Tax Software

As with anything in life, tax software is tailored for different situations. Certain software programs are best for particular situations, but horrible for others. The defining issue is how complex your tax situation has become. The more complex, the better the tax software you are going to need. 

Before heading into a discussion of tax software, an important point needs to be made. Any software program is only as good as the information you put into it. The old cliché of “garbage in, garbage out” definitely applies when it comes to tax software. If you aren’t organized before you start entering information, it is going to be a mess.

As mentioned previously, the best tax software for your situation is entirely dependent upon the complexity of your finances. Although there is a bevy of free tax software solutions online, most are not sophisticated enough to handle complex tax situations. On the other hand, you really don’t need the premier deluxe super duper tax software if you are a salaried employee claiming a standard deduction. Let’s take a closer look.

Let’s assume you have a fairly simple financial situation. You receive an annual salary, stick money in a 401(k) or IRS and own a home. This is a fairly typical financial situation and practically any tax software should be able to do the job. In such a situation, there are a variety of programs that will probably due the job but TaxAct is probably your best option. It is free unless you upgrade and easy to use. It will handle any basic return and we ran numbers through it for different scenarios with no problems.

TaxAct, however, is not particularly effective when it comes to handling complex tax situations. If you frequently trade stocks, own investment rental properties, have multiple business ownership positions or are receiving revenue out of a trust, forget TaxAct. It is simply not designed to handle such situations, contrary to some of the advertising literature it spits out.

For complex tax situations, the best tax software is the infamous TurboTax although Complete Tax is coming on strong. TurboTax Premier is the program you want and it will set you back roughly $80 for both the state and federal tax return options. The program is very detailed and ready to handle complex financial situations.

One can’t mention TurboTax without bringing up some of the problems. While the program works effectively, the makers of TurboTax are not particularly brilliant when it comes to the Internet. Frankly, they get a failing grade. There are constant problems with upgrades, the download process is terrible and they have been known to try to stick invasive tracing programs on your computer. The program will definitely handle your complex tax situation, but make sure you save everything before you try to download anything from the TurboTax site.

Complete Tax is a unique tax software solution. Unlike the above programs, Complete Tax assumes you know something about your financial situation. The program is sleek and the process is fast. Many of the asinine questions and processes found on TurboTax are bypassed. If you have a solid grip on your finances, Complete Tax is infinitely better than TurboTax. 

If you don’t have a grip on your finances, Complete Tax may not be for you. The program runs only as an interview, so it can be hard to go back to an area when you realize you failed to enter information for some category. Also, you can’t view the actual tax return until the interview is finished, a restriction that can be annoying. That being said, I prefer Complete Tax but you may not.

Again, it is important to remember that tax software is only as good as the information you enter. Put in garbage in and the tax software will kick out a tax return best filed in your garbage can.

 source : http://www.businesstaxrecovery.com