Episode Notes

5 Things You Should Know About Tax Preparation Software

1. The out-of-pocket cost is pretty low for these applications. Typically they cost about $50 to a hundred dollars, putting aside any filing fees. However, it's important to remember that you are going to have to spend a significant amount of time working with the software and understanding how it works.
2. The more complex your situation, the more you should avoid tax preparation software. It's a good idea to ask a professional tax preparer questions and to go over certain things. There's nuances, anomalies and other things involved. The more complex the rules are, the more complex your transactions are. Sometimes the software itself might not step up to answer the questions or perform the tasks needed.
3. Software applications still make mistakes. It's important to scrutinize for accuracy and any potential problems. Software can leave out certain things.
4. The more you integrate your tax software with your accounting software the better. This way you can move the numbers over quickly.
5. Engage a tax professional or a CPA. While you might be able to be doing 90 to 95% of the work with software, it's still worthwhile spending a couple hundred bucks to have a professional take a look at the results, give you any comments and any thoughts. They might have some tax planning ideas or strategies they can add.

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