Tax Software

Must Have Features

Of course, you'll want to select a package that's easy to use and that will save you the maximum amount of time on tax preparation.

Virtually every package offers an "interview-based" form-completion option, which presents you with a series of questions; your answers will provide the information needed to complete the various forms and schedules. Look for a package that offers an interview sequence free of accountant's jargon, along with an option to enter data directly onto the forms, if you choose. To avoid having to re-enter data already maintained in an accounting system, most programs allow you to download data from text files, or directly from compatible software packages.

The software should include all of the IRS forms that you'll need for your particular business situation. As Intuit's Daina Finch points out, "All business-tax software should include forms for depreciation, car and truck expense worksheets, amortization, capital gains and losses, extensions of time to file, and various tax credits."

Also, make sure the product supports the specific legal form of your business. "You'll need form 1040 Schedule C for a sole proprietorship, form 1120 for a corporation, form 1120S for an S corporation, and form 1065 for a partnership," Finch says.

If you're filing both federal and state taxes, make sure the program you select offers the appropriate state tax module that will transfer information automatically from the federal return to the state return.

Don't forget about technical support. Look for a package that provides extensive onscreen help, as well as 24-hour-a-day technical support.

The best packages combine ease-of-use with quality output. A "peace of mind" option offered by some of the software vendors is a guarantee that, if you incur any IRS penalties due to a software mistake, they will be paid by the software company.

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This article was originally published in the April 1997 print edition of Entrepreneur with the headline: Tax Software.

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