Sunday, February 1, 2009

You can do it yourself with tax software

NEW YORK More than 62 percent of federal income tax returns are completed using tax preparation software. And while the IRS says professionals prepare more than half of returns, that still leaves more than 50 million people each year handling their own 1040s.

Here are some questions and answers about using tax-preparation software, and about the protections and support they offer filers who have problems.

Q: How do I know if a company's software follows all the IRS rules?

The IRS requires all tax preparation software to meet specific standards before it is approved for e-filing. Tax laws change each year, so make sure the program in use is for the current tax year (2008).

Q: Does that mean the software can guarantee a user doesn't make a mistake?

TurboTax – and other programs like H&R Block's TaxCut – asks a series of questions designed to help users enter W2 information and other income details the right way. But John Hewitt, chief executive of Liberty Tax Service, warns that you can enter certain types of income in the wrong spot, which would result in the wrong tax being calculated. So it is important to pay close attention to the questions as they are asked.

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1 comment:

Melanie said...

Tax software is very useful... TurboTax is one of the best software!!

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