Best Tax Software?

It is tax time and, like most people, you are probably scrambling to get your paperwork in order for your CPA. Probably feeling a little frazzled with this last year and looking for a few ways to cut corners. One way you can do this is to use the best income tax software program instead of your CPA. With the most basic of returns, this would be a good choice.

By simple, I mean you are single, employed with a company that pays your taxes, no outside second job or business, you rent and probably are making car payments, and your income is under $30,000.00 a year. Stimulus incentives are probably your biggest question mark.

If you are this person, then I would recommend a tax filing software system like Turbo Tax to you as a best personal tax software. You also have the option of the quick filing returns with the local tax processors like a bevy of those guys you see on every other commercial at tax season.

Why should you use Turbo Tax?  Well . . . , according to Turbo Tax it's for these six simple reasons:

1.       You'll get the biggest refund - guaranteed! *(*Disclaimer - "*If you get a larger refund or smaller tax due from another tax preparation method, we’ll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.95 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/10. E-file, Audit Defense, Professional Review, Ask a Tax Expert, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee.")

2.       It is EASY - They use plain English questions to ask you simple information about your returns

3.       You are NEVER ALONE - They have a support system set-up that helps answer your questions and take the mystery out of tax filing for you.

4.       Audit Risk is reduced - They have a built in audit risk thermometer that helps you determine if your expenses may seem out of proportion by alerting you that you need to look again at that particular item.

5.       Rated #1 - Turbo Tax boasts a #1 rating in the best tax filing software sales consistently each year.

6.       Safe & Secure - Your personal and business information is protected by tested and secure online systems in place.

Reasons I Would NOT Use Turbo Tax:

1. There really is no guarantee that you are organized and efficient enough to meet the disclaimer guidelines and deadlines on the refund policy as it is stated. They would go broke if that were the case - truly, just think about it.
2. It's Easy - Since when has tax code ever been easy? Most people use plain English when it comes to asking and answering questions - especially a good CPA, because they know that your likelihood of being audited depends on their clear understanding of what you want and hope to accomplish with your personal and business goals. They also know that, in the event of an audit, that they will be required to explain the thinking behind the line item in question.
3. You are never ALONE. No CPA worth their weight would EVER abandon you in an audit situation unless you are a liar and a cheat and they don't find out until late in the game. Most will either go with you or go on your behalf. Turbo Tax offers the same service. Both turbo tax and a CPA will charge you for this extra service.
4. If anything changes on your return you will need to file an amended return. You'll need to submit these amended forms on paper, not electronically. You typically have 3 years to file an amended return within your original filing date - assuming all taxes are paid and due, if all taxes are not paid in full then your limit for filing an amended return is shortened from a three year window to two years.
5. Your audit risk is reduced. That is simply a false statement. An audit risk is calculated on a year by year accumulation basis by the IRS. You may think you are getting away with writing off holidays as business travel this year because you got away with it last year. Wrong. the IRS uses a point system when it comes to calculating tax audits. Their threshold may be 100 points on travel and maybe you came in at 99 points - this year. Next year, you will go over the points threshold and they will want to know about the year before too. That's when you get the audit.
6. With Turbo Tax, You can talk to a tax professional with the Ask a Tax Expert service, have your return reviewed by a professional, or purchase Audit Defense coverage so that you are professionally represented in the event of an audit. If you are concerned about preparing your own return, these extra services will cost you money. Keep in mind that any company that has developed a thorough audit department does so because they are in a lot of audits. Hmmmm . . .
7. With your CPA, you can talk to a tax professional who will give you expert tax advice in person, on the phone or by email. They will also represent and defend you in the event of an audit. They will not go to jail for you. Nobody will.
8. Turbo Tax says they are rated #1 in tax software sales and consider themselves to be the best tax software in town. There is no doubt that they offer an unlimited level of information on tax issues and subjects that you can also get by visiting the irs.gov website. Irs.gov even has their own IRS youtube channel with over 65 relevant videos (plus text) on tax filing tips.
9. Safe and secure online filing - Yes, So does your CPA.

So, for me, when I think of the best tax software, I think of the one that my CPA uses to process my tax returns. I take into consideration that he goes to school every year to stay current on information to help his clients with their business and personal finances and I marvel at how he can go over financial information and eyeball the things that will help his clients to save money, and help them to engage in profitable business practices, or identify problem areas.

Turbo Tax is great for some. It is a good product for what it offers. My recommendation for anyone with a business - large or small - is to go talk to a good CPA about your business, and make up your own mind.

The best income tax software isn't always the "Free" one that brags about how it saves you money.

Sometimes, the best tax return software is just a cup of hot coffee with a good CPA.

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