Zone acknowledges that software and tax preparation books can offer a lot of good advice to the small-business owner who wants to prepare his own taxes, and that they keep up with most of the changes in the tax laws. However, she cautions, the software may have flaws that could lead to additional tax penalties.
"You are liable for any interest and penalty regardless of whether you are using a program or not," Zone says. "If you are going to a professional, it is their responsibility, whether they are using a computer program or not. They are also trained to ask you questions and to find information that you may not be aware of in doing your own return. You will then have someone to call during the year if you have questions.
"There are some things the software cannot do, and the software manuals will tell you what you have to do by hand," Zone says. "People may not be geared into the terms to understand all of the implications of the tax code."
According to Tenenbaum, the program's Final Review feature will run a check on your prepared returns and flag problem areas or areas that could raise IRS concerns. "The programs will also make tax savings suggestions, like retirement plans," Tenenbaum says. "You don't need a prior knowledge base. If you're uncomfortable with the tax return, take it to a tax professional and have them review it. You'll save money and have a better understanding of taxes and how they impact your business."
Tenenbaum confirmed that there have been minor "bugs" in tax software programs in the past, and says Intuit guarantees its products and will pay any penalties and interest assessed to a user due to a flaw in the program. In fact, many tax software manufacturers have similar standing offers, but you should check before you invest in a product.
"The other thing you'd want to look for is a well-established provider that has the expertise to put out a program. Intuit has a group of over 100 in-house accountants that put TurboTax together. They have their own tax practices, and through April 15th, they're out getting real-world experience."
Ketschke says he is confident that he and the software are doing a good job of filing taxes. It's not just at tax time when software helps his business; He adds that a sophisticated accounting program, DacEasy Accounting, serves as his bookkeeping system throughout the year, and that he just has to re-type the data into his tax software.
"Now, with the software, it's easy for a business owner to do his own taxes," Ketschke says. "Everything is balanced right, and you don't need to be a math wiz to make it work. The tax program's features give you confidence that, when you mail your return in, everything will be just fine."