Tax Software: Should You Do It Yourself?
When it comes to preparing your state and federal incomes taxes, do you rely upon a tax professional or do you undertake this arduous process yourself? With the former choice, you can ensure that the person that does your taxes knows what he or she is doing. With the latter, you risk making important mistakes, perhaps missing out on an important deduction or failing to follow complicated instructions.
There is, of course, a third way — do your taxes yourself with the help of a third-party tax preparation software program. Such programs have been on the market since the 1990s, offering improved tax prep assistance for even the novice filer. Read on to learn whether this third option is right for you.
You’ll pay to download a software program from one the key tax software companies. Sure, there are basic versions that are free, but for most tax filers, only the upgraded program with a state download option meets their needs. Expect to pay at least $100 annually for this service. TurboTax, H&R Block At Home, TaxBrain, TaxAct, TaxSlayer and CompleteTax are among your options. Compare each plan; choose one that is right for you.
Look into the IRS free file program too.
Tax software programs are complex, requiring that your PC or Mac be able to handle downloads. If your computer is especially old, you may find that the software is too big for your hardware to handle your download. In this case you may need to make the decision to upgrade or replace your computer, an extra cost that you may not be able to afford.
Your first download of your tax preparation software may not be your last. If you use the same program from year to year, then the latest program should be able to import data from the previous tax year. Also know this: your computer should be able to handle program updates as delivered. Although your download may be available as early as November, expect multiple updates to be made through February as the tax software adjusts to state and IRS changes that can affect your filing.
Clearly, tax software programs are a convenient way for millions of taxpayers to gather and track their information. If your computer can handle the load and the price is within your budget, then this option can be right for you. You can also file taxes the traditional way by downloading the forms to your computer, printing them out and mailing off your completed returns as you used to do.
Tax Prep Considerations
So, the answer to this question has largely to do with two matters: your time and your computer’s ability to handle a program. For some consumers, the only answer here is to make a call their tax accountant and arrange a meeting to have those taxes prepared. In this case you’ll leave the hard work to a trust professional, enabling you to concentrate on other matters.
See Also — 7 Hot Tax Tips