10 Reasons To Use Xero This Tax Season
No matter how much you might love your accounting software, you probably don’t love doing taxes. As overwhelming as this season can be, you don’t need to hibernate in a cave until April 15th has passed. Your accounting software is here to help, and so are we.
Xero (see our review) users are especially in luck! Xero is packed with tax tools and has some of the most robust tax features available in the accounting software world (coming in second only to QuickBooks Pro). If you are looking for a great software this tax season (or season to come), let these ten reasons to use Xero convince you.
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Through Xero you can take care of 1099’s. Xero integrates with Track1099 and Tax1099, two reliable apps that are easy for both you and your employees to use.
For users with Payroll support, Xero can assist with W-2’s. Not all US Xero users have Payroll support, so if you are interested in this feature, be sure that your state is supported.
3. Sales Tax Returns
Xero is the only software I know of that offers Sales Tax Return support. Xero partners with Avalara, a sales tax automation that determines your customer’s sales tax rate based on their billing address. Through this partnership, Xero users get Avalara’s free Sales Tax Return support. Avalara will pull data directly from your Xero account, so you have one less thing to do.
Whether you do your own taxes or you hire an accountant, you are going to need certain accounting reports (for more details see our recent post, How to Get the Most Out of Your Accounting Software This Tax Season). Xero offers key reports such as Profit and Loss, Balance Sheet, Statement of Owner’s Equity, and a Business Performance overview report. All of these reports can easily be exported via .csv, .xls, or .pdf.
5. Automatic Asset Depreciation
One of the best parts of Xero is the automatic asset depreciation feature. When filing taxes, it is important for your accountant to know about and understand your business assets. The software will help you prepare and process depreciation for any of your fixed assets, as well as create a depreciation schedule report.
Despite not having typical deduction capabilities like mileage deductions, Xero does offer extensive payroll deductions. These deductions include health insurance, life insurance, disability, employer 401k contribution, garnishment, and more.
7. Bank Reconciliation
Before you can even think about filing taxes, you have to make sure your books are up to date (all expenses in, all income recorded properly, and everything categorized correctly). The great thing about Xero is that your transactions are automatically categorized based on past categorization details.
When you file taxes as a small business owner who manufactures or resells products, you have to value your inventory at the beginning and end of each tax year. With Xero, you can track inventory throughout the year. Then come tax season, Xero’s Inventory Items Details report will help you calculate your COGs for the year, which you need to know to complete your tax forms.
9. Tax Resources
On top of key tax support and features, Xero also offers great resources to their customers. Xero has a blog with nearly 100 tax-related articles, including a Four Steps for Avoiding Tax Season Stress and Xero Gravity: Tax Headaches & Solutions for Freelancers. There are also a few helpful guides, like the Small Business Guide to Tax Filing, which are worth checking out.
10. Good Customer Service
If anything goes wrong, Xero is there to help. Although the company doesn’t offer a phone number, representatives respond to emails quickly and the Help Center and Community Forum are stocked with articles.
What’s in store for business owners using Xero? Peace of mind, extra time, and the chance to take taxes off the worry list.
Current Xero users–we hope that if you didn’t know about these ten tax tools before, you can take advantage of them now. If you aren’t a Xero user yet, maybe it’s time to consider a software switch. Read our full review to learn more about Xero.