Money Saving Tip: Tax Preparation Software

 

 

 

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I REALLY HATE over paying INCOME TAXES! For years I refused to spend money to help the government collect My Tax Dollars. In principal, the tax preparation software should be tax-deductible. (NOT in CANADA) I finally realized, trying to punish the government with having to sort through my mounds of paperwork was like “Cutting My Nose off to Spite My Face.” I was punishing myself more by spending hours and hours filing out tax schedules and forms. Imagine that I used to file seven paper returns for my immediate family plus help my friends with their returns. That is a lot of paperwork.

Accountants and tax preparers can charge exorbitant fees. Most people find filing their own tax returns very intimidating! The information that you need is on the CRA or IRA web sites, plus tax preparation software is almost idiot proof. Most software have a step by step instruction option that is really simple. All you have to do is answer questions and put a check mark in the box on all sources of income and tax-deductible items that apply to you. The step by step method also allows for filing joint returns.

Advantages 

  • It  is nearly impossible to miss a tax deduction, just slowly read each question
  • It offers tax saving tips, especially good for joint returns
  • It makes you aware of deductions that you may not have known were available
  • it even allows you to make corrections
  • Helps tax planning for future returns
  • Keeps track of unused deductions to be carried forward to future years, like capital gains losses
  • Allows you to set up direct deposit for your tax refund, you could get a refund in 10 days
  • Gives you the option to file on-line or print a paper return for mailing.

Disadvantages

  • May not be worth the cost for low-income individuals or for going only one simple tax return

Just remember that even if you use a professional to file your business or personal return, you are still responsible for any filing mistakes. You are liable for all penalties and taxes owed.

A hard lesson that I learned about accountants:

Would you be surprised to learn that I fired my first accountant? He used to comply my business income statements and file my corporate income tax return. He failed to advise me on some tax saving strategies for my company and for me personally. The next two accountants that I used were bombarded with tax saving questions almost every time we got together. Over time, the list of questions got smaller but my tax savings got larger! If you don’t ask, accountants tend not to tell!

Disclaimer: Please do your own research on tax preparation software.

 

 

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A recent article from FORBES:

FBI Investigates Tax Fraud Reports As TurboTax Denies It’s A Target

“As concerns about stolen data and tax identity fraud continue to mount, it’s clear that this isn’t an issue restricted to Minnesota. Or Utah. Or Connecticut. With that in mind, it’s no surprise that the Federal Bureau of Investigation (FBI) has reportedly opened an investigation into a potential computer data breach related to fraudulent tax returns filed with TurboTax software.”

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8 thoughts on “Money Saving Tip: Tax Preparation Software

  1. Very well-timed blog entry. I’ve used Turbo Tax the past two years and it’s gone well, especially when you factor in the cost that comes with having an accountant complete a tax return with numerous side writing jobs.

    I do two questions. This will be my first tax return since purchasing a home and I’m wondering if it’s more difficult to complete with that additional information. I don’t want to make a mistake that costs me money in the end, so should I file through an accountant or can I still use a tax preparation software.

    Also, Turbo Tax costs me $80 each year to use its software. Are there less expensive options that provide the same assistance?

    Like

    • Sorry, I don’t have any suggestions unless you want to share the cost with your family or friends. I have been buying the TurboTax premier addition which costs me $80.00 because I found that cheaper visions can’t handle my complicated returns. I do seven returns for an average cost of $11.50 per return. By the way, my old accountant used to charge me $300.00 for one return.

      Like

  2. I have used Turbo Tax for years and it has led me through home purchases, home selling, refinancing, moving, investment reconciliations, etc etc.

    Well worth the money in time savings , tax tips, and error correction.

    They even have a worry free audit service if you are particularly IRS phobic. It is extra cost but I bet it is still less than many accountants.

    Liked by 1 person

  3. I have been using TurboTax for a few years now, after trying another software that I can’t remember the name of and spending fortunes at H & R block.

    Software also have limitations, just like humans. You have to “tell” the software about your situation to get the applicable deduction.

    If you don’t input the correct info, you don’t get the correct amount. If you want to do your own taxes, you need to do a little bit of tax research too. I didn’t find Canadian taxes that complicated, once I did this!

    Liked by 1 person

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