 Income tax 2023-2024. Tax software options. Get ready and some coffee because we're looking at some useful hacks for income tax preparation. Hey, hey, I said useful hacks. Get that legacy media reporter hack off the screen for crying out. This is serious. This isn't some clown show. In the prior presentation, we discussed three general approaches that we will be using to get a handle on a grasp of the income tax code income tax preparation process, including by formula, which is what we generally want to be visualizing in our head. A more elegant, simplified formula rather than the entire tax form, which is going to be more difficult to visualize, but which we want to have good familiarity with. And we can find the tax forms at the IRS website, irs.gov, irs.gov. We'll discuss that more later. If you also have access to the software, the software will also provide you access to the forms as well. The software adding another level in that they make the data input easier so that we can run scenarios by doing data input in the software, letting them populate the forms and then compare the forms to the formulas that we can visualize in our mind and which we can replicate in Excel and will be doing in future presentations. Now let's take a little bit closer look at the types of software. So we discussed that there's mainly two different types of software. There's what I would call professional software and then the individual software. Both are good softwares to use, but they have different uses. Professional software, by that I mean that a CPA firm is going to be using that software for multiple different tax returns. Therefore, the incentive is to have the data input as easy, as clean and efficient as possible so you can crank out multiple tax returns. Individual software such as like a TurboTax, and I'm not affiliated or advertising either of these softwares. I happen to use Listert, but I'm not affiliated to them or anything like that. TurboTax is owned by Intuit, which is a large company that owns QuickBooks as well. But there's a lot of other types of softwares and we'll talk more about some. First, a word from our sponsor. Yeah, actually we're sponsoring ourselves on this one, because apparently the merchandisers, they don't want to be seen with us. But that's okay whatever, because our merchandise is better than their stupid stuff anyways. Like our Accounting Rocks product line. If you're not crunching chords using Excel, you're doing it wrong. A must-have product, because the fact as everyone knows of Accounting being one of the highest forms of artistic expression means accountants have a requirement, the obligation, a duty to share the tools necessary to properly channel the creative muse. And the muse, she rarely speaks more clearly than through the beautiful symmetry of spreadsheets. So get the shirt, because the creative muse, she could use a new pair of shoes. If you would like a commercial free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Possible free options that could be out there for individual softwares in future presentations. I just want to make the general point that when you're practicing something or whatever your uses are, you want to be considering these two major buckets of software and then possibly narrow down your search from that point to decide which software you want to be dealing with. So obviously if you're just doing your individual tax return, then the individual tax software might be easier, it might be cheaper to do. Your options for an individual tax return are going to be if you're just doing your own tax return to do it by hand, which most people don't recommend these days because in part the software has actually allowed the IRS to want more information. That's just how things go, right? So it used to be that the tax forms were quite simple. If I didn't have much income, I remember being able to just call in at one point because I had such basic information that I could basically it would be that easy to do. But as the information is more readily available through the use of software, the government wants more information. They want to be more intrusive. That's just how things work. So now even a fairly basic tax return has a lot of informational information in it. And so you probably want tax software to basically help you out to do it. You might be able to get access to free tax software. We'll talk more about options on that in a future presentation if your income is below a certain threshold. But some software would be worthwhile to do. Your other option, of course, is to pay for a tax professional to help out. In that case, in which case they're going to be using software as well. But they're more likely going to be using the professional software. So we'll talk more about that decision in a future presentation. If you have a business, then you're probably not going to be wanting to use individual tax software because it's designed for a person by person usage. And you would rather than have the professional software so that you can do multiple tax returns and you can do the data input more easily, more quickly without having to run through an entire interview process every time you want to make a change to a particular number. Now the professional software is LASERT because it's an older software was designed to be similar to like QuickBooks desktop in that you download it onto your actual computer. These days, more and more, obviously you have to check it online and so on to get the updates and everything. But some softwares are also basically online or web-based softwares in a similar comparison of QuickBooks desktop versus QuickBooks online. Although it's not exactly the same. I still think LASERT is the best, I think, but I'm biased on it. I've been using it forever. But with the online software, you might be able to access it from any place similar to the QuickBooks software. You have the same kind of, I still have questions about the security of the online software, not because their servers aren't secure, but because when you can access it from any location, if someone gets your password or something like that, you would think it would be easier to hack into the online software because you can access it from the cloud. But if it's on your computer, then they could still probably, you know, the professional hacker could probably hack it, but they have to actually get access to your PC than somehow you would think, which would be a little bit more difficult. Now, obviously, the online softwares argue that that is not the case because they have two-factor authentication and all that kind of stuff. But if you read the IRS newsletters, they are clearly stating that people that have Trojan or people that are trying to do some internet phishing scams are targeting CPA professionals and it looks like they might be targeting more of the professionals that have the online software. You would think because, again, they can access, if they can get access to the actual software, then they can access to the social security numbers and possibly file fraudulent returns and