Andrew Klimishyn | January 23, 2018 at 16:17
Home > Blog > The best tax software for individuals and accountants

The employees and entrepreneurs need to prepare tax returns regularly. There have 2 different ways how to do this. The employees can either to ask for the help of a tax preparation company or use an online service for a quick result.The business owners need to hire an accountant who will keep records of accounts and do all calculations. For their operations, accountants need to use a specialized software. Though some companies still hire a bookkeeper who conducts all operations manually and have a tight schedule. A professional worker cannot be replaced by any software. Here we are going to make a quick overview of the most popular accounting software for individuals and accountants and discuss their benefits and differences.

Here are the services that help to deal with your finances:

H&R Block

Individuals may ask for help from tax preparation companies. One of the most popular in the USA is H&R Block. It offers such services as preparing a tax return, and business consulting to low- and moderate-income clients. During fiscal 2017, H&R Block had prepared about 23 million tax returns making the annual revenues of over $3 billion. Of course, it is very convenient to entrust preparing a tax return to a specialist in accounting. Though there often arise problems in communication between clients and company workers. The customers complain that refund pay is too high and work team is not competent. The reason may consist in optionality of accounting education for an employee.

According to the survey made by the National Society of Accountants, in average tax preparation costs $159. As for H&R, the price is even lower, it charges nearly $150 for preparing a tax return. Actually, you are expected to pay up to $273  in the 2017 filing season but if you don’t need to itemize your deductions, the price is decreasing to nearly $176 or other figure depending on the tax preparation company. Other Liberty Tax and Jackson Hewitt - are providing the same services as H&R Block.

H&R Block also offers to the clients' tax software for a desktop. This tax software is designed in 4 versions including Basic, Deluxe, Premium, Premium, and Business. Using even the most advanced package you can get detailed guidance, calculate your taxes, file 1040A and 1040EZ forms, corporate and S corporation tax returns (Forms 1120, 1120S), partnership and LLC tax returns (Form 1065), estate and trust tax returns (Form 1041), nonprofit tax returns (Form 990), import your W-2 information, create payroll and employer forms, check for issues and estimation of your audit risk, double-check the return, maximize mortgage interest and real estate tax deduction, prepare a report assistance on income from investments, stock options, home sales and retirement, support, etc.

Tax software services for individuals

Another way to get taxes prepared is by using online services. Self-employed and small businesses don’t need any complicated operations to be performed. The most popular online services to calculate taxes for today are TaxAct and TurboTax. They offer to file 1040EZ and 1040A forms which is usually enough for individuals. You can also upgrade to Plus,  Premium or another version to use more advanced tools. These products are available both in online and offline modes, so if needed you can install this software on the computer your accountant is working on.

TaxAct

TaxAct offers a lot of tools to help you with doing tax calculations. The pros of using TaxAct accounting software consist in its price, it is much lower than on other programs. Also, customer support is offered in an unlimited amount via email or phone. When comparing TaxAct with other products like TurboTax or H&R Block, one must say that you can buy this package for $100 and you will be offered with advanced tools included in the most high-quality software. Another pro is that besides using TaxAct online it offers a free version that is totally free.  Also, in TaxAct offers Plus, Freelancer and Premium packages at a price $25, $39 and $51 respectively. In case, a free version is not enough for you, you can easily upgrade to any version in the middle of the working process.

TaxAct is suitable both for the accountants and for individuals. When working offline, you can purchase the TaxAct software for a desktop. Its disadvantage consists in an inability to share files via internet. When using the online version, you don't have to install any software on the computer and all your files are saved in the cloud. Among the cons of TaxAct, one can list not very user-friendly interface but the thing is that it works very efficiently. Unfortunately, in a free version, only 1040A and 1040EZ forms are included. TaxAct has developed a free mobile app though it is quite simplified and suits only for performing very common tax operations. One more novelty of TaxAct is that it has an online knowledge base, so customers can easily find the answers to tax-related questions. Also, support service is available 24/7 to give a hand with specific tax situations.  

