==== ==== To help with your taxes, buy the #1 tax software TurboTax here: http://vur.me/s/TurboTax0 ==== ====
The way taxpayers have been preparing and submitting their tax returns to the government has evolved throughout the years. It started with manual filling of IRS forms by tax advisors, continued with the development of professional tax software that do most of the calculations for the tax preparers (allowing them to focus on tax advisory and planning) and ends with the most recent trend of e-filing, which allows taxpayer to prepare their own tax return without using a tax professional and submit their tax returns directly to the authorities online! So, where do we go from here? Is e-file taking 100% of the industry? Is the tax preparer profession doomed? Some believe the future of tax filing is a combination between online tax software with "real-life-event-approach" and direct access to live tax professional for on-demand advice. Back in the old days... Before e-file and before tax software it was the tax professional who collected the relevant data from the taxpayer (which often brought a shoe box full with bills, receipts and tax information) and then spend hours (if not days) to manually fill out all the tax forms required by the IRS and calculating each and every line in each and every form. This extremely time consuming task, done to the light of many candles as you can imagine, left little time for tax advice or tax planning, resulted in more errors and resulted in longer processing time for a refund. Computers, the super heros of the tax industry... When computers arrived to the scene, the tax industry has slowly started change. Tax professionals, who quickly adopted the new comers, were able to prepare a return faster and with less errors, mainly due to the use of basic spreadsheets that made tedious calculations a much easier engagement. However it was still a manual process to fill out the actual tax forms, and mailing them to "Big Brother". Professional Tax Software - the real change maker... It was not until professional tax software became available, when the industry saw some really big changes. Those new creatures had a library of tax software in them, permitting the users to key in, change, erase and add the tax data, and then print a complete return, all done on the computer. No more manual. Wow. Suddenly, tax preparers did not have to do any manual form filing, any manual calculations; it was all done by the software. The preparer was in charge of collecting the data, entering it into the software and after error proofing, just click to print and "halleluiah", it's all ready to be filed. Still submitting the return was
done by the old fashion, U.S. post office. This new development allowed the tax advisor to focus on tax planning, maximizing the taxpayer refund and looking at the big picture, now that all the manual work has been taken by the software. Consumer Tax Software - can they really do-it-themselves? After the professional tax software idea proofed to be successful, some computers geeks decided to take it to the next level and allow almost any John Doe to act like a tax professional. How did they do it? The geniuses simply took the basic features from the professional tax software, the most common forms, the most common deductions, the most basic credits and package it as a doit-your-self tax software. Even if it started slow, it really caught up and quickly millions of taxpayer dropped their tax advisors and cheated with Turbo Tax, Tax Cut and alike. For much lower fee, John Doe, could now prepare his own taxes, at 2:00 o'clock in the morning, enjoying a fresh cup of coffee at his kitchen table. No more, going to the tax professional, no more waiting days for the returns, no more paying high fees, finally FREEDOM (the only issue with these packages is that you had to actually buy a software and install it on your hard drive before you could use it. So, you could only use it at your own computer).  Submitting the returns to the IRS, as before, was done by printing, signing and mailing. For the tax preparers, this was a shocker, the sky is falling, and nobody needs us any more... Help, arrived from an unexpected source, the government. As the tax software became easier and friendlier to use, the tax laws became much more complex. So for many taxpayer with simple returns, the do-it-yourself solution worked pretty well, but more all others, the lack of advice from a tax advisor, resulted in errors, higher taxes, and more IRS audits. Tax preparers are safe again. For now...  