Are You Overpaying Taxes If You Use Tax Preparation Software?

Written by Richard A. Chapo

For many business ownersrepparttar answer to this quandary is tax preparation software. Fill out a fairly simple interview, click “print” and out comes a completed return that will pass muster withrepparttar 149642 IRS. The answer to all your problems…or is it?

Can One Software Program Cover All Businesses?

Take a moment to considerrepparttar 149643 wide range of businesses that exist inrepparttar 149644 United States. Now cut that number down to those that can be categorized as “Internet businesses”. If you were asked to write a business plan to provide web design services to each of these services, how long would it be? It would be huge and completely useless because each business would have different needs. A Internet business selling flowers would have completely different needs from an online bank which would have different needs from a hosting company and so on. The only way you could create a practical plan for all Internet businesses would be to offer a collection of general services they could all use on their sites. Tax preparation software designers haverepparttar 149645 same problem.

There are over 15,000 pages inrepparttar 149646 tax code and over 100,000 pages of regulations interpreting those pages. Changes are made torepparttar 149647 tax code ever year, and new regulations are issued constantly. If one were to create a list of questions for every tax deduction and credit detailed in those pages,repparttar 149648 list of questions would berepparttar 149649 size of a phone book! Yet, tax software programmers have somehow boiled it all down to a simple 30-minute interview process? Common sense should tell you that doesn’t make sense.

As practical matter, tax software programs are designed to make sure that you claim a general set of deductions that are applicable to businesses across all industries. Most programs try to mask this fact by asking you to identify your business before proceeding. For a lark, you might try selecting another industry and then running throughrepparttar 149650 interview process. You will find thatrepparttar 149651 interview process is modified a bit, but you are still being askedrepparttar 149652 same basic tax deduction questions.

Tax Deduction for Alimony Payments? - Yes!

Written by Richard A. Chapo

Over 50% of marriages end in divorce inrepparttar United States. Many divorce decrees include provisions forrepparttar 149641 payment of alimony. The IRS takesrepparttar 149642 position that such payments constitute a form of income and create an alimony tax deduction forrepparttar 149643 person making payments.

According torepparttar 149644 IRS, alimony payments are taxable torepparttar 149645 recipient inrepparttar 149646 year received. In turn,repparttar 149647 person payingrepparttar 149648 alimony can claim a deduction forrepparttar 149649 payments ifrepparttar 149650 following tests are met:

1. You and your spouse or former spouse do not file a joint return with each other,

2. You pay in cash (including checks or money orders),

3. The divorce or separation instrument does not say thatrepparttar 149651 payment is not alimony,

4. If legally separated under a decree of divorce or separate maintenance, you and your former spouse are not members ofrepparttar 149652 same household when you makerepparttar 149653 payment,

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