New Tax Code Equals New Headaches
-Should You Hire a Pro or Do It Yourself?
The fate of your financial future truly lies in your hands, this year. The Internal Revenue Service released a new tax code back in January, and it’s been wreaking havoc on the financial plans of many taxpayers.
If you want to make sure that you don’t buy headaches and heartaches by making a mistake on your taxes, take advantage of free tax software. It will allow you to do your taxes the right way, every time. Here are a few reasons why tax software is your best bet.
Knowledge and Experience
Tax software is made by professionals who understand the ever-changing tax code. They know exactly how it’s structured, and they understand how your tax return fits into the bigger picture. If you were to do your taxes on your own, you’d need to know all of this information to avoid IRS trouble.
Tax software not only installs and utilizes tax laws in your favor, it also updates itself to keep you informed. If your tax situation changes over the course of the year, for instance, you can call and update the code, and it will automatically create new W-2 forms, 1099s, and so on.
Personal Touch vs. Online Convenience
A professional tax advisor can be a big help when you’re doing your taxes, but it will cost whole lot more than using online tax software. If you do decide to use software, keep in mind that you won’t be able to get a refund until mid-February.
If a refund is important to you, annual payroll tax software is a better choice. There is software that can be used for a variety of taxes ” federal, state, sales, payroll and even estimated taxes.
As for the type of tax return you file, there is software for that as well (AGI, itemized, etc.). The downside is that you may end up paying someone else to do your taxes later.
You may want to consider hiring an accountant for your business or small business, because the requirements for both are similar and the amount of paperwork is drastically different.
What to Consider for Each Option
Whether or not you have to file a tax return depends on your income level, your filing status, your age, and other factors. For example, if you are married, filing a joint return will increase the amount of your income that is tax free. The IRS provides a handy tool that you can use to see whether you have to file a tax return.
Use the tool to determine the threshold for your situation and see if you need to file a return. Then, make a decision about whether to use tax software or hire a professional.
Tax software is software that will help you with the necessary calculations and provide guidance for claiming tax deductions and credits. Also, if you use tax software, you’ll need to estimate your tax refund or tax bill using the information you have on hand.
When you hire a professional, you get all of the guidance you need, as well as the tools you need to easily calculate your taxes. If you choose to hire a professional, make sure you understand all of the fees and charges involved. Typically, with professionals, the more you pay, the more benefits you get, so make sure you know what you’re paying for.
Cost
When filing your taxes, you have to pay someone to do the work for you – because no one likes the IRS. However, there are two ways to get your taxes filed: professionally or on your own with tax software. Since it is still unclear who is better (or if there’s even a difference), let’s examine both options further.
Tax Issues
Are you considering logging the hours you spend on your side business on your Schedule C? You’ve probably noticed that the amount of your home office deduction depends on the square footage of your home office and/or the business percentage of your home office space. Most tax software programs will calculate this for you based on the answers you provide in the program’s interview.
However, the IRS requires you to fill out Form 8829 to calculate the square footage of your home office. This form estimates the portion of your home that you use for business purposes, which is all the space that is exclusive to your business. Your home office can also be measured based on the percentage of use of the total area of your home. Whatever method you choose to calculate your home office deduction, the IRS recommends that you use a measuring tape to get an exact measurement.
Knowledge
Or Software?
More than ever, software is taking over areas of our lives … like our dry cleaning. But what about tax preparation? Many people think it’s just easier to buy tax software. But is it really though? Many tax software packages may be time consuming to use and set up and they may not give you the recommendations you need.
This is where a tax preparation professional can come in handy.
You have access to years of experience and knowledge, which can help you make smart decisions about which deductions are available to you and how your situation may impact your return.
A tax professional can help you make the most of your money and your tax return. They want to reduce the time you spend filling out your return. A good tax professional will provide a short form or prepare your taxes for you at no cost.
It’s important to remember that it doesn’t have to be one or the other. You can have access to great tax software, but find it limiting. That’s where having an experienced tax pro comes in handy … they can walk you through the steps.
Speed
Simplicity, and Complete IRS Certification.
There are two main benefits that tax software provides:
{1}. Speed – You can complete your tax return in hours instead of days.
{2}. Simplicity – The software asks questions that eliminate errors and ensures that you make the right choices.
Because of these benefits, tax software is often overlooked as a viable alternative to professional tax preparation services.
