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“Early Bird” Specials ... 20% off until June 15th

Early Bird

It may not be the first thing on your mind now that your tax practice consists only of extension returns, but there’s good reason to plan ahead. We’re getting ready for the biggest tax season yet with more e-file support and more Windows features. And you can get it all at our best prices of the year if you order now: 20% off all Standard Level and Premium Level products, including discounted e-file upgrades for high-volume filers. Order securely over the internet, or phone, fax, or mail us. We accept all major credit cards. There’s no better time to get ready for next year.

by HowardSoft®
Professional software at personal prices.
Spring 2005

IRS e-file logo

goes mainstream

It’s no longer a novelty. More than 50% of all individual returns were e-filed this year! That means that if you aren’t offering e-file to your customers, you’re missing the competitive boat ... and it won’t get any better! Congress has mandated that the IRS expand their e-file program so that 80% of all individual returns will be e-filed by 2007. So now is the time to join the e-file trend the painless way ... with HowardSoft’s Tax Preparer.

It’s easy to join. Once you’ve ordered Tax Pre- parer (Standard or Premium Level), you’re half- way there ... and we guide you the rest of the way:

  • We’ll help you complete Form 8633 (available on our web site or by mail from us) to get your IRS Electronic Filing Identification Num- ber (EFIN).
  • Once you receive your EFIN, we’ll register you to use our transmission software and sign you up for bank products.
  • Once you receive our software (by mid- January, when the IRS first accepts e-file re- turns), we’ll help you transmit some test re- turns to make sure you’re ready for real.

It’s that easy, and you’re ready to transmit as few or as many returns as you want from mid-January through mid-October, 2006.

You can still print graphic forms. Even though the IRS sees only the electronic file, you can still print returns for your clients with the familiar look of the IRS forms. And you always have the choice of filing the graphic forms with the IRS instead of e- filing the return, because full Windows-graphic printing is built-in as well.

Top 10 reasons to e-file with Tax Preparer:

  • 1. Unlimited e-file – FREE and built-in. You don’t have to turn away customers who want their returns e-filed because e-file is built into all Standard Level and Premium Level CD-ROMs at no additional cost. It’s easy to sign up, and we’ll help you with the process so you can get set up as easily as possible.
  • 2. e-file as easy as printing. You just generate e- file output from our Print Menu then import the output to the transmission software that we provide. Once you’re connected to the internet, you can transmit to the IRS and get acknowledgements on-line. It’s that easy!
  • 3. Transmission fees lower than ever. The FREE e-file that’s included with all Standard Level and Premium Level CD-ROMs now lets you e- file for just $5.95 per federal return without having to purchase anything else.
  • 4. No transmission fee for e-file Platinum. If you expect to e-file at least a hundred returns next year, you’ll benefit from our e-file upgrade that lets you file as many returns as you want without a transmission fee.
  • 5. Personal customer service for fastest response. We don’t make you go-it-alone with the cryptic messages you get from the IRS. We give you immediate personal help so you can resubmit rejected returns quickly.
  • 6. Software updates at lightning speed. While the IRS makes changes in their e-file specifications during the tax season, HowardSoft responds with software changes that you can get over the internet within hours. No big-company bureaucracy here to slow us down!
  • 7. Fast help with the all your returns. Whether it’s a complex decedent return or a simple EIC return, we help you get it through the restrictive IRS e-file formats by phone, e-mail, or internet. In some cases we’ll even change our software to help you with unusual returns that aren’t immediately accepted by the IRS. You can’t get that kind of help anywhere else!
  • 8. Fewer IRS notices to your clients. Because you get immediate feedback from the IRS on issues that your client would have to handle months later, you can avert IRS notices to your clients on such problems as erroneous SSNs, missing data, and mistyped names.
  • 9. Banking products for easier collection. We offer a full range of banking products, including Refund Anticipation Loans (RALs) for your clients and automatic deduction of your fee from your client’s refund.
  • 10. Confirmed receipt by the IRS. There’s no risk of penalty for a return lost in the mail. You get confirmation of acceptance by the IRS within days.

NEW: A web site for your tax practice!

We now offer a product that can help you build a presence on the web, collect information from your clients, and manage your practice. Customized for tax professionals, the package includes a website template, web hosting, domain name registration, business e-mail accounts, on-line client interviewer, and on-line scheduling. Call us for pricing and more information at (858) 454-0121. You’ll be surprised how much is done for you!

