You are new to the tax preparation field. You have your degree in accounting, maybe even a masters degree. You have been prepped on the most current tax laws, may even have passed a state-required certification process to prepare taxes, and are ready to open your own practice. Now the real question: What software should I use for my tax preparation?
In a competitive world, a hand-prepared return is not only passive, it is downright non-productive. Tax software increases the speed and ability to process returns while increasing accuracy at the same time.
Nevertheless, the differences are strong and numerous in the type of software that can be purchased over the counter at your local store, and the type sold at society and industry trade shows and in their respective trade journals. In addition, unbelievably, some ‘professional’ preparers start their practice with these low-end, over-the-counter software products.
Some long-standing, brand name programs are available at many supermarkets and office supply stores with a price range from $30 to $50. BE AWARE: these products are designed for simple returns, have limited, or no flexibility, and are designed for the average person who does not need hand holding. In short, they are not made for professionals who work with complex situations.
Professional packages may run the gamut of a limited use product to unlimited 1040 system use, to business and state programs, and will run from $400 to $10,000 per year. Is the high price worth it?
I recall talking to a CPA a few years ago who said her neighbor brought over the family’s tax return that they’d prepared on a store boxed product, then wondered if she might simply check it for errors before they submitted it to the IRS. The CPA ran the return scenario through her own, more professional program and proudly noted she had calculated an extra $3,000 for refund this family was planning to receive.
Why the big difference? Over-the-counter programs are progressively getting better at finding and alerting the user to available credits and benefits. However, these programs do not have the empirical wisdom of human expertise and evaluation, nor do they have the depth of utilities available in professional software. YOU, the professional, have the advantage.
You are in an industry that intimidates the average soul. In addition, this may be one area where the old adage: You get what you pay for, hits the bull’s eye. Professional programs can easily spot non-claimed credits, errors, or obstacles that simply are not programmed into the low-end, store boxed products.
Moreover, a professional program is packed with utilities to do just that ‘ assist the tax practitioner with increasingly complex computations. Most professional packages include:
* An integrated Asset Manager. Some even perform like-kind exchanges, partial dispositions, and have management tools to track basis, depreciation, and a host of related information.
* More sophisticated Audits. This more intensive audit programming can suggest alternatives to even the most confusing issues.
* Tax Practice Management. This critical program can categorize and analyze the various types of returns processed, amounts of income invoiced, help create client organizers, and track client trends and pertinent return information.
* A Scheduler program; which helps the practitioner maintain the tight schedule necessary during the short 1040 individual filing season.
* Comprehensive Libraries; which may include Zip Code directories, and customized employer directories which auto-fill to specific forms and schedules.
* The ability to key in Overrides. A viable part of the professional package; making overrides in program entry fields may be needed when alternative calculations become necessary.
* Toll-free support. Usually these free services come with the purchase of the professional program.
* Detail statements. These statements usually comprise more detailed information regarding a line item entry. Such statements may break out the total into multiple items, or can provide information that might otherwise raise an eyebrow or two at the IRS without such an explanation.
Of late, another member has been muscling into the domain of professional practitioners; online tax prep. Though these too are gaining in popularity, the issue of return access, re-access, or amending is something to consider. As with the over-the-counter programs, these online products may also be limited in the scope and complexity of returns they can handle.
One question that often comes from those not familiar with professional software however is “Why do I need an EFIN (electronic filer identification number) from the IRS to file returns electronically?” My store bought package did not require one.
Since the over-the-counter programs limit the user, input and do not allow overrides, the vendors (software manufacturers) takes responsibility and liability for the accuracy of the return. The IRS allows purchasers of store bought products to file up to five returns with this software without having an IRS assigned EFIN.
Because of the flexibility of professional software in overrides, detail statements, and overall user knowledge of the tax law allowed to manipulate the program, the IRS requires the user to apply for their own EFIN (submission of IRS form 8633).
Simply put, if you ARE a paid professional tax practitioner using an over-the-counter program, you are not only harming the accuracy of your client’s return, you may be harming your own reputation. The costs are certainly higher, but putting out the extra bucks will pay for itself in the number of clients you obtain and retain.

Tax preparation software has become increasingly popular over the past few years. As a result paid preparers are becoming more expensive which in turn increases the number of people in search of tax preparation software! Anyone in need of a perfect Catch 22 scenario can feel free to quote my last sentence! Those hesitant to use the software often fear making mistakes. A mistake in either direction can be costly. A mistake in the governments favor can cost you monetarily. A mistake in your own favor can cause an audit and in turn cost you monetarily. I offer the following guidelines as a safe approach to your tax management.

Tax professionals are in the zone. They think, eat and breathe taxes for at least a few months a year and see a variety of scenarios. Therefore, it stands to reason that they may be more sensitive to economic and situational indicators that have an effect on your tax return preparation. Asking the right questions is key. As a general rule I would (and do) sit with a tax professional in any year that there is a significant change. These changes include a dramatic increase or decrease in income, a marriage, a birth or an adoption of a child (especially adoption, due to associated costs being deductible), a change in a business loss or gain status, the selling or buying of a home, etc.

Once your situation plateaus tax preparation software is a less expensive alternative. This method requires a little more work on your part, however. Rather than having your preparer ask you the questions, you will have to read the questions (not so difficult). I strongly suggest getting a second opinion (a little more work). Run your numbers through one of the online tax prep services that require payment only when filing. Often you can print these forms without paying or filing they are just marked with a DO NOT FILE to prevent you from simply mailing them in. This ?second opinion? will give you peace of mind that your return has been prepared correctly. The following website compares multiple features and prices of 10 different tax software products: http://tax-software-review.toptenreviews.com/.

