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Tax Software

ImageA lot of people buy tax software, hoping it will be a cheap solution to their problems. They think that because it is software, you can just push a button and it is all done. But software is just a tool, and you still need to know what you are doing with it.

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Each year I meet people who have used or tried to use tax software to do their taxes. Tax software is a tool, an alternative to filling in all the paper forms, and it provides the ability to electronically file your tax returns. It does not stop you from making errors, or missing things if you don't fully understand tax.

I had one customer come in, after several years of using tax software. They had missed something key, which caused them to get a refund of about $2000 per year that they were not entitled to. By the time Canada Revenue Agency found out, they had to take out a loan to pay off the taxes they owed.

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Tax preparers are able to work with paper or software for preparing tax returns. There are frequent changes to the tax laws, and your tax preparer keeps up to date with all of this to ensure they claim all the allowable deductions.

The good news is that your tax preparer can fix most errors in previous tax returns, by making adjustments. The thing is, that if you owe money, you will still have to pay it. If you are using software, it makes sense to check with a tax preparer to make sure you are not in for a rude awakening.

Pat

 
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