But if you are like most people, you probably feel like you don’t have the time to spend hours on end completing your tax return. And if you’re self-employed, you may not have the time for the complicated arithmetic and extra forms required by the IRS for your business returns.
Fortunately, tax preparation software makes it easy to quickly complete your tax return and even provides you the option of filing your taxes electronically, which the IRS considers the “correct way” to file. While going it on your own can save you money compared to a professional service, tax prep software is much cheaper than filling out your returns by hand.
But before you buy tax software, make sure that it’s right for you. Different types of tax software are available, each with their own benefits, costs and limitations. You should carefully choose the right product for your needs.
Relationships
Trying to outsource your tax preparation makes sense if you fail to find a quality tax professional.
Keeping your personal and financial life straight can be a hassle. If you’re not a savvy personal finance manager, then it can be nearly impossible to organize everything. You may want to consider finding a tax professional. This can help keep you organized and save you a lot of trouble down the road.
Of course, finding a tax professional may not always be affordable. If you find that tax preparation services are outside of your budget this year, then you should consider using tax preparation software.
These days, you can utilize tax preparation software to not only keep you organization, but also simplify the process of tax preparation.
Top-Rated Professional Tax Software
- Intuit TurboTax 2018
- Intuit TurboTax may be the best tax software recognized by its regular users for consistency and clarity. It comes packed with 100% accurate calculations and guides you through every tax filing step.
Its best features include free live chat and 24/7 access; easy to read display, question & answer section to resolve your doubts; direct importation of W2 and 1099 forms from employers or banks; multi-step interview styles in order to get you from simple to more complex parts of the tax return; and assistance on all tax areas.
If you're relying on TurboTax 2018 to file your taxes, the best time to file is in January. Since you can file for a six-month extension, you have to try out the services by January of the year before in order to use the most advantageous time for filing your taxes. Out of the box, the program uses all possible credits and deductions to prepare just the tax return you need. It can help you maintain updated records of expenses, receive reminders, import scanned documents and much more. You can bank on TurboTax to be the best tax software worth the cost.
FBAR: Foreign Tax and Report of Foreign Bank and Financial Accounts
TaxSlayer
Every tax season, Americans have the opportunity to file their taxes. Some prefer to file taxes the old fashioned way and complete them on paper. Others like to use software to file their taxes online. Obviously, there is a demand for tax preparation software, since large companies like H&R Block and Intuit have entered the market.
So what are the pros and cons of using tax software?
Pros:
It’s Convenient: Using software to file your taxes online can save you a lot of time. If you like going online, you might feel more comfortable using software and doing your taxes on your computer. Also, using an online software service can help you stay on schedule. You can file early rather than getting behind.
Using software to file your taxes online can save you a lot of time. If you like going online, you might feel more comfortable using software and doing your taxes on your computer. Also, using an online software service can help you stay on schedule. You can file early rather than getting behind. It’s Free: Many online tax software services are free to use. A lot of them will offer you a free version that includes a simple way of completing your federal tax return. You don’t have to fork over any money unless you decide to upgrade to a paid version.
TaxAct
TurboTax
Vs. Hiring a CPA
When it's time to do your taxes, whether you choose to do them yourself or hire a certified public accountant should be a decision you make based on your particular situation. There are a number of reasons to choose one over the other, and both options have their pros and cons.
If you do your taxes yourself, you'll need to go through the hassle of sourcing the resources and formulating the information into the appropriate format. If you're going to do your own taxes, you'll need to have the information available, have a good understanding of tax laws and have the patience to work through the process.
If you're not comfortable doing your own taxes, there's no shame in hiring someone else to do them. The pros in this case will do an excellent job of sorting through the different formulae required to calculate your taxes, and they'll be able to work through them more easily than you will. Many CPAs have experience with various industries and are qualified to complete and file taxes for a wide range of clients.
Summary
Because tax time is here again!
This is probably the most popular question on the subject of filing taxes.
In this post, we are going to check out the answer to the question of whether you Should Use Tax Software or Hire a Pro?
Tax time is here again, and you’ve probably noticed that filing your taxes is a much more complex process than it used to be. There are new forms to fill out, and the tax laws have become more complex and convoluted than ever.
This is probably the most common question people ask around tax time. How do I handle everything? I don’t have time to compare the different tax software companies, and I don’t have expertise when it comes to tax codes. Should I go online and use tax software, or should I hire an accountant instead?
In this post, we’re going to compare both options. We’ll look at the advantages and disadvantages of using tax software and filing with a professional.
Let’s check it out.