Deciding whether or not to go with desktop tax preparation software is always a difficult choice, especially since many of these companies offer nearly all of the same features in online versions for a fraction of the cost. Through countless hours of research we have created this page in order to help you, the buyer, make an educated decision when choosing between tax preparation software you purchase and install and their online tax software counterpart.

About Online Tax Software

Online Tax Software was first introduced into the market around 1993, and has been slowly gaining in popularity ever since. Many companies even offer a free version of their software online if you meet certain criteria. Online Tax Software works much like desktop software except instead of purchasing a disk or a download you instead log on to an online interface to access your data. There are numerous benefits to using an online service which will be highlighted below, as well as any and all associated downsides.

Installation

No installation required. An added benefit to this is that since you are not installing any new software onto your computer you do not have to worry about compatibility issues.

Location

You can work on your taxes anywhere you get the internet. You are not limited to the one computer you installed the software on.

Updating

One of the biggest advantages to online tax software is that it updates automatically. There are no downloads to install, or updates to load.

Data Backup

Online tax software will automatically save your data as you are working and before you log out. With desktop tax preparation software you have to establish save options, and even then it is recommended that you also save a backup to a USB, CD, or some other form of online backup.

Disk Space

Online tax software does not use any disk space.

Free Trial

With online tax software you are able to enter in all of your information free of charge. This allows you to decide whether or not you like the online interface, and if that particular tax software is the right one for you. You are only charged once you are actually ready to file your taxes.

Security

Online tax software uses the same security tactics and encryption technology as online banks.

About Desktop Tax Preparation Software

Desktop Tax Preparation Software and been an viable option for many people since the early 1990's. There are two ways of obtaining this form of tax preparation software. You can either buy the software from a store and install the disk yourself, or purchase and download the software from the vendor's website. There are several benefits to having all of your data stored on your computer instead of on the internet and being able to access that data any time regardless of internet connection.

Length of Data Retention

Since all of your data is stored on your computer, the information you enter into your tax preparation software remains there until you manually delete it.

Importing

With high profile tax preparation software such as Turbo Tax there are more options when it comes to importing your data from outside sources.

Sharing

If the software license permits (which most do) you can use a single desktop copy to file returns for everyone who lives with you (i.e. siblings, children, etc.)

What-If-Testing

If you used a desktop tax preparation software the previous year, you can copy your data and run "what-if" analysis projections for the current upcoming year.