996): 211.

Tax Cut has undergone some major additions to last year’s already thorough program. Additional guidance and easier navigation are two of the changes made by MECA Software (Jonathan). The program’s special “Navigator”, a colorful feature that guides users through the program and makes tax preparation easier, is one of the key

elements that earned Tax Cut the PC Magazine Editor’s Choice top rating award among similar products (Yakal, 240).

This software program is priced at $34.99 for the deluxe edition and $15.99 for the federal edition. In most areas, the DOS version of this package can be found for about $40, even though the retail price is $79.95 (Neumeier, 158).

This program requires 4 megabytes of RAM space and 10 megabytes of hard-drive space.

The availability of this program is somewhat limited as well, since it can be purchased in only 23 states in the United States (Dean, 153).

Before work is begun on the program, a guided “Q & A” interview, called the “Navigator”, walks the user through the return (McCollum, 34). The “Navigator’s” opening screen contains 18 graphics that run down the side of the screen, and carefully guide the user through the task of tax preparation (Yakal, 240).

Throughout the program, updates on the current tax situation are elicited, and detailed examples are supplied often (McCollum, 35).

An extensive background of computer knowledge is not required, and the total installation process requires approximately 5-7 minutes (Ketron, 19).

This program provides tax tips from the experts at H&R Block (Keating, 81). Tax Cut’s software includes a pop-up calculator, a notepad for scratch work, and a dialog box that shows up on the screen if you enter data that seems to be out of place (Jonathan). An internal audit program allows incorrect information to be input initially, but it is quickly adjusted (Raskin, 31). A “quick check” is also available for correcting errors (Neumeier, 158). In addition, MECA Software backs their program, and the company is willing to pay the IRS penalty, should the program make a mistake (Yakal, 241).

As Figure 3 shows, Tax Cut by MECA Software was the most reliable program, according to the study by PC Magazine. This program demonstrated superior results in the categories of “Preparation”, “Guidance”, and “Filing”, in comparison to the other programs on the market (Yakal, 241).

Figure 3 Suitability to Task for Tax Cut by MECA Software

Source of data: Yakal, Kathy, PC Magazine, 13 (1996): 240-241.

The data for this report was thoroughly collected and presented for further analysis. Each of these three tax preparation programs, Turbo Tax, Simply Tax, and Tax Cut, was assessed on the basis of price, system requirements, states available, special features, installation processes, error recovery and support features, and preparation, guidance, and filing mechanisms. They all contributed to the efficiency of the task, although it was apparent that one program was superior to the other two.

It has been concluded that Wise’s Wild Toys should purchase Tax Cut by MECA Software to update the company’s current software package. This program was extremely easy to use and the price is a bargain for the features that the software provides. Overall, Tax Cut proved to be an exceptional package in all of the areas in which it was tested. The deluxe edition of Tax Cut software will be a major addition to Wise’s Wild Toys during the approaching tax season.

Foust, Dean. (1996, May). Not All Tax Software is Created Equal.

Keating, Peter and Derek Gordon. (1996, June). The Best and the Rest of this Year’s Tax Software. Money 78 (3).

Jonathan. Personal Interview. (Sales Manager.) 20 March 2000.

Ketron, Holly Wheelwright. (1997, April). How to Pick the Best Software for Doing Your Taxes. Money 18 (2).

McCollum, Tim. (1997, October). Getting With the Program. Nation’s Business 34 (2).

Neumeier, Shelley. (1996, August). Tax Software Gets Easy. Fortune 36 (2).

Practitioners Look at 1040 Software Programs. (1997, February). Taxation for Accountants 145 (27).

Raskin, Robin. (1997, January). Taxing Times. PC Magazine 30 (5).

Yakal, Kathy. (1996, January). Andrew Tobias’ Tax Cut for DOS; Andrew Tobias’ Tax Cut for Windows. PC Magazine 240 (2).

Yakal, Kathy. (1996, February). Simply Tax for Windows. PC Magazine 210 (2).

Yakal, Kathy. (1996, January). Turbo Tax for DOS; Turbo Tax for Windows. PC Magazine 260 (3).

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Computer Software. (2018, Jun 27). Retrieved from https://graduateway.com/computer-software/

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