Many small and even start-up businesses are no longer following manual tax filing. There is a list of good and free online tax filing software and tools in the market. Each review site would highlight one brand or software as a better option over everything else in the market. Can you believe such a review? If not, how to find the best tool?
Do not blindly follow online tax filing tool reviews
The review site might be an advertisement to promote a particular tool. Even if it is a neutral site, it might be a blog article of a mere copywriter who just accumulates content from promotional sites into one article. Say, you take time to pick a reliable source written by someone with profound knowledge. Can you blindly follow the recommendations?
The answer is again, no. Even the best free online tax filing tool in the market might not be a good fit for your requirements and business. Thus, instead of running behind software names, learn the features that constitute a reliable tax filing tool.
Ease of use of the online tax filing tool
Your company might have a team of finance managers, or you could be the sole proprietor using the free online tax filing tool with no finance knowledge. Either way, it is best to avoid options with complicated interfaces, confusing navigation, and complex process.
It is not possible to find a tool that has every feature in just a click-of-a-button. You ought to pick the software with a simple interface and straightforward for the user to perform basic operations. It is not easy to see an interface and determine whether it is simple or not. Luckily, you are using a free tool. Download the software and utilize it for a couple of weeks before deciding on it.
For instance, you are a niche fashion distributor. You cannot find a free online tax filing tool specifically made for fashion businesses. Thus, it is imperative to pick a tool that can support different filing options and disbursement forms. Many software gives detailed information regarding the types of forms that it supports.
While choosing such a tool, remember to pick the one that supports state taxes, federal taxes, and more. It is not easy to find end-to-end compatibility in free tools. However, at least choose the one with adequate compatibilities to avoid intensive manual tasks on your end.
Tax refund options in the online tax filing tool
How are you planning to get your tax refund? Some tools allow you multiple options for a refund like PayPal, direct deposit, physical checks, and more. If you are looking for unconventional withdrawal methods, like prefilled debit cards, gift cards, and more, you might have to pick paid tools.
Database of deductions and credits
Some finance managers might know about all credits and deductions available for the business at their fingertips. Unfortunately, most of them don’t, and in many cases, a person with little finance knowledge might be handling the tax filing process. Thus, it is imperative to pick a free online tax filing tool with a database of deductions and credits suitable for the business. You can also find tools with a built-in checker for the accuracy of the deductions.
The one best advantage of an online tool is the avoidance of hardware compatibility. However, remember to check for browser compatibility, document compatibility, and more. If you are using mobiles for business operations, the online tool must have a mobile app available for download and for free.
Remember that the documents and data you use on this tool are confidential. Thus, the security features of the tool are important. Look for software with better encryption features. Read through the terms and conditions of the platform before you start using it.
Built-in planner, year-to-year comparison, and several other analysis options are available in many free tools. Some tools provide basic graphical interpretations of metrics, while others offer in-depth analysis, comparison, and planning features. If you are looking for advanced analysis tools, it is best to opt for paid tax filing software. On the other hand, pick free tools with at least simple analysis tools to help you during the decision makings.
Legal compliance of the free online tax filing software
All tax tools should comply with the Tax Cuts & Jobs Act (2017). Make sure that the software you are about to pick is a licensed one. Beyond this, from time to time, many new legislation will be in motion and the software should get updated to suit the same.
Option to upgrade to advanced paid versions
Today, it might feel profitable to use a free online tax filing software. But, as your business grows, it would be more efficient to have advanced tools with professional assistance, software-managed tax forms, step-by-step guidance, free return inspection, and more. If the tool has upgrade options with varying features, it would easier to scale the tool along with your business.
Else, you might have to install a new tool and allow time for your resources to get accustomed to the new interface, features, and more. This process would reduce productivity and efficiency.
The main error that any business would do in choosing a free tool is confusing with the functionalities available in free with the ones in the paid version. Most brands do not make it clear and usually up-sell the functionalities to make their tool look promising. Pick a reliable brand in the market, cross-verify your requirements with the functionalities, and download it for use. You have until the year-end to file taxes, but please do not download the tool a day before the deadline and hope for the best. It is best to install and file your taxes as early as possible, especially when you are using a new tool for the very first time.