Derek Foote, CPA

Friendly reminder as we head into 10/16, #TaxTwitter: Refusing to rescue someone from their own consequences is not the same as inflicting those consequences on them.

@tryjasononline There's another guy on Discord already doing that for us, thankfully. 🤣

@WTFoote Consider me skeptical bc CCH but go take one for the team and report back!

Today we're talking about the only TAX PREP software firms should use. It's a short list, 2.5 options, let's dig in: For context I last ran a 40 person tax firm, and have since worked hands-on with something like 2,500 small firms. My full-time job for the past two years has been talking with firms, and I've probably heard more behind the scenes story than anyone else re: what works and what doesn't for US firms under $10M/yr in revenue. First things first: ALL tax prep platforms are wildly outdated. It isn't that you haven't found "the modern alternative", such a thing does not exist for reasons we won't get into today. They're tools only a mother could love, and for those of us blessed with the gift of sight, a daily reminder of just how much design matters. I only recommend 2.5 tax prep platforms to firms: Drake Tax If you’re still early on in your firm running journey, or a cheapskate, this one’s probably for you. It's a great value for what you get, but you’ll end up doing a bit more manual work than you’ll do with… Thomson Reuters UltraTax CS The least bad of all the bad options for growing firms. Wide form support for everything down to silly little made up local taxes, just remember what we learned in yesterday's post: never let them sell you more than the tax software. Also steer clear of their Virtual Office hosting solution. You want a hosting provider, but Virtual Office lands squarely in the venn diagram of slow and expensive. Look at Ace Cloud Hosting, Verito or Rightworks instead. And the last option, the 1/2 recommendation: Intuit ProConnect It’s the only SAAS, cloud-native tax prep software. Similar to Drake it won’t come with as robust of form support as UltraTax, so before pulling the trigger make sure it will prep the forms you need. It gets a half recommendation because Intuit can't decide if they're friends with advisors or not. One exception to these recommendations: If you’ve built muscle memory preparing taxes in a different platform, you may be better off sticking with what you’ve got. For example, if you’re coming from a big firm and are used to Axcess Tax, stick with that. But if you think switching to Axcess Tax will unlock sick gains, you'll be disappointed. There’s no replacement for years of learning what sub menu of a sub menu of a sub menu that input is in. Now for the good news: Not all software in the tax prep process was ripped straight from an Indiana Jones movie. There's little efficiency to be gained by changing tax prep softwares There's HUGE efficiency to be gained by choosing the right tax WORKFLOW software. It's the fastest moving category in the space, and one that’s been turned on it's head (in the best way) by AI. More on that tomorrow, or join my email list because Lord knows what this algorithm will serve you And if this post was helpful for you, consider resharing ♻️ to help out a colleague To a brighter future for tax tech 🥂

@tryjasononline I'm serious! I think it's Axcess Tax Essentials or something like that. What don't I know? 😅

@LoganGrafTax I'm having a similar issue with my first come (with all docs), first serve, queue system. It's being largely taken up by clients without brokerage statements. I've fudged my rule a little for clients that were otherwise on it, and just missing a broker 1099.

Update on the new tax return scheduling system: Clients that scheduled their returns in the first half of February are struggling with making their deadline. 1099-B delivery dates are later than expected. We tell clients that we have to put them on the waitlist to prioritize the projects that are ready by their date. We will still try to prepare their return as soon as we can because this is a transition year, and we're all learning.

@JStaatsCPA Bold of you to assume there's an IT partner! 🙃 But generally it's that fuzzy line of "know enough to know if I need to ask someone smarter than me, or do a lot of research."

@WTFoote Yeah where do you draw the line here between what you'll DIY vs what your IT partner should investigate for you?

