With its software TurboTax, Intuit has been a winner in tax preparation in the digital age.<\/p>\n
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Historically, Americans filled their own tax forms once a year using a hand-held calculator and following line-by-line by instructions from the IRS. The forms were cumbersome, especially for those with multiple income streams, and each error required starting all over again.<\/p>\n
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The need for help with tax preparation led to the emergence of an industry of tax professionals, some working solo, others in small groups or in national chains such as H&R Block or Jackson Hewitt. While these professionals offered valuable expertise, the process had several flaws and many customers had negative experiences. The customer needed to collect all documents comprehensively beforehand, and the fees were high. Many people procrastinated and then had to squeeze into scarce appointments before the April 15 deadline further adding to the stress. If you forgot or could not locate documentation for income, the tax calculations were inaccurate. Discovery of such income by IRS led to audits with potential for penalties. And, if one did not remember or know about all their possible deductions \u2013 such as charitable contributions \u2013 and assembled the appropriate documentation beforehand, the customer would not get those deductions.<\/p>\n
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Michael Chapman at Chipsoft, later acquired by Intuit, disrupted this market by creating a software program, TurboTax that could be sold directly to customers on a computer disc and run on a PC at home. TurboTax created value because it was easier to use than the line-by-line paper instructions and did the math automatically. TurboTax was less expensive than the services of a tax-professional. And, the customers could avoid the anxiety and hassle of visits to the tax-professional\u2019s office. People could complete their taxes in multiple sessions at their convenience in the privacy of their homes. The program made it easier to capture all possible credits and provide the educational value of following the flow of personal income and expenses that could inform future choices in earning and spending. As individual use of the Internet became more widespread, the program also became available online.<\/p>\n
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