What Motley Fool Money looks for in the best self-employed tax software
We all have different requirements when we're looking for great software, including tax software. Some may pay particularly close attention to how easy an application is to use, while others place more emphasis on the application's features.
Here are some of the things Motley Fool Money looked for when reviewing these widely-used tax preparation applications.
Ease of use
We all want software to be loaded with cool features, but we also want it to be easy to access and use those features. In a perfect world, software applications would all be intuitive, so you don't have to spend hours staring at the screen wondering how to access a feature or perform a function.
That's why ease of use is so important. During a review, we pay particularly close attention to how easy a product is to use.
While tech-savvy individuals and those experienced in a particular software application will find navigation a breeze, for the rest of us, an application's ease of use can be the deciding factor in whether to purchase it.
Less is more
Instead of spending a lot of time entering a tremendous amount of data into a tax preparation application, wouldn't it be nice to be able to import the data found on your W-2 or 1099?
If you have only one 1099, it's probably not a big deal, but if you're self-employed, it's likely you're receiving at least a few 1099s at year end. Being able to import these forms can save you a tremendous amount of time.
Access to a tax professional
This can be particularly important to new business owners who have never filled out a Schedule C and have no idea which business expenses are deductible.
While all of the tax preparation software applications we examined do a good job (some better than others) at finding adjustments and deductions that your small business is entitled to, filling out a Schedule C for the first time is daunting. That's why having access to a tax professional can be key.
You may feel you've entered everything correctly, and you may have, but there's nothing better than having an experienced tax preparer or CPA look at your return prior to submitting it to the IRS. Chances are everything is correct, but with access to a tax professional, you don't have to take that chance.
How your business can benefit from using tax software
Your small business can benefit in many ways from using tax software. Here are just a few potential upsides:
Save time
You'd be amazed at how quickly you can complete your tax return using tax preparation software. All tax preparation software is designed to be easy and efficient, taking you through the entire process in less time than you may expect. (I do my self-employed taxes online in less than an hour each year.)
If you're still preparing your taxes on paper, make the move to tax preparation software. You will never go back.
Maximize deductions
Unless you're a CPA or experienced tax preparer, you may not know what deductions are available to you. In fact, if this is the first year you'll be filing a tax return for your business, you may not know about any of the tax deductions you can take.
Tax software solves that problem immediately. It analyzes your answers to some simple questions asked at the beginning of the tax preparation process, guiding you to available deductions, credits, and adjustments that are all designed to reduce your tax liability.
Help avoid audits
The word "audit" can strike fear in the best of us. While no tax software can guarantee that you won't be audited, what they can do is reduce the risk of being audited by helping you prepare an accurate tax return. Not only that, but many of these applications also offer audit protection, guiding you through the entire audit process if you hear from the IRS after your taxes are filed.