What Congress has in store for you

After two major tax bills signed into law just before the election last year, you can expect this year to pale by com- parison. While taxes are still on the mind of most legisla- tors, the only bills likely to be passed are those that extend provisions slated to expire after this year. But for tax year 2005 there is no significant tax legislation on the books. Instead, you can look for legislation that will provide relief in future years through:

  • Continued itemized deduction for state and local sales tax. Although set to expire after tax year 2005, we ex- pect it to be extended another two years.
  • Minimum tax relief through indexing. Even though eve- ryone is complaining about the alternative minimum tax, it’s unlikely that any major change will take place because the current law is just too lucrative for the government. Instead, expect some minor relief through higher exemptions and fewer preferences.
  • Continued credit for retirement savings. The credit for low-income filers who contribute to an IRA or pension (Form 8880) is set to expire in 2007, but you can ex- pect it to be extended through 2010.
  • Renewal of 15% maximum capital gains tax. The 15% top rate on capital gains and qualified dividends is set to expire in 2009, but you can expect it to be retained through the end of 2010.
  • Renewal of special credits and deductions. Credits and deductions set to expire after 2005 include the teach- ers’ allowance, R&D credit, work opportunity credit, and welfare-to-work credit, but you can expect them to be renewed for at least another year.

What the IRS has in store for you

Even without a new tax bill, there is plenty that will change because of previous legislation. Many provisions of the bills that passed last year take effect for the first time in tax year 2005, and there are several scheduled changes from prior bills as well. Nevertheless, the IRS is in good shape to complete most forms well before the next tax season starts. In fact, as of May 12th the IRS had already released advance drafts of 20 of the forms we support! Here’s what we already know from these advance drafts and the legisla- tion that is already in effect:

  • A jump in standard mileage rates. The standard deduc- tion for business mileage will be 40½ cents per mile, up from 37½ cents per mile. Not surprisingly, this is the biggest one-year jump in history. (The standard de- duction for medical or moving expenses will be 15 cents per mile, up from 14 cents per mile. The rate for charitable use will remain at 14 cents per mile.)
  • Special depreciation allowance no longer available. The bonus depreciation of 30% or 50% of the cost of new property is no longer available. This windfall expired at the end of 2004, with no legislation to extend it.
  • Uniform definition of a child. This change is long over- due! Last year’s legislation eliminated the inconsisten- cies in the meaning of “qualified child” among a variety of benefits starting in 2005: the exemption for depend- ents, head of household filing status, child tax credit, child and dependent care credit (Form 2441), and earned income credit (Schedule EIC).
  • A jump in the maximum IRA deduction. The maximum deduction for each taxpayer will be $4,000, up from $3,000 for 2004, and $500 higher if age 50 or more.
  • IRA phaseout thresholds rise. The levels at which the phaseout of IRA deductions start will take another jump that exceeds inflation. The phaseout level for taxpayers covered at work will start at $70,000 for married filing jointly and qualifying widow(er) and $50,000 for single or head of household, each $5,000 than for 2004. (As before, no deduction is allowed for income $10,000 higher than the start of the phaseout.)
  • Deduction for domestic production. A new deduction of up to 3% of the qualifying income will be available for a variety of activities performed in the United States. The IRS has not yet revealed how this broad provision will be implemented on the forms, but it represents a significant change for many businesses.
  • Car donations restricted. Although it is not clear whether Form 8283 or Schedule A will be redesigned to reflect it, your charitable deduction for a donated car will be limited if the donee sells the car rather than us- ing it. The deduction is limited to the gross proceeds from the sale.
  • Standard deductions rise. The standard deduction will rise as a result of the usual indexing with inflation. The new standard deductions are $5,000 for single and married filing separately, $10,000 for married filing jointly, and $7,300 for head of household. The deduc- tion is increased by $1,000 ($1,250 if single or head of household) for each taxpayer who is blind or age 65 or older.
  • Earned income credit rises. The EIC will also rise as a result of the usual indexing with inflation. You may now have a credit for income as high as $37,263 with qualifying children, and $13,750 without.
  • Social security base rises. The maximum wage subject to social security tax will be $90,000 for 2005, up from $87,900. The tax rates are unchanged.

As far as the forms go, very little is changing. Instead, most of the changes will be reflected in the IRS instructions and publications, continuing the IRS trend to make the forms appear simple through added complications in the underlying instructions. This will place an added burden on those who prepare returns manually to notice changes in the instructions and perform more complex calculations than the forms imply. By contrast, the changes will be automated in Tax Preparer, including some of the most ob- scure changes hidden in infrequently read IRS publications, so you’ll hardly notice any difference in how you prepare returns!

Quick answers? Fast ordering? Go to

Remember that our web site is open 24/7 and has a wealth of information you can’t find anywhere else. You can order over our secure site with a credit card, get details on our products, and even track the progress of the IRS in their design and release of forms for next year! And we have helpful links to the IRS and state sites!