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The Pros and Cons of Tax Preparation Software
There's a lot of tax preparation software in today's market. But why bother procuring one when you can do it with a simple pen and paper.
Here's a quick rundown of the advantages and disadvantages of using tax preparation software.
Pros: It's easier to enter the data since most tax preparation software comes in four levels of guidance covering simple 1040 EZ form returns to the more complex. The required information is asked and instantly filled out on the right schedules and supplemental forms.
Tax preparation can be stored on your computer as well as other storage media which enables your tax preparation to be filed through the IRS E-file for free or at less cost by a specific tax preparation software package and registered e-file provider. This can also give you a refund that only takes 8 days. You can then save multiple copies which is good in case of technical crash or machine bogdown.
Printed out files look more organized and prevents it from becoming hard to understand.
The cost of Tax preparation software is part of the Job Expenses and Miscellaneous expenses. If 2% of your Adjusted Gross Income is less than the number under Job Expenses and Miscellaneous expenses, it can be deducted but just the same, seek the advice of an accredited Tax Preparer or CPA.
There's a lot more of savings you would gain when using a tax preparation software rather than hiring an Taxation professional.
Benefits: It seems overkill to use software for filing simple returns. The more complex returns still need to be double checked with a CPA or accredited Tax Preparer if current tax codes that apply to you have changed since the last time you filed your taxes.
Features such as importing investments that come up with the program can be challenging and are sometimes not up to date with current tax codes regarding differences in investments.
The same as Pro #4, but if 2% of your Adjusted Gross Income is GREATER than the number under Job Expenses and Miscellaneous expenses, it is NOT deductible but to make sure, you should still consult an accredited Tax Preparer or CPA.
Software concerns created with the help of taxation experts are not really that recent and will only be updated with a newer version.
Now that you have understood the pros and cons, you can choose if using tax preparation software can help or not.