Why You Should Use a Tax Preparation Software
If your tax situation is complicated or you have your own small business, getting professional accountants and fully-trained and licensed tax preparers to assist you every April seems the best thing to do. However, you may need to ready your wallets because getting your personal accountant will cost you.
If it has become a matter of breaking the bank or filing your taxes until your mind is half-gone, think again. There’s a third option that you might have overlooked.
The abundance of tax preparation software available on the market will make you think twice before shelling out a large amount of money. A tax preparation software can get you the same tax return results as a CPA would, and maybe even with more efficiency.
Benefits of Using a Tax Preparation Software
1. It’s the most cost-efficient option for preparing and filing your tax returns
Regardless of the complexity of your tax situation, you can still opt to go for a tax preparation software because most offer a variety of services that fit different tax situations. It can handle different levels of difficulties using appropriate software features.
As long as you provide accurate information, it’s almost foolproof. It takes care of your taxes the same way a tax professional would, sans the personal interaction.
There are free tax software available for simple tax returns, but even if you have to pay for the service, the price is still below what you would usually be charged for CPA assistance. More complex tax situations require more information and more forms, so you would often need to purchase paid versions.
But what’s great about using tax software is you are charged depending on your tax situation. You can save on all the unnecessary costs for tax professionals. And you still get the same accuracy that you would from a CPA for a fraction of the cost.
2. It’s easy to use
Tax preparation software usually has a friendly interface that makes navigation easy for the user. It’s better to read on the different offers of each tax software, so you know what you will be getting. You don’t even have to be tech-savvy.
All you need is a PC or laptop and internet connection to get your tax preparation started. You can work comfortably whenever, wherever.
You can download it on your desktop and use your browser to complete your taxes. You don’t even have to complete your return in one sitting- you can save it and come back to it when you get the time. Tax software saves you time as there are available federal and state tax filing options.
3. Convenient. You can complete, file, and track your return all from your computer
Most software also usually have other compatibilities such as importing different forms from your computer, from other websites, or even from other competitor software.
You get a user-friendly interface that sends notifications regarding the progress of your filing. And instead of computing taxes by hand, you can skip all the complicated calculations and let the software do it for you.
It’s usually an interview-type kind of guide where the user answers a series of questions and the software uses the information to complete your return. LocusTax provides an easy questionnaire to get all the essential information to determine your appropriate returns.
4. You won’t miss out on deductions and credits
These tax preparation software were made very carefully and meticulously. When you prepare your taxes, you might miss out on applicable credits and deductions, especially with all the new changes brought about by the Tax Cuts and Jobs Act signed into law last December 2017.
With a tax preparation software, you don’t necessarily need to know the tax code section by section. Your information will prompt the software of your tax situation and direct you to the right forms to get the right credits and deductions. You can maximize your credits and deductions because tax software like Locustax has different service features that are suited for your specific tax situation.
5. You can avoid costly errors
You can avoid audits with the help of reliable tax software.
Most of tax prep software offer technical and audit assistance for free or for a minimal charge. Some even provide audit representation should you need it, and still for a price lower than a CPA. Though technically, you prepare your taxes on your own, you can even get help beyond the features of the software itself.
Things to consider when choosing the right software for you:
1.Your familiarity with taxes and tax software
Whether you’re a newbie or an expert, you need to find tax software that you can navigate with ease. Also, take into consideration your familiarity with the tax code. Some software is friendlier than others, while some others require that the user have some background on the tax laws.
2. Which version do you need?
Assess your tax situation and determine whether you are good to go with the basic version or if you might need to purchase a more expensive one. It depends on what taxes you need to file. Although there are free versions that can be used to complete your tax returns, sometimes it’s not enough for a more complicated tax situation.
However, tax software such as LocusTax allows the users to start their tax returns for free. As they go on to provide more information and the software detects that it’s more than a simple tax return, they may be advised to purchase the paid versions. There are certain forms and features that are only provided for in versions that you need to buy.
Do you need audit assistance? How about audit representation? Do you want to be able to save your files on your desktop or do you want to keep it online using the browser? Do you need to import other forms or documents? Do you want available in-person consultation? What you’re looking for is the convenience that software can offer you. Read about the features and see which one has the best offers for your needs.
Prices can range from free to $100. After getting an idea of your tax situation and the features you need for your returns, ask yourself: How much are you willing to shell out?
There may be several softwares offering the same features at different prices, so it’s up to you to decide how much you want to shell out.
And again, tax preparation software cost way cheaper than a CPA. So, don’t be intimidated with the prices for paid versions. You’re sure to get your money’s worth. Even when you need to pay to get audit assistance and audit representation, you’re still below the usual budget for a licensed tax preparer.
It pays to be patient in researching the different tax preparation software available. This way, you can be sure you’re getting the best software for your tax situation and your level of familiarity. You can do this by exploring their websites, or by reading other blogs that give a comprehensive review of the different tax software before you choose.