I expect that by now most of you have already turned in your tax forms. But if you haven't or you need to start thinking about next year, I would like to recommend a tax preparation software package for your consideration. I have been using this same program since at least 1987, though they have been in business since 1979. This software is called Tax Preparer, and is published by HowardSoft.
Tax Preparer is not cheap. It cost $99 this year for the regular update. However, as Ric Edelman, the financial advisor, author of "The Truth About Money" and host of the "Your Money Matters" radio show on WMAL said in another context, "You get what you pay for. Which are you going to put more confidence in, a tax package for which you paid $25 or a tax preparation service for which you paid a couple hundred dollars."
Basically the program runs on any IBM compatible or Apple compatible machine, even those with 40 character-wide screens, 5.25" disk drives and as little as 64K of memory. So this would include the Franklin 1000 and 2000 series of computers. It will run on a Macintosh only if you emulate the IBM or the Apple computers either through hardware or software.
For the Apple II, it comes on a 3.5" disk or on 5.25" disks with full features if you have a hard disk or 256K of memory You can also get it with limited features if you simply have a 5.25" disk. The software supports 41 different IRS forms including Schedules A, B, C, D, E, EIC, F, H, J, R, and SE. (See accompanying screen shot.) There are also 44 different data entry worksheets to provide documented support for corresponding lines on the forms including such things as Mortgage Interest, Vehicle Expense, Personal Casualty and Theft, and Estates and Trusts, just to mention four. Finally, there are 26 different prominent IRS worksheets built into the calculations that are not part of the printed return such as capital gain worksheets, Roth IRA contribution worksheet, and Child's Investment Income worksheet, just to name three. While the 3.5" version includes all IRS forms, the limited version supports 21. For those of you who prepare other people's tax returns, you can create up to 15 tax returns on each of 99 separate "tax volumes".
The manual consists of two sections, one that stays much the same from year-to-year, and one that you replace every year. The later is the Tax Forms Guide, which covers the current version of all the IRS forms and how you are expected to complete them. The former deals with the Tax Preparer program itself, which hasn't changed much if at all over the years. It contains an Introduction, which covers initial installation instructions and the installation instructions for prior-year users, a Tutorial Guide, which helps cover some of the concepts of operation of the software, and an Operating Guide, which give more detailed instructions about how to work your way through the program, nagivating through the various screens and options, and printing your tax returns. The instructions for the Apple version of the software are distinguished from the instructions for the IBM version by shading of the text, allowing you to just skip over the portions that do not pertain to your situation.
The Tax Forms Guide this year was 10 pages longer than last year, making it 310 pages long. Every year the Tax Forms Guide starts with a highlights of the changes over the previous year. This section was two pages longer this year. This section gives you an overview of what to look out for as you prepare your return, areas where you can't rely on what you did last year but must make decisions about what to do this year.
Screen shot of Tax Preparer running within Bernie II the Rescue on my PowerMac. This shows the forms available to use within the program. The ones checked are the ones that currently have had data input.
The Guide, as you can guess by its length, is very comprehensive. Though Howardsoft never claims to be able to replace your accountant or lawyer, there are often situations you run across where the Guide will make it clear what the implications might be of taking one course of action rather than another. An example of how Howardsoft incorporates IRS rules into the software is indicated by this example paragraph from the Guide. Here the Guide is explaining how to fill out line 5 of the 1099-DIV Worksheet
5 Investment expenses. This is the part of box 1 [on the IRS Form 1099-DIV] that you did not actually receive but was used by the payer to cover investment expenses. You must pay tax on the full amount in box 1. The investment expense is deducted only as an itemized expense in line 22 of Schedule A, which the software ensures automatically.
I received the Tax Forms Guide the first part of March with a revision of the software. The flyer accompanying the Guide stated,
We appreciate your patience with our delay in getting this manual to you. There were so many changes this year that we had to delay our completion of the manual in order to get the software to you in a timely manner.... We hope that you can appreciate the demands on our time in automating the three new forms we added, the numerous new calculations for new credits, new types of IRAs, new reporting of capital gain distributions, etc.
The late revision to the software was necessary because of the complicated way the tax on IRA's is calculated. The previous version of this year's update allowed you to start working on your return and included instructions on how to work around the problem that was fixed in the revision received in March.
Movement through the program is very simple since the program is text-based. Rather than using your mouse to point and click, you simply press the appropriate navigation key. Escape backs you up through the menus, the arrow keys and/or the number keys move you into the menus. If you forget what key to press, press the question mark, and a simple help line is displayed at the bottom of the screen. If you need to add up some figures on a line, enter the '+' key and the first number. This causes the cursor to remain on the same line. Then press the operation you want to perform on the first number, '+', '-', '*', or '/' and then enter the second number, and the calculation is done for you.
