Each year around March and April, millions of American citizens begin to fret over their taxes and how they’ll never get ready in time for Tax Day. The now overused image of a man and woman sitting at a kitchen table with receipts and papers scattered around them as they frantically work a calculator and scribble numbers on a pad of paper represents the frustration taxpayers feel as they try to figure out the complicated activity of filling out their tax returns.
Most often you’ll see this image in advertisements for professional tax return preparation services, such as H&R Block, or for tax return software preparation packages, such as those marketed as TurboTax and TaxACT. Obviously, the idea is that you, the frustrated and tax-weary consumer, will make use of these services to experience Tax Day in a less stressful way.
Professional Tax Returns
If you choose to go with a professional tax return preparation company, you’ll most likely have to pay a hefty fee for the service. After all, these are professional accountants, experts in their field, and their knowledge will come at a premium. Depending on the nature of your return and how complicated it is, you can pay quite a lot of money just in order to meet all the tax law requirements.
Advantages of Tax Return Software
For much less, around $50 or so, you can instead decide to go with a program like TurboTax, which will guide you through the tax return process in a pretty basic way. This is the software’s main advantage: it is relatively easy to use and it greatly simplifies the process so that anyone who is filing a standard return can understand what needs to be done. It uses these simple questions, such as questions about possible deductions and income, to fill out the return. Based on how you answer each question, the program will automatically insert those numbers into the return. It can also project a refund if applicable to the client’s situation. Add to that easy process a lower price than the professional services, and you have a great product.
Another great advantage of TurboTax and other programs like it is that these programs allow you to electronically file your tax return once you’ve completed the entire thing. Filing your return electronically removes a lot of the hassle of having to mail it and then wonder if it got there. You can confirm in minutes that the return was filed. This quick filing system will also help you get a refund much faster.
Disadvantages of Tax Return Software
For all these advantages, there are a few disadvantages to consider. One, for those who are confident in their knowledge of tax law, the questions that these kinds of programs prompt you to answer and the step-by-step way you proceed through the return can be a bit painful and slow. Likewise, these programs often come with attached fees. For example, in order to file electronically, you might be asked to pay a fee. And the programs themselves come in a variety of packages, some more expensive than others, which you’ll have to consider if you want access to, say, automatic error detection and both state and federal returns.
This is all to say that using a software package to prepare your taxes is a great idea, if you think it’s worth it to your tax situation. You should carefully shop for the right software package and compare all of your options before buying one. At the end of the day, going with a program to handle your taxes is a cost-effective bet, especially when you compare it to other tax preparation services.
This guest post is contributed by Barbara Jolie, who writes on the topics of online classes. She welcomes your comments at her email: barbara.jolie876@gmail.com.
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