Preparing accurate tax returns without proper help isn’t an easy task for anyone, but for the self-employed it can be a real nightmare. In fact, many of them don’t even try to cope with the whole process on their own but, instead, will immediately turn to certified accountants. Admittedly, this is an effective way of handling tax returns but it’s also quite expensive and spending a fortune on tax prepping is something that the self-employed often cannot afford. It doesn’t have to be that way, though, as tax software can do the job just as accurately as an accountant. In fact, not only are self-employed tax programs ridiculously easy to use – even without prior experience – and cheaper than having tax returns created by an expert, but they are also equipped with the best and most innovative features to assist with tax preparation.
If there is one thing people can’t stand it’s doing their taxes. Going through all those different documents that seem like they have been worded by aliens is pure torture for anyone. So it’s not surprising that once taxpayers find a solution that prepares their taxes and explains the process in plain English, they stick to that solution no matter what. This is the secret behind TurboTax‘s success, a company that has been helping people deal with those pesky tax returns since the 80s. TurboTax Online, the company’s online tax prep solution, provides everything that a taxpayer needs to create accurate returns. The user-friendly interface of the software is particularly important, but so too are the thorough interview questions. There are a number of additional extras, too, all of which will help you receive the biggest possible refund in the end. And this, believe it or not, is just the surface, since not only is TurboTax fully supported on mobile platforms but it’s also very safe to use thanks to the outstanding built-in and optional security settings.
Even though there have been plenty of changes in the tax system over the years, one thing has always remained: taxpayers want to deal with their tax returns as quickly and conveniently as possible. With H&R Block those wishes can come true since the company perfectly combines its long-lasting expertise with the convenience of cloud technology. Users of this tax software provider are in for a treat, since the program and its mobile application counterpart do exactly what they need to thanks to the many convenient features that help finish tax preparation in no time. There’s a suitable product for everyone at H&R Block, ensuring that all the necessary tax forms are put together while extra services mean that the filing process remains free of any hassle from start to finish. And to make the deal even sweeter, not only are the programs free of charge until filing but the costs can be covered by any tax refunds you have earned – essentially allowing you to pay nothing out of pocket.
The U.S. is often called ‘the land of the free’, but there is one thing that no American citizen is at liberty to do: avoid paying taxes. For many years now Liberty Tax, a company founded in 1998, has been of great help to countless taxpayers across the country thanks to its wide network of tax offices and, of course, its online tax preparation software. And while this program may look outdated from the outside, it’s actually a decent solution with which tax returns can be prepared and filed in no time. Aside from the usual set of features that taxpayers might expect from such solutions, Liberty Tax even had the consideration to make its software even more convenient to use by equipping it with plenty of clever ideas like credit maximizers or the built-in help tools that explain everything as simply as possible. And although the company’s services aren’t available for free, the expertise provided by Liberty Tax’s staff alongside its convenient tax prep program is definitely something worth paying money for.
The first thing to know about tax prep solutions is that they’re not for everyone. In fact, it’s safe to say that self-employed taxpayers that have a particularly complicated tax situation or cannot manage their taxes on their own are certainly better off with a certified tax expert, even if it’s no secret that relying on such a service is way more expensive than using tax software. However, it’s worth adding that modern tax prep programs are all created in such a way that users can easily guide themselves through all relevant tax situations, essentially enabling them to put together accurate tax returns just by answering a series of simple questions and providing the data that they are already in possession of.
But the software’s thoroughness isn’t the only thing that self-employed taxpayers can find satisfaction in, though. Firstly, sole proprietors are usually required to purchase the top-tier product of any given company because despite its high price is the often the only option that contains all the features they need, including the filing of business profit and loss reports.
Then there is the function that pulls data from previous tax returns or occasionally from other sources, significantly reducing the need for manual entry. Online tax prep solutions are mobile-friendly, too, meaning that the return can be prepared on the go. It’s useful to know that tax software providers often offer additional services as well, such as IRS audit assistance – which helps audited taxpayers to confidently face the IRS – or ID theft protection that alerts authorities should someone commit tax fraud in your name.
Although thoroughness, convenience, and mobile-friendliness are all indeed important aspects of any tax prep solution, these features shouldn’t be the focus when it comes to picking the most suitable software. These are just secondary traits as the most important features to look for are the presence of the necessary business-related forms, the option to maximize and itemize deductions, and the overall price of the product and any additional services.
The first of these aspects is by far the most important because without the correct forms you won’t be able to properly report your business income and expenses. Thankfully, the top-tier versions of online tax prep software are more than capable of dealing with Schedule C – the form dedicated to business profit and loss – and often these programs automatically detect when this special document is required and prompts you to upgrade to the corresponding solution. However, it’s worthwhile knowing that in case of a partnership, C-corporation, or an S-corporation, specific downloadable products will have to be purchased as those are the only solutions capable of handling the special forms needed for such business entities.
Deductions, however, are handled well by both online and desktop-based tax prep programs. So well, in fact, that not only are they capable of providing every possible deduction option simply based on your answers but they can also reveal hidden deductions that you may not be aware of. Granted, going down the path of tax software means having to purchase a new solution for each tax year but thankfully the costs of doing so will likely never exceed the service fees of an accountant, regardless of whether you buy only the program or decide to add extras like state returns, security services, and/or the option to pay the chosen service provider by deducting the necessary costs from your refund total.
When it comes to the point of using the chosen tax software to file your taxes for the first time, it’s best to be prepared for some manual data entry. Granted, it won’t take an eternity to put together an accurate tax return, especially if the previous year’s return is uploaded into the program to serve as a base for the current one. It is always possible to turn to the tax experts of the tax prep company for help, too, but there are still many things to pay attention to in order to avoid an audit by the IRS.
First and foremost, you will need to be in possession of all documents that accurately report any source of income – which is usually included on Forms 1099-MISC and are issued by your clients – as well as proof of all expenses related to maintaining the business. The key word here is accuracy as no matter how advanced tax programs are it’s still always the taxpayer’s responsibility to feed them with accurate data. Unlike salaried individuals, self-employed people are also required to report an estimate of their federal income taxes on Form 1040-ES and then pay the estimated amount in four installments on April 15, June 15, September 15, and January 15. This estimated amount is usually 100% of the income taxes paid for the previous year or 90% of the tax estimated for the current year – but only if the adjusted gross income is below $150,000.
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