It seems that no area of life is left untouched by computers and technology. This is also true when it comes to tax preparation. There are now several software programs available that claim to be able to do your taxes for you. And the allure of doing your own taxes, if not for the savings but also the bragging rights, can be tempting.
But there are some exceptions.
When not to lodge your own tax return
Here are a few scenarios where it might be better to sit this one out and let a professional handle your taxes:
You have a complex financial situation
This could be due to several factors, such as owning multiple businesses, investments, or having significant income from overseas. If your financial situation is anything but simple, it might be better to leave tax preparation to the pros.
You don’t have the time
If you’re already bogged down with work and other commitments, the last thing you want to do is add tax preparation to your to-do list. Filing your taxes can be time-consuming, so it might be better to hire a professional if you don’t have the hours to dedicate to it.
You’re not comfortable with computers
If you don’t feel confident using a computer or have never filed your taxes electronically before, it might be best to steer clear of tax software. The last thing you want is to make a mistake on your return that could cost you money or it becomes the subject of the dreaded ATO audit.
Not to alarm anybody, but the ATO has released data showing that in the 2017-18 financial year, more than 1500 taxpayers were audited over their rental claims alone, and around $1.3 million worth of penalties were handed down.
Ultimately, it’s up to you whether or not to use tax software to prepare your taxes. But if you find yourself in one of the above situations, it might be better to avoid caution and leave it to the professionals. In most cases, certified public accountants (CPAs) have access to the latest and most effective tax preparation software available (notice we said, “in most cases”? More on that later).
The benefits of preparing your own tax return using tax software
Here, we’re not simply talking about the off-the-shelf stuff like MyTax. We’re talking about new innovative tax software designed to help you take control and manage your taxes year-round. Apart from the obvious benefit of saving money, there are other key benefits when using tax software for lodging your own taxes.
You are in control
When you prepare your own tax return, you’re in complete control of the process. This means you can take as much time as you need to ensure everything is done correctly.
You’re more likely to get it right
Tax software has come a long way. The latest gen tax software combines innovative features with an easy-to-use interface. This makes it easier than ever to ensure the best possible tax return without worrying about making a mistake.
You can avoid potential problems down the road
It helps improve your financial literacy
By taking the time to prepare your own tax return, you can learn a lot about your financial situation. This knowledge can be invaluable when it comes to making decisions about your money in the future.
When to use tax software
Preparing your own tax return can be daunting. But it’s not as difficult as you might think, and the benefits can be well worth the effort. If you’re comfortable using a computer and feel confident doing your own taxes, tax software may be a great option.
These days, property investors can access a wealth of good advice to help their investments soar. However, there is also some not-so-good advice out there, especially when it comes to doing taxes. The consensus used to be that if your owned investment properties, it was more advisable to seek out the services of an accountant. However, with recent advancements in tax software, this is no longer necessarily the case.
Features like real-time reporting and live bank feeds are game changers for tax-savvy property investors. Now you can get detailed, interactive reports on individual investment properties or for the entirety of your real estate portfolio. This gives you the information you need to make informed decisions about your investments and identify potential problems early. In addition, live bank feeds mean that you can be confident that nothing is missed regarding your claimable expenses.
So, if you’re a property investor with a busy schedule, tax software might just be the best option for you. Just remember to choose a quality product from a reputable provider.
While we’re on the subject of tax software, it’s important to mention that not all products are created equal. Some tax software is better than others.
For example, TaxTank is purpose-built tax software for Australian taxpayers who own investment property. Their powerful tax help platform integrates an automated depreciation tool that makes it easy for property investors to get the best possible tax return every time. And if you are worried about an ATO audit, the software also offers secure document storage to safeguard your information.
Thanks to the wonders of technology, tax help software like TaxTank can easily handle the complexities of rental tax returns, meaning you can do your taxes without worrying about making a mistake.
Final thoughts
So, if you’re considering using tax software to prepare your taxes this year, be sure to research and choose a platform that’s right for you. And when you do, you will unlock the benefits of being in complete control of your tax return and saving time and money in the process.
“The opinions expressed by BizWitty Contributors are their own, not those of BizCover and should not be relied upon in place of appropriate professional advice. Please read our full disclaimer."