There are basically two ways to approach the IRS forms you need to fill out in the package. Either pick the form you want to fill out and go directly to that form, or you can use the 1040 Road Map. When you choose the later method, you are first presented with the 1040 form. Some of the lines have blocks at the end of the text. These lines are automatically completed by the program and are automatically skipped as you move the cursor down the page. To the far right of some of the lines are 'w's' and 'r's'. The 'w' indicates that there is a worksheet built into the software that you should complete to arrive at the correct dollar amount for the indicated line. Pressing the 'i' key (for itemize) takes you to that worksheet. The 'r' indicates that an IRS form supports the line. Again, you press the 'i' key to go to that form. Once a form or a worksheet has been completed, the 'r' and 'w' change to 'i's' so you know you have decided that this line pertains to your situation, and you have supported the dollar figure that is automatically transferred from the form or worksheet to the line on the originating form.
When it comes time to print out your return, you have lots of choices. The IRS has been very particular in the past about what they receive. You must either submit their official forms, or forms that look very much like their forms. In the days of dot-matrix printers, Howardsoft was one of the companies that constantly worked with the IRS to get them to accept computer-printed forms. But they have always also offered the opportunity to use transparent overlay forms that you can put on a photocopier together with your printed output behind the overlay to make an acceptable photocopy reproduction of a completed form, which, once signed, the IRS would accept. Finally, Howardsoft also allows you to use laser printers with special tax fonts which the IRS will accept. I have never tried the copy machine or laser printer options. I have always just used my standard, every-day ImageWriter II. When you use this option, all of the forms are printed in a fashion acceptable to the IRS, all in the correct order for submission, except for the 1040 itself, which you have to fill out with good old pen and ink based on the facsimile 1040 printed by the program.
Installation on an Apple IIgs is simple. If you have a 3.5" disk drive, make a copy of the 3.5" disk that comes from Howardsoft, put the copy in your disk drive, double click on the TPSTART.SYSTEM icon and begin. If you have a hard drive, just create a folder to hold the files, copy all of the files from the 3.5" floppy over to the folder except for the ProDOS application and the System folder, double click on the TPSTART.SYSTEM icon and begin.
In subsequent years, when you receive your update disk, view the files in order by date both in the folder on the hard drive and on the floppy disk. Based on the modification date, select the new files from the floppy and drag them over to the folder on the hard drive.
The software includes a translation utility which takes the information from the previous year's return and completes a great deal of the information required for the new year. This includes not only your personal information, but also information about your income and depreciable property. It advances your age and the age of your property by one year, etc., giving you a starting point for the completion of this year's return. The program also automatically figures the effect on this year's taxes of the previous year's activity. Just as one example, if you are taking deductions for depreciation of business assets, the program will figure out if there is any life left in the asset, and if there is, calculate the depreciation that can be taken this year using the same criteria as the previous year and any adjustments that might be required as the result in a change in the tax law.
The challenge I took upon myself this year was to move the software off of my Apple IIgs, even though I didn't really need to, and put it on my PowerMac running Bernie II the Rescue, the Apple IIgs emulator from F.E. Systems. I expected to get, and did indeed get, a tremendous improvement in the speed with which the involved calculations are computed. Every time you complete a line, the form is recalculated, and any lines which result from automatic calculations are completed. This process never took an unreasonable length of time, but now that I am emulating the IIgs on my Mac, the speed is greatly improved.
Typical data input screen. Data is entered into the form on the right. Pressing the Escape key activates the navigation area on the left. The 'r' on the right side indicates that there is an IRS form available which can be used to generate the dollar amount to be entered on that line.
To print using Bernie II The Rescue, you need to go into Change Program Settings, Facsimile Printouts, and get rid of the initial setup characters and change the no. of line feeds needed per line to 0.
I have never used another tax preparation package, so I do not know how Howardsoft compares with, say, MacInTax. I have often wondered if you fed the same data to different tax preparation packages, if there would be significant differences among them. I do trust Howardsoft, however. This is because of the completeness of the package, the documentation that not only comes with the package, but that comes in the mail during the year, and the comprehensive way the company services its professional tax preparing customers.
Howardsoft now has a very helpful Internet site located at www.howardsoft.com. Here you will not only find information about the company, but also helpful hints on using the software, additional information about tax regulations, and links to the IRS and other sites pertaining to tax preparation. You can also receive customer support via email at the site. There are also Customer Service Memos which explain in depth certain difficult tax issues such as Roth IRAs, and how to use the software to properly handle these issues.
I will continue to use this excellent tax preparation software package as long as the company continues to make it. And now that I can emulate the Apple II on my PowerMac, I would say there is an even longer life expectancy for the software.
Name of Program: Tax Preparer
Name and address of Publisher:Howardsoft 7852 Ivanhoe Avenue La Jolla, CA 92037 Phone: 619 454-0121
Minimum Platform: IBM PC or Apple II with 64K RAM and 5.25" disk drive. Recommended Platform: IBM PC or Apple II with 256K RAM or hard drive and 3.25" disk drive
Price, Tax Preparer, regular edition, first time purchasers: $295
Annual update cost, regular edition: $99 plus $9 minimum shipping. Other products also available at additional cost.
Revised April 11, 1999 Lawrence I. Charters
Washington Apple Pi