Makers of business tax software are now marketing their products quite a bit to small businesses, like the many budding enterprises run by work-at-home moms. Women who choose to pursue small business opportunities from home will need a stable annual tax prep method, and some of them like the out-of-the-box tax software approach. Others swear by hiring a human to tally up their tax bill. Here are some of the pros and cons of using business tax software for your WAHM business.
Pros of Using Small Business Tax Software
In almost all cases, a tax software solution is going to be cheaper than going to a tax service for adding up all of those items that contribute to your final IRS bill. For relatively simple returns like those of a wage earner, software can be a perfect solution, and some freelancing work at home moms like it too. Over time, some software packages can help make filing annual returns a standard and orderly process while saving dollars.
With traditional box tax software, there were some unpleasant jobs involved in using these prepared tax solutions. The last thing lots of freelancers want to do after going through all of their records is the additional chore of installing and calibrating software on their personal computer. SaaS or "software as a service" has revolutionized the industry by providing software purchasers with the option of utilizing software programs such as small business tax software over the Internet. With SaaS, there's no installation, dealing with manuals or discs, or registering products just for one time or annual use.
Cons of Using Small Business Tax Software
The top reason that some work-at-home moms and other freelancers choose human tax preparation is simple: you can't direct random questions to a computer. Sure, tax prep software can accurately compute the numbers, but so much arbitrary confusion comes up during a tax filing process that many individuals involved in business or independent contracting really want to have a person directly across the desk from them.
Another reason that small business clients go to a tax preparer office is that many individual tax preparation professionals offer some audit protection services. This means that if the IRS does come knocking, the tax preparer will be the first line of defense for the client. This kind of assistance is invaluable to small business professionals who just don't have the time to handle any auditing inquiries themselves.
Over time, a human tax preparer can become a very trusted link to the legal and financial world that a small business owner has to deal with on a periodic basis. A tax preparer can counsel clients on whether to change a business structure to improve tax status, or with many other aspects of business outside of a simple annual tax filing. Lots of work-at-home moms and other individuals known as contractors, sole proprietors, or heads of an LLC will tell you that a local tax preparer who knows the business is worth her weight in gold.
These are some of the things that women running small businesses from home should think about when considering their annual tax filing options.