Accountants: What are the AI security questions you're afraid to ask? I'll post a roundup to cut through as much misinfo as possible This is a polarizing issue for which we have clear, straightforward answers I don't have a horse in the fight, but the reality is leading AI assistants have security that surpasses that of most apps in the accounting space today ChatGPT's "Team" plan, for example, comes with the AICPA's SOC 2 Type 2 stamp. Something very few tools in our space (that house all our client data) have achieved Unless your prompts are being trained into the model (has not been the case for 1yr+ on leading business solutions), security considerations around an AI assistant are the same as any other cloud app Most misinfo I see online is just working with outdated information, which I'd like to help move the ball forward on Some is a more foundational "putting client data into AI is wrong" concern, akin to the move to the cloud There are wrong, insecure ways to do it, but there are totally secure and responsible ways to do it as well Anyways, any Qs you've had on the subject, post them below! The more first-principles the conversation, the more we'll lean into AI adoption

@JStaatsCPA Like most things, it's about time. Commit the time or commit the resources for help. I setup my PM by myself from scratch, but that was my ONLY task for about two weeks. That exclusive dedication is the only thing that made it feasible.

At this point most practice management setup really can't be done without an implementation expert It's a great investment to make The right implementer will shave years off the learning process to get to the right setup And show you the true capacity of a system, good or bad

@BlakeTOliver A lot of people could probably even due for a view of nature out a window.

If every American got an extra hour of outdoor recreation every day, we would solve most of our problems. I have no data to support this other than my personal experience.

This little countdown is going to give me a lot of joy this tax season. It started at 100. Every update will feel like the workload is getting smaller (while the prep queue just gets longer 😬). Coping with tax season is a lot of metal gymnastics. 🙃

@LoganGrafTax @JStaatsCPA Yes, but really the problem is my very low threshold for annoyance lol. Realistically it's ok. A few complete orgs with a "waiting on docs" note. But the way I built my process, the org "completion" sends it to prelim review, to reserve their queue spot or I send a list back.

@WTFoote @JStaatsCPA There are apps out there that do all of it for you!

Me: I don't need premade bespoke client lists like @JStaatsCPA says... my client list is small... I won't have to use that many... most get me everything at once anyway... Also me, burning time sending out all of three said lists today, after receiving "completed" organizers:

Keeping it real. We sent a disengagement letter, and refund check for work we haven’t done, to a client who, after 18 months, still hasn’t given us bank feed permission. After we mailed letter (but I’m pretty sure before she opened it), she emailed us and disengaged. The feeling was mutual. That’s okay. Our fees are based on the ability to use bank feeds. Another client, yesterday, emailed Randy “this new scheduling process is beyond annoying”. Okay Larry. You’re welcome to move on. This is how we operate. So, having a really high retention rate might not be a great thing. Does it mean we make exceptions for every client? I’ve always been proud of a high retention rate, but now I’m wondering if that’s the reason we got ourselves in the pickle we were in. 🤔

@TheTaxNomad They want indulgent tax deductions, not smart financial planning.

Why do folks ask for tax deductions but always turn up their nose at HSA, 401k and IRA? It’s literally a tax deduction today and money that will come back to you down the road… 🤔 #TaxTwitter

@bhallcpa Can't wait to find out how many lattes she's chugging on 12/31.

2025 goals - make 200 pizzas - make 365 lattes for my wife

@IraGilligan I love that they decided to make it pink.

NC gets the shaft again

@cordes_tax For a hot second I thought this was an IRS notice based on the formatting.

What am I ordering from the hospital room service?

@RoamstheRange Shows the slow change of progress. I was working under this in 2008-2011, and it's how some firms still operate.

@WTFoote Thanks for the flashback to the mid 90s.

Just as a friendly reminder to all the professional staff, the expectation for overtime begins this week and everyone should be in the office on Saturdays from at least 9-3. The weekly charge hour minimum goal is 55 hours.

@JStaatsCPA @BrentForbush Big corps consolidating innovative software for our industry.

@BrentForbush @WTFoote Yeah probably this. Definitely don't expect anything new though

Thomson Reuters just acquired SafeSend

@tom_ealey @DennisSherrin Same. It's the necessary buy in for a more relaxed off season (in theory). But now you hear more and more "extended busy season" which is just awful.

@DennisSherrin @WTFoote I never minded some overtime during busy season, but what I am hearing now is just verging on insane.