Preparing for the tax season
Tax season is just around the corner with 70 days left. I know it’s depressing—the IRS is nobody’s best friend—but if you plan early, you will be able to save money. Now is the time to find out whether you should purchase software or use a tax preparer. A majority of Americans, about 80 percent, use a tax preparer or tax software to file their taxes, according to the IRS. You should consider using a tax software program or a preparer rather than written tax preparation to help reduce errors, save time and avoid a wrist sore. Even the IRS Commissioner Douglas Shulman uses a tax preparer. He said:
I’ve used one for years. I find it convenient. I find the tax code complex so I use a preparer.
Tax Preparation Software
TurboTax Vs. H&R Block at Home
The two largest tax preparation software companies, TurboTax and H&R Block at Home, formerly TaxCut, are very competitive in what features they offer, but there are subtle differences between them.
- Live Support: TurboTax charges $29.95 for the first 20 minutes to talk to actual tax expert for advice. However, it does offer 24 hour live chat and an excellent free online community site. H&R Block’s more expensive premium software includes one free session with a tax professional and charges $19.95 per question after that. However, it also offers a free community website to post questions.
- Audit Support: Although the TurboTax software tracks your audit risk and gives some advice if audited, TurboTax charges an additional $40 fee, which must be purchased in advance, to have an actual tax professional help you in case of an audit. H&R Block, on the other hand, includes free audit support from a tax professional with its deluxe version.
- Price: TurboTax charges $49.95 for their premier online version and $89.95 for their desktop version. H&R Block’s premium online software for $49.95, and the desktop version retails for $79.95, but it isn’t available through the H&R Block website.
- The Bottom line: TurboTax and H&R Block at Home are very competitive in what they offer. TurboTax is a time-tested favorite and won’t disappoint, but H&R Block edges TurboTax out slightly with its free professional help in the rare case (less than 1 percent) of an audit. Toptenreviews.com actually compiled an easy software comparison chart for comparing the features in the top 10 tax preparation software programs.
Whichever choice you make, be sure it’s before April 15
If you choose to buy tax preperation software make sure you don’t buy it close to the April 15 deadline because prices may increase as we get closer to the deadline.
File your return for free
Don’t have the money to pay for software? Well, the IRS actually offers access to free tax preparation programs for people who have adjusted gross income of $57,000 or less. The IRS lists the companies participating in the free file program on their site, which includes most of the major tax preparation software companies: TurboTax, H&R Block and TaxAct. Most companies still charge extra to file your state taxes.
Tax Preparer
Don’t always trust them
The Better Business Bureau cautions tax payers when using a tax preparer because even the tax preparer can make mistakes, resulting in burdensome fees and hassles. Some of the advice of the BBB in finding a trustworthy tax preparer include: Check the preparers credentials, read the contract carefully and get referrals from family and friends.
Make sure using a tax preparer makes the most economical sense
Jim Gerding, a certified public accountant at Rehmann LLC, said you should file on your you’re own if you’re single, renting, have one job and few assets or investments. However, you should hire a tax preparer if you’re married, have children, own a home, have moved during 2009, live in one state and work in another, have various sources of income or own a business, he added.
A tax preparation program is much cheaper than a tax preparer
H&R Block at Home sells as low as $25.46, but if you’re clueless about filing taxes and have little time you should hire a tax preparer. If you have questions while filing, this could add additional costs. Also, you can lose money if you don’t know all the deductions that you are entitled to, according to bvonmoney.com.
If you choose a tax preparer there are many benefits and costs between an outlet and CPA
A tax preparer from a chain or local outlet could be appropriate if your tax situation is not very complex since some of these professionals, especially at local outlets, may not have a high level of expertise and may not be cognizant of the deductions available to you. A CPA can be a good alternative to guide you through financial situations, but make sure he/she is up to knowledge on new tax laws, according to bankrate.com.
Tags: Filing taxes, H&R Block, IRS, tax preparer, tax software, taxes, TurboTax
