The pitfalls of using tax software include lack of protection against an audit and inconsideration of certain financial circumstances, as noted by the Internal Revenue Service. Roughly 1 out of every 100 tax returns are audited or investigated further, as listed by Bankrate in 2012.Continue Reading
Popular tax software programs include TurboTax and TaxAct. Filing taxes electronically is not required; however, it is much faster compared to filing a traditional, paper return. The Internal Revenue Service instantly receives electronic returns once a user has submitted all data through the relevant tax software. Most professional tax preparers offer audit protection as a supplementary service. However, preparing a return with tax software requires that additional money be spent to receive audit protection. The Internal Revenue Service may conduct a mail audit, an office audit or a field audit. TurboTax offers audit defense as an additional fee, as listed on the organization's official website.
Tax software also offers electronic filing options that do not support all necessary schedules. The official Internal Revenue Service website contains information related to what forms are accepted electronically. Finally, tax preparation software does not consider all financial circumstances. Without speaking to a professional, a taxpayer may not include all pertinent information associated with a return. Therefore, there is an increased risk of not receiving the maximum return amount possible. If information is uncovered at a later time, an original tax return must be amended.Learn more about Income Tax