that kind of thing. So once you get into what kind of software you want to deal with, you might then have a question of, do I want to think about desktop software versus online or web-based software? Which of those two options would be the best option? And then, of course, you have prices that you're going to be dealing with from that point forward. LoCert's pretty expensive option, although they have different pricing tools on it because it's pretty widely flexible. You could find other softwares that possibly are cheaper, but they're usually going to be limited in functionality, possibly not being able to do as many state tax returns or something like that, or possibly not being able to deal with some foreign income type of situations as easily. So when you're picking the software, the idea would be that you would like to pick a software that's going to be able to grow with you if you're in a long-term firm kind of setting. Why? Because the software will update year over year. If you have more complex tax returns, that's more and more important because it's very useful to take the prior year's information and roll it over into the current year because if there's any rollover activities like a net operating loss or charitable contribution limits or that kind of stuff, then that stuff will be helpful to rollover. Depreciation schedules, all that kind of stuff is really nice to not have to do the data input again. So it's painful to go from software to software. If you're just doing really basic tax returns where you don't have that stuff going on, you're not really doing even schedule C's with that depreciation schedule stuff, then it might not be as bad if you had to move from one software to the other, although that initial move would still require a lot of data input to input the names and addresses. So if you're in a professional setting and you're choosing software, I would look into a software that you think is going to be a long-lasting software in general because moving from one to another can be a painful process. With the individual software, like I say, it's in a format that's going to be an interview type of format. If you can't get access to any other software, you might be able to get some access to this software to at least run some scenarios if you're practicing along with the practice problems, if that's the point of the software for you just to follow along with the practice problems. And if you don't have access to any of the software, as we do the practice problems, you can simply open the forms from the IRS website, iris.gov, iris.gov. You won't be able to do the data input, but we're not really focused on the data input into LASERT in our practice problems. It's not a LASERT course. We're focused on the idea of the number that needs to be put in place for income and deductions and then the impact that that adjustment will have on the tax forms. And then the impact software making it a lot easier for us to automate the jump between the scenario and the end result. Now, since I will be using LASERT, I just want to kind of show you where to go on that. LASERT is owned by Intuit. When I first started using LASERT, it was its independent software, and they were bought out by Intuit a long time ago now. So you could go to their website here intuit.com, Intuit.com, and at the top that you have the software. Notice they're leading off with TurboTax up top, and then they have QuickBooks and MailChimp. LASERT doesn't have its own line item up top, which just kind of seems a little strange to me. Sometimes that worries me, but I think LASERT is still going strong as far as I can tell. But if you go down to the bottom, if we go all the way to the bottom down here, I think mainly that might be because these things are kind of geared towards small businesses, which is usually who's accessing these items, whereas LASERT is for a professional software. So if an individual is buying something, they're probably not going to want to buy LASERT, they're going to want to buy TurboTax, and if you're a business, then it's more likely you're going to be doing more research on it. But in any case, I go all the way to the bottom down below, and then you have four accountants, and then you have your LASERT. So they have LASERT, they've got ProConnect, ProSeries. So you can look into those different options if you would like to as well and see what, and test them out where you can run the practice problems that we're running on them as well. And you might be able to get a free trial on many of them. So if I go into here, this is the Intuit accountants, LASERT-Tax software. And then we have the free trial up top. So if I go to the try it free, it says, see how you can tackle the most complex returns from anywhere, tell us about yourself, and so on. So you might, if you can get access to it for free, that would be a great tool to practice and run scenarios with. So you might want to look into that. If you start a new file within LASERT, if you plug in the tax return like 999 all nines, then you might be able to practice with just a practice client, although there's some restrictions to that. If we go to the pricing options, you have your pricing options here. And the typical pricing options is that you could pay a lump sum or you could pay basically return by return. And so over here, you've got LASERT Rep. This is the fast path only. So you got the 469 per year. And then I think you might have to pay basically more on a per return basis. So it can be a costly type of software. So again, you want to do your comparisons if you're looking into which software is going to be best for a long-term timeframe if you're looking at it from the standpoint of your business. Internally, the software looks like this. So this is actually the generation of the form. So the form 1040. And we can jump back and forth from the data input, which again, I'm not going to focus as much on the data input and how LASERT's data input are formatted versus other areas because they're going to be all similar in nature because they're coming from the same source document, the same source area, although it does take some time to get used to different softwares. But we'll run the scenario. I'll do the data input and then we can pull back to the form here and see the result of the data input on the forms. And we can also check LASERT has a great little tool here for the tax summary, which gives it to us in basically a formula basis, which we'll also do in Excel in part so that we can do a double check. That's something I actually do in practice for like an internal control over the system. Now, you can also go to the Intuit website. Just remember if you don't have any software and you want to go into IRS website, irs.gov, irs.gov. And you can type in form 1040 or any of the tax forms and you can get to the actual form itself, the related schedules and the instructions for it. So it's a little bit different in terms of the coloring, but it's blue, it's pretty blue, but the form is basically, is the form is the same, right? It's the form 1040 for tax year 2023.