Sure, you can still do all of your tax preparation manually, but you can spare yourself the trouble when tax preparation software can do much of the drudge work for you. For a small, simple business — particularly a sole proprietorship — some basic tax preparation software might be enough to handle just about all of your needs, leaving you more time to focus on building and expanding your business.
Tax preparation software can:
- Simplify and speed up the preparation of state and federal business income taxes
- Make it easy to e-file your returns
- Help you claim proper deductions
- Help you deal with payroll taxes
- Help you deal with sales and use taxes
Assess your needsIs your business small and simple? Expanding and complex? Are you a local operation, statewide, national, international? The size and complexity of your business will dictate how powerful your tax preparation software needs to be.
Find income-tax softwareIncome tax software has become more sophisticated, particularly in dealing with businesses and business tax deductions. Look for a system that includes regular updates and a good online help service. Some major software providers have demos of their products online.
Find payroll-tax softwareIf you have employees, you'll need to deal with withholding of income taxes and a number of other taxes. Fortunately, there are software programs that can do most of the work for you. Many payroll software companies have you use their software online for a monthly fee.
Find sales-tax softwareSales and use taxes differ by state and community, so it's important to assess the right amounts. Fortunately there are numerous software solutions to meet just about any need. Be sure your software provider gives regular updates to track changes by taxing authorities.
Going globalToday's global economy presents new opportunities for small business, but it also poses new problems in dealing with foreign sales and use taxes. Software solutions can help you cut through the overseas clutter.
- Shop for a system that delivers regular updates on changes in tax laws and requirements.
- Make sure your computer system and the software you select are compatible.
- Software with lots of bells and whistles can be nice, unless it makes the software unnecessarily complicated, which can be frustrating and time-consuming.
- If possible, test-drive software before you buy. Some retailers and online sites offer demo versions.
- Ask trusted business associates and acquaintances for recommendations.