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Differences In Tax Services

Jan 8, 2008
While all tax services achieve the same result, there are many differences in tax services and people have learned to study those differences carefully before they file their tax returns with the Internal Revenue Service each year. The changes in tax law might affect the type of tax services that are needed and quick preparation may not be the right route to take for some taxpayers.

Many businesses that prepare tax returns meet the minimum requirements to operate as a business. There may be only one person in-house that has completed a tax preparation course and that business might rely on that individual to scan through the tax forms that were prepared by someone in training. This sort of tax service organization might miss minor errors in deductions or income earnings because there are no guidelines in place to keep them from happening.

Tax service organizations that are franchised will prepare taxes in the same manner year after year. Most will offer significant discounts to returning customers in the form of free preparation for State tax forms if the person has the Federal tax forms prepared for the current tax year. The tax preparation software used by franchised tax preparation services is verified for accuracy and tax preparers must undergo a rigorous training and recertification schedule in order to prepare tax returns every year.

The differences in tax services might be subtle and overlooked by many tax filers. Some people will become aware of these differences only after the final refund amount is provided. These tax filers are relying on computerized software programs to prepare taxes and some tax programs will not be updated to reflect current tax law and certain deductions will not benefit the taxpayer during the current tax year.

Some tax programs will transfer old information into the current year's tax return program and the taxpayer who prepares the individual tax return might not realize that the tax form contains any errors until the tax information has been entered in several blocks. Some tax preparation programs will not allow users to start a new form and the outdated program might not store the tax return for the previous year.

To test the differences in automated tax filing programs, some taxpayers will use several programs to prepare tax returns. The information they enter will be exactly correct but the tax refund might be larger on one program that is shown on another. Instead of making tax preparation a quick and easy process, many taxpayers feel uneasy about the information in the tax forms and will spend many hours double checking figures to make sure the program translated the information correctly.

While online tax preparation is always possible, people are discovering differences in the fees that are charged for filing online. The Internal Revenue Service provides electronic filing at no charge for low-income families and the same family will be charged filing fees for the Federal return and State return if they use tax services software that is provided by a tax services franchise operation. If an individual tax return includes a home business operation, then additional fees will be assessed for preparing a Schedule C and profit and loss statements at the end of the calendar year.
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