Software Can Help Tax Filing
Monday, February 12th 2001, 12:00 am
News On 6
If God wrote the Ten Commandments, then Satan's literary work must be the U.S. Tax Code â€” which is why this is the time of year that tax preparation software comes to mind.
Instead of being a plan for living in 10 declarative sentences, the tax code is thousands of variations on the theme of Fork It Over. Tax software can help many of us wade through some baffling language, like the following from the Internal Revenue Service Web site (http://www.irs.gov):
``This document proposes regulations under section 7701 that address the Federal tax classification of a business entity wholly owned by a foreign government and provide that a nonbank entity that is wholly owned by a foreign bank cannot be disregarded as an entity separate from its owner (disregarded entity) for purposes of applying the special rules of the Internal Revenue Code applicable to banks.''
It's important to understand a few things before you spring for a tax preparation package:
â€”If you didn't keep good records, the software can't invent them for you. For example, if you used one of the electronic checkbook-bill paying programs but didn't classify expenses by tax category, you have the electronic equivalent of a shoebox of canceled checks.
â€”While it's less effort than tackling forms with a typewriter and calculator, it's still more effort than handing your records to a human tax preparer and signing the result. If you have a complicated return, you should consider if you want to invest the time.
â€”``The software made me do it'' is not an adequate defense if the IRS questions your return.
â€”If you're not itemizing deductions, save your money for something else.
That said, it comes down to which tax package is for you. The two dominant ones are Intuit's TurboTax Deluxe and H&R Block's TaxCut. Both will handle federal and state taxes, interviewing you and producing and printing the appropriate forms. You can find their claims on the Web at http://www.taxcut.com and http://www.turbotax.com. Both are promoting one free state tax module. Both will ``audit'' your return and flag discrepancies while making suggestions for deductions.
System requirements for both are toward the minimum end â€” 486 processor and 16 MB of RAM in the Windows 95 and later world, CD-ROM drive, color monitor and sound card.
For the Mac crowd, TaxCut wants to see 68030 or better and System 7.5.3 or later, while TurboTax wants 7.6 or higher.
If you're going to do online filing, a modem will enhance the experience.
Even if you intend to do your return a day before the April 15 deadline, buy the software you need now â€” as the Day of Doom approaches, the stuff gets hard to find, particularly some state modules.
Questions and comments are welcome. Mail to Larry Blasko, AP, 50 Rockefeller Plaza, New York, NY 10020-1666. Or e-mail lblasko(at)ap.org.