Helping You Choose The Best Tax Softare

If your tax return has gotten more complicated, it is probably time to turn to professional tax software. It may be easy to file out a simple 1040 return, but once you start to have children, buy a home, or own your own business, taxes become much harder to fill out.

The professional tax software is basically the same software that a tax professional would use to do your taxes. However, instead of paying an employee of a tax firm to ask you questions, you allow the professional tax software to ask you questions for free. It will ask you questions like what is your social security number, were you or your spouse blind last year, do you have any dependents, and many other questions that you will be able to easily answer. Of course to answer the questions of the professional tax software, you should consult your W-2′s and any other relevant documents so be sure to have those at hand before you begin the process.

Professional Tax Software Options

There are a number of companies that offer professional tax software, and they will also file your taxes for you. You can usually submit your taxes electronically with an electronic signature. Sometimes, to verify that it is really you, the software will ask you a hard question like what was your taxable income last year. However, there are some tax returns that cannot be submitted electronically. In those cases, the program will advise you to print out the form, and you will be able to print a form that is perfectly filled out. After that, you only need to sign it and send it to the IRS in an envelope.

The process is simple, relatively cheap, and sometimes even free when you use one of the many professional tax software programs available in stores and online.

Using income tax software is one of the best ways to prepare one’s taxes. This type of software will not only provide necessary forms that need to be filed with the government, it can electronically file, provide answers to common questions, and some even offer live support or audit support for additional fees. Most stores including Wal-Mart, Staples and Target will carry at least one or two options for income tax software.

Income Tax Software Saves Time!

Income tax software can guide a user through the mire of trying to understand their various W-2’s, 1099’s and other income statements they’ve received. Most programs will ask simple questions to ensure a person includes all information and fills out correct forms. It will also help obtain the largest refund allowed by making sure all eligible deductions are taken. The income tax software will prompt a person to find out if they have had a child, paid school expenses, purchased a house or even made “green” renovations to their home, all things that will often lead to tax deductions and additional credits. By asking leading questions, the program will help a person get deductions that they may not have even known existed.

Some income tax software will also help the user get their refund faster by filing electronically. By e-filing, the processing time is far less than the traditional filing method of printing forms and mailing to the IRS. If the user chooses to have the refund directly deposited into their bank account, they can receive their money in as little as a week. The income tax software will usually cost about fifty dollars, but can be claimed on a tax return as tax preparation fees. Some companies will even offer an allowance for their employees to purchase this type of software, making the costs even lower. Even if this income tax software cannot find additional deductions, the ease of automatically filling in the forms and saving a copy is definitely worth the cost.

You are new to the tax preparation field. You have your degree in accounting, maybe even a masters degree. You have been prepped on the most current tax laws, may even have passed a state-required certification process to prepare taxes, and are ready to open your own practice. Now the real question: What software should I use for my tax preparation?

In a competitive world, a hand-prepared return is not only passive, it is downright non-productive. Tax software increases the speed and ability to process returns while increasing accuracy at the same time.

Nevertheless, the differences are strong and numerous in the type of software that can be purchased over the counter at your local store, and the type sold at society and industry trade shows and in their respective trade journals. In addition, unbelievably, some ‘professional’ preparers start their practice with these low-end, over-the-counter software products.

Some long-standing, brand name programs are available at many supermarkets and office supply stores with a price range from $30 to $50. BE AWARE: these products are designed for simple returns, have limited, or no flexibility, and are designed for the average person who does not need hand holding. In short, they are not made for professionals who work with complex situations.

Professional packages may run the gamut of a limited use product to unlimited 1040 system use, to business and state programs, and will run from $400 to $10,000 per year. Is the high price worth it?

I recall talking to a CPA a few years ago who said her neighbor brought over the family’s tax return that they’d prepared on a store boxed product, then wondered if she might simply check it for errors before they submitted it to the IRS. The CPA ran the return scenario through her own, more professional program and proudly noted she had calculated an extra $3,000 for refund this family was planning to receive.

Why the big difference? Over-the-counter programs are progressively getting better at finding and alerting the user to available credits and benefits. However, these programs do not have the empirical wisdom of human expertise and evaluation, nor do they have the depth of utilities available in professional software. YOU, the professional, have the advantage.

You are in an industry that intimidates the average soul. In addition, this may be one area where the old adage: You get what you pay for, hits the bull’s eye. Professional programs can easily spot non-claimed credits, errors, or obstacles that simply are not programmed into the low-end, store boxed products.

Moreover, a professional program is packed with utilities to do just that ‘ assist the tax practitioner with increasingly complex computations. Most professional packages include:

* An integrated Asset Manager. Some even perform like-kind exchanges, partial dispositions, and have management tools to track basis, depreciation, and a host of related information.