TurboTax

TurboTax is a product of Intuit that is one of the leaders in the market for accounting software. TurboTax is quite different from TaxAct. Its most significant advantage consists in ease of use for its intuitive design and user-friendly interface. It is also pricier than many accounting programs, so with the use of its customers can get a good working experience. Both versions win a prize for public love thanks to its affordable price. Those who care about fanciness of product design should buy TurboTax. Let's look closer at what tools and services TurboTax is providing its clients with. Similarly to TaxAct, TurboTax offers a free version which is one of the most popular on the market. This is a tax preparation software which allows users to perform tax filing online. If you are not acknowledged with tax preparation process, this product includes a free guide to help you to learn all about the audit, managing accounts, and records, filling up tax forms, etc. All these complex tasks the system can carry out without a human help even by inputting the data from photos by itself.
The benefits of using TurboTax.

What is good in this tax software is that it is always updated in accordance with the latest tax laws. Also, this system is supposed to conduct an error check during the working process so that all tax calculations are highly accurate. As TurboTax features a user-friendly interface, it is very easy to use for people who are dealing with accounting software for the first time. Also, if your company is audited, you can ask for a free preceding audit from a TurboTax expert to make sure everything is alright or to fix mistakes. TurboTax is a cloud-hosted product which also has a mobile version so that you can easily store your documents online and review them in any place where you can access the internet. This option allows you to file a 1040EZ or 1040A and a state return for free and comes with unlimited email and phone support. You’ll have to pay $10 to import last year’s TaxAct return, though new this year is that you can access up to three years of prior TaxAct returns for free. Now, let’s make a quick comparison of the most popular accounting software for individuals by their price, design, and features.

 

 


Pricing

The cost is much lower than most competitors. Here are the pricing plans and list of versions:

  • Free - $0 (1040A and 1040EZ forms)

  • Plus - $25

(for rental property, investments, charity, etc.)

  • Freelancer - $39 (version for the self-employed, freelancers or independent contractors)

  • Premium - $51 (all types of filers)


 

It is quite expensive but user satisfaction is very high, so they usually don’t regret spending one more dollar for this software.

The pricing plans are the following:

  • Basic – $40

  • Deluxe – $70

(recommended to maximize deduction)

  • Premier – $100

(for investments and rental property)

  • Home & Business – $110 (for personal & self-employed)

H&R Block’s software is a solid competitor in the tax software market. Besides the brick-and-mortar offices, H&R block offers to its customer's software at affordable prices.

The list of packages are below:

  • Basic - $30 (W-2 import, step-by-step guidance),

  • Deluxe  -  $55 (calculating income from investments),

  • Premium - $75 (minimizing deductions),

  • Premium and Business - $90 (corporate tax returns, payroll and other).


 

Design

TaxAct unpleasant design may make you regret that you chose accounting to be your profession but its functionality will compensate this feeling as to enter data is as easy as in other products

TurboTax is easy to use for its user-friendly interface.  

The design is to high extent intuitive and the free version has become one of the most popular on the market.

Features

TaxAct features a plenty of tools and tasks to help the client. They are the following

  • possibility to get assistance from customer support 24/7 on needed tax-related questions,

  • import of the last year’s returns,

  • preparing taxes including 1040A and 1040EZ forms,

  • many more tools.

Like TaxAct, this tax software offers a lot of useful and inevitable features for individuals. They are the following:

  • step-by-step guidance,

  • digital filing 1040A and 1040EZ tax forms,

  • accurate functioning and double-checking,

  • keeping up with the latest updates in tax law,

  • ability to maximize tax deduction for different types.

With the use of H&R Block you can do the following tasks:

  • filing 1040A and 1040EZ forms,

  • W-2 import,

  • double-check the return,

  • getting customer support around the day and other.

 

 

Specialized tax software for accountants

It is almost impossible to keep records of books and accounts for a big enterprise manually. That's why nowadays accountants are taught how to use specialized tax software for a better and quicker work.

QuickBooks

The accounting firms that offer their auditing services to the clients have turned to professional accounting software, let’s say, long time ago. Since the time when accounting work became computerized, these programs had been significantly improved. On today market, the most popular software for accountants is, perhaps, QuickBooks.

The tasks performed by QuickBooks. The first QuickBooks product was introduced in 2014. Now, it is available in many versions including Pro and Pro Plus. The users are offered with an annual subscription as well as one-time license.

