Software for Professional Tax Preparers

Software for professional tax preparers has simplified the tax preparation process.

Software available for purchase if you're a professional tax preparer is numerous and varied. Choosing the right software largely depends upon your budget, volume of returns filed per tax season, and the needs of your client base. The IRS offers excellent guidance in determining the right software for your individual needs.

Benefits

Tax preparation can be a complex process; the use of software for professional tax preparers simplifies this process. Utilizing data-entry technology, you can rely upon software to calculate formulas, prepopulate data into correlating boxes on different forms and schedules, determine fraudulent identification numbers and file returns electronically.

Considerations

Before committing to a particular tax preparation software, you'll want to consider suggestions from the IRS for choosing a user-friendly, menu-driven professional tax preparer software that meets the requirements of your clients. The screens should replicate all standard IRS forms and schedules, as well as possess "Help" options. The mathematical aspect of the software should verify calculations from page to page, and the diagnostics should be capable of checking for duplicate identification numbers. Tax preparation software should have the ability to correct IRS-rejected returns, print the required IRS e-file return page (Form 8453) before transmission for electronic filing, and possess safety features to prevent the accidental deletion of a return.

Costs

Costs associated with tax software often include processing fees beyond the up-front purchase price. The IRS recommends that you consider the following costs: additional features that are necessary to run the software, the price structure for filing returns, charges for rejected returns and retransmissions, and fees for installing the software on several systems. Some software requires you to pay a per-return fee for each file transmitted to the IRS. Depending upon the number of returns you file each year, volume discounts could save you money.

Filing Options

Electronically filing (e-filing) tax returns dramatically reduces processing time. Therefore, you should answer the following questions posed by the IRS regarding the e-filing capabilities of the tax software you're considering: Does it allow for direct transmission (where the return is filed directly to the IRS) or indirect transmission (where a return is filed through a software company that sends it on to the IRS)? Does the software provide the option to perform both a direct and indirect transmission of returns? Does the software require a specific modem, speed or communication protocol for transmission, and does it allow for submission through the Internet?

Technical Support

Obtaining software assistance in an efficient, user-friendly manner can lessen your anxiety and save money. Before the purchase of professional tax-preparer software, consider the software manufacturer's technical support options The IRS recommends that the user manual or software tutorial be easy to comprehend. Most software vendors offer training courses; however, they may be offered for an additional fee. Research the vendor to determine if there's a 24-hour toll-free telephone or fax number where you can communicate quickly with a technical support agent. The number of software program updates made in the previous year to correct problems can be an indication of the quality of the product.

References

• IRS: Software Considerations: E-file Made Easy