Cloud based tax preparation software products have become quite popular in the recent past. The number of people embracing software utility in filling in tax forms and filing their returns in the US is growing every year. According to the IRS, over 112 million taxpayers filed their returns via the e-file service in 2012. If you are considering enlisting online tax services to file your returns this year, it is important to think through the pros and cons of both methods.
The cloud based tax preparation software will store your data online. Basically, the two programs operate the same way. However, the major difference is the data storage location. It is worth noting, though, that cloud-based software will have more operational benefits as compared to local data-based software.
Cloud Based Tax Preparation Software vs. Local Data Based Software
To begin with, if you are operating from cloud based tax preparation software, you are unlikely to experience issues with compatibility with your computer’s operating system. The reason is that you access it from a browser and not your local hard drive. This may be anywhere: on your laptop, desktop computer, mobile phone or tablet. It doesn’t matter whether you are using a Windows, Android or iOS device – all you need is an internet connection. A desktop-based program will be limited to a specific operating system. Hence, it will only work on selected devices with compatible features, unlike the cloud-based software.
If you use cloud based tax preparation software, your returns are saved on secure servers together with those from previous years. They are safely stored and you can easily access them any time you want. With a desktop program, all data is at risk of loss or destruction since it is only stored on the device’s hard drive. For instance, if the device develops technical problems or the operating system fails, there are no means to retrieve the data.
If you decide to use a desktop program, you have to keep downloading and installing updates every time the program needs an upgrade. With a cloud-based program, you will never have to worry about maintenance costs and procedures. The software owners take care of that. They also fix all bugs and update tax laws so that everything is automatic from your end. Every time you access it, everything will always be ready for you. Of course, you will always have the freedom to make a choice on what’s best for your needs.
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