Generally speaking, QuickBooks helps accountants to perform a variety of simple and complicated tasks in a simplified fashion. It helps accountants to pay bank bills, prepare profit and loss statements and perform other standard accounting operations with a few clicks. Isn’t this impressive? Despite the fact that QuickBooks design is aimed to be as simple as possible, it still is quite difficult to use, especially, Pro Plus edition as it is designed for all industries featuring a lot of tasks. The main features of the product are listed below:

  • keeping all the transactions in one place;
  • tax calculation;
  • online banking;
  • viewing banking transactions, reports, tracking checks in one click;
  • filing all kinds of forms;
  • preparing profit and loss reports;
  • filing payroll taxes;
  • work paper management;
  • account management;
  • preparing financial statements;
  • saving client, vendor contact information;
  • import from and export to Excel along with saving formatting;
  • tracking sales and client payments;
  • sending invoices;
  • creating orders and other.
     

The benefits of QuickBooks

QuickBooks is known to be Intuit’s the most polished product. It combines functionality and pleasant appearance. This software allows keeping track of all transactions, the bills, forms and other documents inside the program as well as exporting information to different types of programs. When conducting audits for public companies accountants that work for accounting firms called CPA, Certified Public Accountants help their multiple clients who are different types of industries and organizations to get a valuable insight into the growth of their business to increase its profitability. Accounting software is designed to make it much easier. Boosting business productivity, making production more effective - all this can be achieved with the use of all-in-one platforms such as QuickBooks. The most important benefits are complying with the needs of most industries and seamless integration. It is enormously convenient that auditors may use QuickBooks by setting it according to the needs of any industry. Also, a good program should be able to integrate the results of work or financial investigation from different software to maintain all the operations and transactions within tax standards.

Intuit is one of the leaders in the market of accounting and tax preparation software for individuals, accountants, and small businesses. Besides QuickBooks, it has developed such advanced products as Pro series, Lacerte and other. One more product worth mentioning is Sage Pro developed for accountants to perform tasks from tracking expenses to preparing taxes but all these tools are a topic for the following articles.  

To tell the truth, all the main tasks performed with use of accounting software can be conducted by a CPA or accountant manually. Hiring an accountant is still the most favorite among small companies owners. Their responsibilities the CPAs and accountants are able to carry out manually include the following tasks:

  • conducting an audit which is an external examination of a public company’s books of records and accounts conducted by the Certified Public Accountant, or CPA, also called auditor, analyst, actuary, clerk and other. The CPA is a specialist who got a CPA certification or is planning to get it in the course of working for a CPA firm;
  • tax calculation services;
  • keeping records of books and accounts;
  • management services and other.

While company accountant doesn't even need to be educated in the field of accounting, the professional auditor should fulfill three main requirements, namely, earning bachelor's or master’s degree in accounting, passing a CPA exam, obtaining 1 or 2 years of working experience.

Conclusion

XXI century features a fast development of IT technologies that help workers to fulfill their responsibilities in a more efficient and simplified way. The world is changing all the time. Maybe someday in future machines will really replace workers at factories but for now, we can only observe how a huge amount of programs, applications, hard- and software is developed being actively implemented into the working process.

The individuals who need their taxes to be calculated have two options. They can either ask for help from tax preparation company or use some online tools. The benefit of using services of the tax preparation companies are obvious - you don't need to learn how to fill up the forms yourself but who can guarantee that people you trust are real professionals and that they will not take any additional money from you. Online products are a so convenient thing but you still have to learn how to calculate taxes with use of them. There exist a high risk of making a mistake in the tax return which is punished by imposing a fine.

For the large business owners, it is almost impossible to hold out without accountant’s services. They usually face a lot of challenges at the end of the tax season though to make their work easier, the tax software was designed. These products are intended not only to conduct the analysis of books of accounts but release the tax forms and double-check operations on-the-fly. One of the most significant benefits in the accounting work is that work should not necessarily earn a degree in the field to be able to use tax software as the most advanced of them provide their clients with guidance on tax preparation. In this article, we discussed the products for individuals and accountants considered the most popular on the market as well as other ways to get the taxes prepared. The programs discussed are H&R Block, TaxAct, TurboTax, and QuickBooks. Each one has its pros and cons. In conclusion, featuring a lot of useful tools they are designed to perform tax calculations and other operations.

 

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