Why Learning to Prepare Tax Returns by Hand is Crucial

Tax formThe tax season has officially started.

While established tax preparers will be putting their tax software into overdrive this season, we’d like to take this opportunity to talk about the importance of NOT using tax software as a student learning to prepare taxes.

Why? Here’s why we assign students paper tax returns to file and encourage them to learn how to prepare by hand before using tax software.

 

You Have to Learn First

You know that old adage “You have to learn to crawl before you can walk”? That’s pretty much true for learning anything new. For tax preparation, you need to learn, in depth, how tax preparation is done without having a program guide you. If you use tax software when starting out, the program does the work and you are not learning what you need to learn – which is tax law and the flow of a tax return.

The flow of a tax return can only be learned and understood by going through the process manually (the hard way). For example, before Form 1040 can be completed, the completion of other forms may be required.  As those forms are completed, they too, may require the completion of additional forms.  So you need to understand how each form reports back to the others and ultimately to Form 1040 in order to accurately complete the return.

 

You Can’t Always Trust Tax Software

Preparing returns by hand aids in preventing errors when entering information into tax software.Software is developed by humans, and humans make mistakes. So chances are, your tax software isn’t always correct. Knowing how to prepare a return by hand aids in the checking process to ensure the return is flowing correctly and that totals are reported on the correct forms.

Tax software programs also don’t always ask all the right questions – which means you could miss something along the way. You could also end up entering information in the wrong places if you don’t have a firm understanding of the tax law or the flow of forms and are relying on tax software to know that for you. The result in both situations would be an incorrect return that you may not even notice if you don’t know the tax law.

In addition to all of this, sometimes certain tax forms are not available in a program.

 

It Makes You a More Competent Preparer

Clients want a preparer to be able to explain how their return was prepared.  If you don’t understand the flow of a tax return, you can’t explain how the return was prepared.

Without a good base of understanding you could miss things. Once you have a good understanding, then you can add tax software.

 

The Best Way to Learn

Have we convinced you that you need to prepare returns by hand so that you understand both the flow of a tax return and the tax law itself? The best way to learn is to prepare tax returns manually while going through a tax course.  By applying the knowledge learned in a tax course in this manner, you can internalize it. After completing the tax course, you can be introduced to whatever tax preparation software you choose and will become a competent tax preparer given practical experience.

Thinking about learning tax preparation or need to train new employees? Check out our Chartered Tax Certificate Programs.

 

More Great Reads

How to Choose the Right Tax Education Provider

What is the Next Step After the Comprehensive Course?

Hiring and Training Tax Preparers for the Upcoming Season

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3 thoughts on “Why Learning to Prepare Tax Returns by Hand is Crucial

  1. Thanks Chunk for your valuable post about ” Why learning to prepare tax return by hand is crucial”. As mentioned by you it is really important for beginners to have a entire knowledge of preparing the tax return . Depending entirely on tax software may not give he beginner an entire idea of the procedure. Its always better to learn anything manually. Its gonna be beneficial in the long run. Doing anything manually would enhance your capability. Preparing Income Tax return involves a lot of forms to be filled, so it is better done manually as a beginner, you will have a keen knowledge.

  2. Preparing tax returns for clients is a popular field. Preparing tax returns for clients in need of assistance enables you to earn an income while meeting the needs of your customers. Many companies offer classes that teach you how to prepare tax forms for clients, family members, and friends. These training programs also allow you to learn valuable tax strategies to save on your own taxes.

  3. Absolutely. Learned the manual way and not so long ago. Had to have the handy eraser at the ready, seemed like a chore then, but eternally grateful now. Definitely an asset in mastering any topic, I think there is probably some correlation psychologically with the actual activity of writing and understanding and maybe retention and I don’t mean “keying” the information. I also completely agree that it enhances your ability to explain the transaction to your client.

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