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Why Software is Winning the Tax Prep Wars

Written by TurboTaxBlogTeam
Published Mar 7, 2010 - [Updated Jul 10, 2019]
2 min read

In each tax season, several major players in the tax preparation market compete for your business. This year, early reports from Intuit said that sales of TurboTax were up 11 percent. Analysts and media pundits were quick to comment on the continued growth of online tax preparation.

Tax software is the fastest growing choice of U.S. taxpayers, growing at a double digit pace for the past 10 years. Last year, more than 36 million people used tax software. Professionally prepared returns have been flat or down slightly.

There are several reasons why taxpayers are making the switch to do-it-yourself tax software in record numbers:

In a tough economy, people are looking to pay less and get more for their money. TurboTax costs, on average, about $60 for a federal and state return compared to about $180 for storefront preparation.

Not only do people have less money to spend, they have less time to spend on doing their taxes. The average time to prepare a return using TurboTax is about 2 hours, and you can do it on your own schedule – whether it’s after the kids are in bed or while you’re watching late-night TV. People who make the switch to tax software do so because they’re done with the long lines, repeat visits and delayed appointments that are often the hallmark of a tax storefront experience.

No one wants to leave money on the table. More than half of TurboTax customers find they can claim deductions and credits they didn’t even know they were entitled to. That means a bigger refund. And a fatter wallet.

The word is out. Tax software is really easy to use. TurboTax guides taxpayers through their return step-by-step, using plain English. No math. No guessing which deductions and credits you deserve.

But you don’t have to believe us. You can read reviews from people who’ve actually made the switch and decide for yourself: http://reviews.turbotax.intuit.com/.

3 responses to “Why Software is Winning the Tax Prep Wars”

Milford Woodard says:

February 19, 2014 at 7:38 am

if your taxes are simple, no major deductions yes the software is very good and easy to use

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Income Tax Pro says:

April 5, 2010 at 5:06 pm

Tax Software is still better than completing forms by hand. Even in the above example with an incorrect distribution code, most likely the choice was to do the forms by hand or by Tax Software. Those that wish to see a tax preparer of course should do that at least once in their life to get some feedback. But most errors are from calculations, carrying numbers from page to page, and forgetting deductions that otherwise are routine for the Tax Software.

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Kristy says:

March 21, 2010 at 2:53 pm

Tax Software is dangerous in so many ways. What happens if there is an error on the document? Let’s say for example a distribution code on a 1099R? It’s supposed to be a 7 but it’s a 1? How will the common taxpayer know the difference?

Another example of this is a simple mistake but common mistake. That is the social security number. When the software program asks for their social security number they put it in the system from memory. They don’t look at the income documents to verify it. How many taxpayers look at their documents closely enough that they catch those errors?

There is a HUGE difference in getting your taxes professionally prepared than doing it yourself. Research a tax professional in your area and rely on the knowledge and the expertise of those that understand the documents they are putting into the software programs.

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