You’re online reading this blog post so you know that technology can do a lot, usually making our lives easier. For example, can you imagine filing a complex tax return without the aid of tax prep software? Well, IRS statistics show that for fiscal year 2018, about 12% of individual federal tax returns were filed on paper (but some of this could have been prepared using software). The balance were prepared by a paid preparer, or otherwise online or via the free file system. This is still a lot of paper filings given a total of almost 153 million individual returns files (about 18.6 million paper filed) (2018 IRS Data Book, p 2). I think many of these paper filed ones are fairly simple returns, perhaps with just one or two Forms W-2.
When using tax prep software, you’re asked questions and you need to enter information from your tax reporting forms, such as W-2 and 1099. Good tax prep software performs the required calculations and produces a return that you can print and file or much easier, e-file. It doesn’t really matter much what the return looks like, just that your required information is on it.