Ihave been practicing public accounting in a Seattle suburb for some years. Around this time of year, that means I get a lot of calls from people who need to have a tax return prepared or some tax questions answered, in a word, they need some tax services, some tax help in the form of tax preparation or advice on tax software.

One of the most common questions about tax software and tax preparation is, "Can use something like TurboTax (from Intuit) or Tax Cut (from H & R Block)?"

The Case for Tax Software

What are my usual recommendations on tax preparation with the help of tax services? Of course, most people can and should use a tax software program like TurboTax, it is a rather reliable tax software. If you have some computer experience you can use such tax software programs, because they are easy to use and can help you in preparation of your tax return.

But don't forget that by using this tax software you can easily catch lots of errors. One more thing: they can easily handle the most common, ordinary tax preparation questions or problems that you like an individual tax payer are likely to come across.

What's more, the price of tax software is right. Don't forget that tax return preparation fees are different in every region and depend a lot on the skill of the tax accountant. Let me give you an example: when I agree to give tax help, I personally charge about $450 for a typical individual tax return.

If we speak about the price of tax preparation software, you can often find it selling for between $25 and $50. If compared to an accountant who is ready to render you tax services, that's an enormous savings!

Are There Any Exceptions to the Rule when You Should Use Tax Software?

In my opinion, in some special cases, tax software isn't a good choice. If you ask me, I would recommend people not to use tax software and spend the extra money on a good enrolled agent or certified public accountant in the following situations:

Special Situation #1: When you prepare your tax return, you've got carry-forwards such important things like capital losses, alternative minimum taxes, or passive suspended losses in order to

In each of these cases, in order to prepare your year's tax return, you have to take data from previous year's tax returns. As a rule, accountants and professional tax software like your accountant uses track these carry-forward items with great care.

As you know, a lot of tax payers don't know which items exactly they have to carry forward. But TurboTax and Tax Cut, incidentally, do know. And as long as you keep using the same tax software on the same computer, it will be okay.

However, you must remember to transfer your tax data if you get a new computer or if you fail the file transfer, you could lose thousands of dollars of tax savings.

Special Situation #2: There is more than one tax return for you to prepare. Take for example, the case when you have to prepare a business tax return (corporation, Limited Liability Company or partnership return) and your individual tax return.

In the given circumstances, you should take into account the business tax return when you prepare the individual return. And vice versa-you have to take into account the individual tax return when you prepare the business tax return.

But mind you, despite being a great tax help, the tax software programs don't know if you're preparing one tax return or several tax returns. And that lack of insight means that tax software can't be recommended as a tax accounting choice that can let you reduce or minimize the taxes you have to pay on another return.

If you compare the situation with a good accountant's performance, you'll understand that s/he will consider your individual tax liability as he or she usually makes accounting choices on your business tax return. The accountant, for example, will not disregard your individual tax bill when depreciation methods are selected on the business tax return.