Is it a good idea to use tax preparation software?
It's a good idea.
Using tax prep software can save you from forays to the post office or library searching out the copy of the right tax form for your specific needs...they are included in most of the packages, online services or on the IRS web site.
Take your time filling them out. Did you make an error? Don't mess with an eraser, or worry about getting another form...just backspace and enter the new figures. Do you want to check your tax liability? Try out different tax strategies to see which will save you the most in the long run. Is it a good idea to include some capital gains this year? If you pay estimated taxes, this is a great help in assessing bottom line results for a variety of situations (selling your house or getting that promised raise.) Tax preparation software gives you these opportunities.
Get the right forms. In pre-tax form interviews, you are asked questions and at times led to the proper form for your situation. You don't have to wade through a ton of forms to make sure you are filing the correct one.
Cut down on errors. With tax prep software, once information is entered it will then be carried over and entered wherever else it is needed. The chance that you will enter either the wrong piece of information or incorrect figures is high when you are sitting down with pencil and paper.
Reduce your time spent on next year's return. If you purchase the same or compatible tax return software, the smart update knows where to get last year's information. No more hunting around for last year's data...it is already available.
If you are still leery of tax prep software, try it for one year along side your accountant or your own efforts and see if the results are similar. Although the software is subject to a bug here and there, unfortunately we humans can be a tad buggy as well. The software can actually reduce the amount of errors on your tax forms.