If you find that you have been using tax preparation software for a number of years, you might want to visit a paid preparer and ask them to take a quick look at a couple of previous year filings as well as prepare the current year?s filing. The preparation of the current year?s filing will get you in the door. Tax preparers tend to be anxious to find others mistakes, even if that ?other? is an automated software company! If a mistake is found you can choose to have the preparer amend prior year returns or do so yourself as most software products have this option.

Even in the years that I have chosen to use a paid tax preparer, I run my simple numbers through an online software program just to get a ballpark figure. (By simple numbers I am referring to the info on any W2?s) This is helpful for planning and prepares me to have an intelligent conversation with the preparer if I have any concerns.

Tax preparation software is a less expensive alternative that I suggest using in combination with the professional services of a paid tax preparer. The guidelines above will help you reduce error and give you peace of mind while greatly reducing your cumulative tax preparation costs.

Many small business owners and entrepreneurs are choosing to forgo the traditional, manual methods of preparing taxes or handling payroll and sales taxes by using tax software instead. For simpler businesses, especially sole proprietorships, the most basic tax preparation software should be enough to meet your requirements.

What are some of the different things that tax software can do for small businesses?

1. Simplify preparing and paying state and federal income taxes.
2. Ensure that all the proper deductions are claimed.
3. Make it easier to pay and calculate payroll taxes.
4. Help deal with sales taxes.
5. Make e-filing simpler.
6. Reduce the risk of an audit.

 

To choose the best tax software for  business, first assess your actual needs. You’ll want to select one based on factors such as the number of employees you have, whether or not you do business on a local, national or global level, as well as the overall complexity of your company or business. Then, make a list of each type of taxes you will be responsible for paying or collecting. Be sure to include not only local, state, and federal taxes, but also payroll taxes along with any sales or usage taxes.

Some of the most popular tax software include:

Automatic Data Processing, Inc. (ADP): ADP has a line of tax software, with some specifically designed for small businesses with one to 49 employees. Their payroll tax software completely calculates, prepares, and submits returns as well as tax compliance reports. Other software manages income taxes as well as unemployment insurance taxes.

MasterTax: MasterTax is used by small businesses for payroll purposes and has an easy-to-use user interface for those who aren’t familiar with figuring taxes. Their products include MasterTax Enterprise and MasterTax Service Provider, as well as software for use with intranets and within networks.

Sabrix: Sabrix’s tax management software is used by companies both large and small, and supports global tax transactions, which is excellent for those businesses that deal with clients overseas and need to understand foreign usage taxes. Sabrix also offers an online service that allows potential customers to try their system before buying, and is a leader in providing sales tax solutions to businesses.

Others that deal mainly with sales tax are Independent Systems, which has been in operation since 1977 and offers software for both sales and payroll taxes, and CorpSystem Sales Tax Solutions that features automated returns, access to tax rate databases, and several other helpful tools. For many small businesses, software such as TaxCut or TurboTax that are commonly used by individuals may also be sufficient.

Tips for Buying the Best Tax Software for Your Business

- Software that has the most features may not necessarily be the best for your particular type of business and may make things more complicated than they are.

- If possible, “test-drive” tax preparation software before buying. Many companies will allow businesses to evaluate their software or try demo versions before making any commitments.

- The absolute best tax software will include regular, automatic updates to stay in accordance with current tax laws and requirements.

- Make certain the software you purchase is compatible with your computer’s operating system.

- Ask business associates or colleagues for their recommendations.

The objectives of using tax software for your business should be to avoid the most common mistakes and tax preparation errors, and also to reduce the amount of time spent calculating taxes. Tax software will also enable you to claim all available tax credits, and be sure that your taxable income is accurate.

International Fuel Tax Agreement (IFTA), under the Article of Agreement, section R910, requires that all the licensees shall file a tax return for the tax reporting period with the base jurisdiction, by the due date. It is the sole responsibility of every licensee to timely file the tax returns and pay all the due taxes. Therefore, all the licensees should maintain proper records and tax calculations for the aforesaid purpose. IFTA Fuel Tax Software is a technologically advanced device, which not only manages all the needful records, but also assists in calculating IFTA taxes.

Manual calculations of taxes in-accordance with IFTA rules, is a ponderous task. These tax calculations require a lot of valuable time investment on one hand and demands enormous efforts, on the other hand. But Fuel Tax Software has overcome all these intricacies related to the IFTA tax calculations, as this software can perform all the tax calculations with absolute accuracy. Now a licensee, under the jurisdiction of IFTA member states, would not have to hire accountants or professional experts for tax reporting purposes; as this highly sophisticated software is easy to operate and a user friendly device. In-order to calculate IFTA taxes, a user has to just input certain information like the amount of fuel used, the different types of fuel used and the number of miles a vehicle has traveled etc. After processing the inputs, IFTA Software calculates the exact tax amount.

IFTA Software not only calculates taxes but also manages various records which are required to substantiate the audit and tax filing information. IFTA Fuel Tax Software in-tandem with the latest trucking software; helps in maintaining various irksome accounts and bookkeeping processes. The web based Fuel Tax Software is more convenient and efficient program, than the standard Fuel Tax Software; as it provides the desired mobility to a licensee, because it can be operated from any place across the globe through the internet. This software does not only save valuable time, but it has also brought a high degree of efficiency in the functioning of transport companies; falling within the jurisdiction of IFTA members.

IFTA Fuel Tax Software is a technically designed device, which not only calculate taxes as per the IFTA guidelines, but is also helping various licensees and transport companies in this region, by bringing efficiency in their business activities. Fuel Tax Software is systematically organized software, which is designed in-accordance with the rules and laws of International Fuel Tax Agreement, to deal with various intricate procedures. This sophisticated software technology has brought extreme efficiency in the whole transportation system, within the jurisdiction area of the IFTA member states.