There has been a rising reliance on tax preparation software in recent years which has helped engender resources like Tax-Compare.com, a comparison and review site for different tax software providers. How might the tax software industry be affected by the 2008 Presidential candidates?
Austin, Texas (PRWEB) June 20, 2008 – Tax preparation software has become a multi-billion dollar industry since the inception of the Internet. But will either Obama’s or McCain’s tax plan eliminate the need for tax preparation software altogether? Co-founder of Tax-Compare.com, Leo Welder, doesn’t necessarily think so.
“In order for there to be a major impact on tax software, the IRS is going to have to become the sort of comprehensive resource that tax software market leaders like Tax Cut from H&R Block and Turbo Tax are for their customers,” says Welder, who doubts that government agencies will have the vested interest that businesses do in helping people pay the lowest tax amount possible.
Most online tax software programs include a tax calculator and error check feature. Additionally, people who use tax preparation software receive help with everything from maximizing tax deductions to learning useful tax tips that can apply to those who work at home, people who have lost their jobs, small business and many other categories.
But the process of tax preparation has been somewhat costly. BarackObama.com states, “Experts estimate that the Obama proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees.”
Tax cuts and tax code reform have become major issues in the economic debate between the Presidential candidates, and the media has reported on the stark differences between each man’s views on taxes.
A summary of the candidates’ proposals can be found on each candidate’s website. JohnMcCain.com declares “A Real Choice For Simpler Taxes,” which offers simplification in the form of a two-rate tax code with a “generous standard deduction.” But Obama’s platform, listed on BarackObama.com, aims to reduce tax preparation time to “less than five minutes” by mandating pre-filled tax forms to be sent to taxpayers by the IRS.
While both candidates aim to eliminate the difficulties that make tax filing stressful for many Americans, only Obama calls attention to taxpayers’ reliance on third parties–tax preparers.
But paid tax preparation (using accountants or tax experts) is a different category than self-preparation (using tax software), which was used by nearly 20 million people in 1999 and 2000 and has since increased in popularity, according to a study done by IBM and the Urban Institute.
Perhaps the notion of community has something to do with the proliferation of tax software users. Databases like the “Live Community” on TurboTax.com, which Tax-Compare.com cites as a “Pro” in their review, provide answers to tax-related questions and allow users to share info and tips.
Some have argued that the tax preparation software and assistance are best left to the corporations. Others simply doubt that the IRS will be able to replace the tax software industry.
When asked for his response to the tax plans of the Presidential campaign frontrunners, Gaines Kilpatrick, co-founder of Tax-Compare.com, was unruffled.
“Everybody wishes they could do their taxes in five minutes, but when has the government ever been known to be fast?” says Kilpatrick, “It wouldn’t be surprising if many people were still utilizing tax software in 2009.”
Voting for the 2008 Presidential election will take place this November. It remains to be seen whose tax plan will be implemented for the 2009 tax filing season.
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For additional information regarding online tax software, visit www.tax-compare.com.
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