3 Tips to Make Selecting Tax Software Not Taxing
by JimD, Former Moderator
- Created: December 13, 2010, 8:21 am
With the New Year beginning and the holiday season wrapping up, tax return season is upon us. As a small business owner, tax software packages can help make filing and paying your taxes easier, but how do you know which one to choose? Here are three tips to consider when selecting your tax software.
- Choose Correct Business Entity Type
When buying software, many people debate between purchasing the most expensive package, thinking it will definitely have what they want, or the cheapest, thinking it will get them by. This is not a good model when buying your tax software. Different software packages are designed to help different types of business entities.
proprietors, consultants, contractors and single-owned LLCs have different forms than S Corps, C Corps, partnerships, and multiple-owner LLC. In order to keep the price down, many software developers split their small business packages by business entity. The more complicated your tax situation, the more expensive the software gets (but still usually no more than $150-$200.)
If you simply buy the most expensive package, it may overcomplicate your taxes and not have the correct form preloaded into it, likewise with the cheapest. Take some time and research what software version will best suit your business.
Another possible issue is compatibility. Computer compatibility is not as big of an issue, since most software will run on recent Windows or Mac operating systems. Most compatibility issues are due to other software. There are standards, so even if you used specific software last year, most of the data should be able to be imported, but that will vary from software to software.
Another compatibility issue is compatibility with your accounting software. Some software packages work well together, so you do not have to take time to retype in data.
When buying any type of software, you should consider what support is included in the price. Many will offer 24/7 technical support on installing and troubleshooting issues, however you may want to consider how much tax support you receive. Well-known tax preparation companies have collaborated with the tax software companies to provide tax support. If you have a specific question on a deduction you can take or any other specific tax question, you can call someone and ask him or her. This support is not always included, so take into account the cost per call or per minute if you do need to contact them.
Tax software lets you do your taxes anytime and without needing extensive knowledge of taxes. However, if you feel that you have a special circumstance, it may be better for you to go and get your taxes done in person. Having the peace of mind can be worth the extra cost. For help, see Selecting a Small Business Accountant.
If you have additional questions about filing and paying your taxes, post them on the Filing and Paying Taxes discussion board.
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