We Know: How Tax Software Works

What is tax software?

Tax software is used to file state and/or federal taxes on behalf of businesses or individuals.

What is the purpose of using tax software?

Tax software is used in place of manually filling out hard copies of tax forms. Tax software is also used in place of hiring a certified public accountant (CPA) or hiring a firm like H&R Block to do your taxes.

What can tax software do?

There are many advantages to using tax software:

  • Tax software eliminates the need to order or download tax forms from the IRS.
  • Math calculations are performed automatically and are less likely to be incorrect than when doing them by hand.
  • Tax deductions and other IRS rules are automatically taken into account when the tax software prepares your tax return.
  • The latest changes to federal and state tax codes can be downloaded by the tax software for the most up to date information.
  • Tax software enables you to file your federal and state taxes electronically, which usually means you will receive a refund faster than if you mail in hard copies.
  • Tax software uses error checking to make sure that all required information was entered.
  • Some tax software offers red flagging when an entry may catch the attention of the IRS.
  • Optional financial advice for future investments and retirement is provided by some tax software packages.

What kinds of tax software products are available?

There are several tax software programs that you can purchase:

  1. H&R Block TaxCut.
  2. TurboTax.
  3. TaxAct.
  4. QuickTax.


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