E-file and Online Tax Filing, today's new best sellers To make things much worse for the tax preparers, some "wise-guy" invented something called internet. At first, the tax industry did not really pay much attention to it, but then, remember those computer geeks from before, they decided to take the do-it-yourself software and offer it as webbased software. BOOM. Not only that a taxpayer can prepare the return without a tax preparer, he or she, can now do it even without buying software, from any computer, any place any time. Then the last straw came, the government decided to allow taxpayer to transmit their tax returns via that internet thing, instead of printing and mailing them. They called it E-File. BINGO. Taxpayers who E-Filed their return, considered VIP by the IRS and received their refund days faster than all them tax returns mailers. The IRS even solicits taxpayer with lower income to E-File by allowing them to do it for free, no transmitting fees. And as for the mail in your return? It's gone, no more papers, no more post office. New names popped up, TaxSlayer.com, TaxAct.com while old and familiar names suddenly changed to online: TurboTax Online, TaxCut online. They all started to fight over the online tax filer. Prices of those solutions range from FREE to over $100 and depend on the complicity of the return. Most of them are what industry analysts describe as Form-Based. It means that the
software will take you through the form that you need to fill out, ask you for the applicable data and plug it in the form itself. This approach works well when it comes to very basic returns, but with more complex returns that includes self employment income, home sale, investment or rental properties and other less common issues, a better approach is the "Real-Life-Event-Tax-Guide". "Real-Life-Event-Tax-Guide" - the future of tax filing is here... When you try to think what is it that you are looking for from your online tax software, you quickly find out that you are looking for more than just a "form-based" software. You want your online solution to really understand you and your tax situation. You want a partner that could advice you how to save on taxes, and how to maximize your tax benefits from everything that happened to your during the year. For that reason several online tax companies are developing the "Real-Life-Event-Tax-Guide". When using such a solution, you will be asked to talk about the events that affected you in the year, marriage, new baby, move to a new house, started college, changed employment status, etc.. You can also choose from a list of events already identified by these websites. When you do that, the website will explain, guide and advice you on how to maximize your tax benefits relating to this event. For example, under the "we had a new baby" event, you will be informed that "the first tax break you want to claim is additional dependent. You do that by listing the new baby's full name (as it appears on his/her social security card), social security number, relationship (son, daughter, child, etc...) and check the CHILD TAX CREDIT box as long as the child is under 17 years old, is a U.S. resident, lives with you more than half of the year and you provide him/her more than 50% of his/hers annual income. Thirdly, if both parents were working (or one a full time student) you can claim Child and Dependent Care Credit if you paid for someone else to care for the child. Use form 2441 to report the qualified child care expenses and the credit." "Advice-On-Demand", where the future leads us. Where do we go from here? I believe the future is in online tax solutions that offer its users to ask any tax question they might have, while preparing their return or doing some tax planning and pay only for that question. This "Advice-on-Demand" feature allows taxpayer to benefit from the low rates of online tax filing, but still get full access to experienced tax advisors that can save them a lot of tax money, error proof their returns and provide them the much needed confidence that they ask for the highest possible refund and that their return is 100% correct with the lowest risk of IRS audit. Conclusion The way Americans have prepared and filed their annual tax returns has dramatically changed over the years. No one can really foresee the future of tax filing, several companies have already developed a new approach that looks like the beginning of the future. With "Real-Life-Event-TaxGuide" and "Advice-On-Demand", the company offers its users the best of both worlds: unique user-friendly, event-base, online filing solution at low rates and the benefit of an experienced tax professional that charges only for the information users need.
HAPPY TAX SEASON TO ALL.
http://Taxtreasure.com : As real people we understand that online taxes should be easy, simple, fast and maybe, maybe even fun (when, lets no go overboard). Because of that we at Taxtreasure.com developed a unique approach to online tax preparation which takes the hassle and tension off the table. We have designed a REAL-LIFE-EVENTS solution that does not bores you with endless questions and scary forms, but instead, ask you to simply tell us: "what happened to you this year"? All you have to do, is to tell us (or choose from our event list) what really happened to you, and we in return, provide you with valuable information that will help you to better understand what, where and when to report. We will also suggest how to save on taxes based on the events that you went through this year and advice you on how to maximize your refund in light of those events.
Article Source: http://EzineArticles.com/?expert=Tal_Rozen
==== ==== To help with your taxes, buy the #1 tax software TurboTax here: http://vur.me/s/TurboTax0 ==== ====