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Monday, March 14, 2011

Things to look for in tax-preparation software

When looking for tax-preparation software a few things that can save you time and money may already be included in the software. Most online tax-preparation software is encrypted for data security which is an important feature in addition to user friendliness of the software. A complicated and difficult to use tax-preparation software can be cumbersome and contradicts the intended functionality of the software.

Good tax-preparation software also helps make tax filing easier by walking the tax filer through the tax return with ease. Additionally, some tax preparation software also comes respectably close to "doing it all" with regard to data security, online and telephone user support, online storage of information and transmission of tax information to the Internal Revenue Service.

Data security


Taxes involve detailed financial information and sensitive personal information making data safety an important feature of any tax preparation software. Data safety can be accomplished though file data encryption provided by the software itself and this secures the data from third party misuse. Also, if the software is online, firewall protection and online safety features are important.

Low cost and/or no fees


Some tax preparation software is literally free with the exception of a filing fee charged to a client for e-filing tax forms with the U.S. Internal Revenue Service. An example of this type of software is H&R Block's e-file software. The software is free to use but a fee is charged prior to submitting the tax return to the I.R.S. In some case, depending on one's income level, the Federal tax return may be free leaving only a fee for filing a State tax return.

User support services


A good tax preparation software will also have an accessible technical support staff who can answer user questions. In some cases, the software provider may also be able to provide some level of tax advice and guidance when filling out information on the forms. The quicker and more helpful the user support services are, the greater the commitment of the software provider is to the user.

Online database and storage


Another feature of tax-preparation software may include online storage of tax filing data for a certain amount of time. This can be useful if one is required to file amendments to the tax return at a later date or loses the tax file on one's personal computer. There should be no charge for this service as the cost can be incorporated in the price of the software or use of the software online.

Accommodation of complex tax filings


Tax filing can get quite complicated especially if one has multiple itemized deductions, capital gains, business expenses etc. A good tax filing software will allow for various levels of filing complexity. An example of this is Turbo taxes basic, deluxe and premier versions that can be downloaded or used online to e-file simple and more complicated tax returns. Some of the higher end versions also facilitated small business tax filing situations.

Ease of use and online processing speed


How user friendly the software is, is also an important feature of tax preparation software. The easy to use software applications will ask all the necessary questions and automatically walk the user through the tax return saving the data as one proceeds through the questions. If one is unable to finish all the questions at once, the software should be able to save the partially completed tax return at any time and return to the point that was left off.

Additionally, if the tax return is completed using online software, the processing time should ideally not be too slow. While this may also be a function of one's individual Internet connection speed, a good online software will not require too much download and processing capacity.

Tax preparation software can improve and facilitate the tax filing process. It is important to note the software can't answer all tax questions and one must have the right tax filing information to enter into the computer. The software should be able to do most if not all the adding and calculating for you and this helps guarantee the accuracy of the filing.

Online tax preparation software can also lead to expedited tax returns as soon as a couple of weeks. When considering tax-preparation software considering the items contained in this article can assist with choosing a software that will be helpful, effective and functional in the tax filing process.