Evolution of Filing Taxes
The days of calculating taxes with pencil, paper, and adding machines are long gone. These days, it is all about using technology to manage and calculate taxes.
Tax codes in the modern world are long, complicated and confusing. With rules and loopholes for all streams of revenue, it is impossible for even the most brilliant financial minds to comprehend without help.
Small Business Owners Bear the Brunt of the Confusion
Because small businesses require so much time and attention just to keep in operation, calculation of taxes is a task left to accountants or sophisticated software. Most people simply keep track of revenue and expenses, then leave the calculations to applications. They hope for the best and prepare for the worst when the final tax bills are calculated.
Even accountants rely on computerized systems to calculate taxes. Some even admit that they do not understand how it all works.
Fortunately, the companies that create these incredible systems pride themselves on accuracy – even touting their application’s abilities to find those loopholes to save people money on their tax bills.
Accounting software makes taxes a simpler process for all. The most popular tax application programs are made by Quicken, H & R Block, and Intuit.
Quick Books (Quicken)
This mega-sized empire offers sophisticated programs targeted to small businesses. The main program includes simple ways to track and manage expenses and revenues, then spits out reports that make filing taxes a breeze. Business owners love the new mobile apps that allow them to catalog expenses and revenues in real time, saving them time and stress at tax time.
H & R Block
Known mostly for helping individuals file taxes, this company also creates proprietary programs used by accountants nationwide. Accountants almost never break out the old adding machine; rather they input numbers into a guided “interview.” The program then generates the forms and files them electronically. Of course, there are also less complicated applications available online that allow people to do go through a similar, less detailed process.
The makers of Turbo-Tax are some of the longest competitors on the marketplace of tax filing applications. They carefully research all of the relevant tax laws for individuals and small businesses, plug them into their “interview process” and voila – forms are completed and taxes are calculated in a matter of hours rather than days. Intuit also offers tax programs for professional accountants.
In addition to their programs, all three of these companies act as resources for confused taxpayers. Their websites are filled with free calculators, informative articles, and tax tables to help people wrap their heads around the inner workings of US tax codes. They offer mobile apps that do everything from track expenses, process payments, and reference. Because of these companies, taxpayers everywhere are more empowered and prepared than ever before for tax season.
contributed by Hank Newell, an accountant and blogger who is an expert in tax accounting, forensic accounting and specializes in Phoenix business appraisal. His advice and research has appeared on software, finance, and accounting sites and blogs.