* More sophisticated Audits. This more intensive audit programming can suggest alternatives to even the most confusing issues.

* Tax Practice Management. This critical program can categorize and analyze the various types of returns processed, amounts of income invoiced, help create client organizers, and track client trends and pertinent return information.

* A Scheduler program; which helps the practitioner maintain the tight schedule necessary during the short 1040 individual filing season.

* Comprehensive Libraries; which may include Zip Code directories, and customized employer directories which auto-fill to specific forms and schedules.

* The ability to key in Overrides. A viable part of the professional package; making overrides in program entry fields may be needed when alternative calculations become necessary.

* Toll-free support. Usually these free services come with the purchase of the professional program.

* Detail statements. These statements usually comprise more detailed information regarding a line item entry. Such statements may break out the total into multiple items, or can provide information that might otherwise raise an eyebrow or two at the IRS without such an explanation.

Of late, another member has been muscling into the domain of professional practitioners; online tax prep. Though these too are gaining in popularity, the issue of return access, re-access, or amending is something to consider. As with the over-the-counter programs, these online products may also be limited in the scope and complexity of returns they can handle.

One question that often comes from those not familiar with professional software however is “Why do I need an EFIN (electronic filer identification number) from the IRS to file returns electronically?” My store bought package did not require one.

Since the over-the-counter programs limit the user, input and do not allow overrides, the vendors (software manufacturers) takes responsibility and liability for the accuracy of the return. The IRS allows purchasers of store bought products to file up to five returns with this software without having an IRS assigned EFIN.

Because of the flexibility of professional software in overrides, detail statements, and overall user knowledge of the tax law allowed to manipulate the program, the IRS requires the user to apply for their own EFIN (submission of IRS form 8633).

Simply put, if you ARE a paid professional tax practitioner using an over-the-counter program, you are not only harming the accuracy of your client’s return, you may be harming your own reputation. The costs are certainly higher, but putting out the extra bucks will pay for itself in the number of clients you obtain and retain.

Molly Winters-Hughes is a marketing consultant for TaxWorks. TaxWorks offers professional tax software and solutions for accountants. For more information about TaxWorks, see http://www.taxworks.com

Article Source: What Do You Need? The Right Tax Software – ArticleSpan.com

Tax season can take its toll on tax preparers and individuals scrambling to decipher all of the forms and rules and regulations set out by the IRS. With changes to laws and calculations each year, how is one to stay up to date on the latest and greatest? The answer: Tax Preparation Software.

There are several types of Tax Preparation software on the market. There are packages for individuals and CPA’s and a number of online sites to help walk you through the tax preparation process. Tax preparation software can save hours on your tax return prep time.

With features, such as built in audits, that alert you of critical calculation errors and missing information. Asset management utilities can make keeping track of assets a breeze. Refund calculators can give you a quick refund estimate while inputting just a few items.

Many of the packages built for use by CPA firms have features such as client organizers. These packets can be printed and sent out to clients to have them write down critical information and to help remind them to bring certain necessary forms and information to the actual tax prep appointment. Custom letters can allow you to print a custom letter for each client or a list of clients.

New advances in technology allow you to Electronically File your return (E-file). E-filing your return can be very beneficial for several reasons. First, the IRS will receive your return much quicker. Second, the IRS is able to process e-filed returns much quicker due to the electronic format of the tax information.

How can you benefit from e-filing? Quicker processing equals quicker refund return. In fact, E-file has become so popular that several different software packages are offering E-file for free. Benefits of e-filing are:

* Fast – No more driving to the post office or waiting for the mail.
* Accurate – The program checks for errors and missing information so you don’t have to.
* Easy – TaxWorks offers an intuitive, step-by-step process for e-filing returns, and allows you to e-file multiple state and federal returns at the same time.
* Quicker Refunds – Cut your processing time in half and receive your refund in half the time, too!
* Peace of Mind – The IRS acknowledges receipt of the tax return, eliminating any worry that the return was lost. Check Your Refund
* Payment Options – When you e-file your return, you can pay the balance due at any time during the filing season, whether it’s January 15th or April 15th. You can also pay electronically by credit card or electronic funds withdrawal.

Whether you are looking for personal tax return software packages, or large packages geared more towards a CPA firm, these new advances in tax preparation software are sure to take the worry and stress out of your tax season this year.

Molly Winters-Hughes writes articles to help people in filing their taxes. Taxes can be stressful, but the key is understanding them and the people who can help you do your taxes. To find help for doing your taxes with the tax professionals online at TaxWorks.com Get your taxes done today!

Article Source: Take The Pain Out Tax Season With Advancements In Tax Software – ArticleSpan.com