Home > Tax Tools for Globetrotters
Globetrotters   If youíre an American citizen or a green card holder, you have to file your taxes each year regardless of where you live and work.

   Chances are youíre torn between using an on-premise solution or cloud-based tax software.

   A cloud-based tax software is generally cheaper, more reliable, easier to use and scalable.

   Follow along as we explain in detail why you should choose cloud tax tools over on-premise solutions to ensure your taxes are filed accurately and promptly. But first, hereís a quick comparison of the two options.

   Cloud-Based Tax Software vs. Desktop-Based Tax Software

   Cloud-based and desktop-based tax tools differ in various aspects, including:
  • Security: Cloud-based tools often offer more security features, including high-level encryption and two-factor authentication.
  • Device limitations: A cloud-based tax tool isnít limited to specific operating systems or devices, unlike desktop tax software.
  • Updates and backup: With a cloud-based tool, you donít have to update any software or back up your data yourself. Cloud-based tools are configured to do that automatically.
  • Internet connection: A desktop tax software is a better option if you know youíll be in places with poor internet connectivity.
  • Privacy: Some cloud-based tools have recently been caught sharing sensitive user data, giving desktop-based tools an edge in this area.
  • Prices: Cloud-based tools generally offer more flexible pricing compared to desktop apps.

   The Benefits of Cloud-Based Tax Software

   If you go for a cloud-based tax tool as a globetrotting expat, here are the benefits you stand to enjoy:

   1. Work on your tax details on any device and from any location

   Letís say you have the Windows app for your tax tool on your laptop. What happens when you are without that computer and need access to your tax information? Thatís where a cloud-based tax tool comes in handy. All you need is an internet connection and a web-enabled device -- whether you're on mobile or desktop.

   This ability to access your tax details on any device is also why cloud-based tax software is better for globetrotters. Regardless of where you end up, simply connect to the internet, log in into your account, and you should be good to go. Remember to log out and clear your history if youíre using public or third-party devices.

   2. Automatic backups

   You might lose your data forever if your desktop app crashes or you forget to save your information after entering your tax details. There are no such worries with cloud-based tax tools. When you enter your information, the software automatically uploads it to the cloud.

   Furthermore, entries and records from previous years are saved in the cloud so you can retrieve them anytime you need them. And if youíve been filing taxes, you know such information is useful for rebates and reliefs.

   3. Automatic updates

   Cloud-based tax tools update automatically, which is great for security and usability. With desktop-based tax tools, you must manually update the software frequently. Without updates, the software can become vulnerable to hackers and crash easily.

   4. Data security

   Just like cloud storage software, cloud-based tax tools have evolved over the years to provide excellent data security, even when youíre transferring files. Many come with robust encryption protocols and extra security checks like two-factor authentication and biometric verification. That way, no one can access your account without your permission.

   5. Integrations and tax law updates

   If you save your data in tools like Calendly, QuickBooks and Google Sheets, youíll appreciate that tax software tools now provide integrations with such tools. This will make it easier for you to schedule and add information without having to do so manually, like on desktop apps.

   Another critical aspect of tax software is that they stay up-to-date with tax laws. That means that the design of the apps and even the suggestions on the app are usually what the IRS requires to ensure tax compliance. Desktop apps are usually not as intuitive.

   6. Cheap and flexible pricing

   Cloud-based tax tools often offer flexible subscription-based pricing. Unlike desktop-based plans, cloud tax services allow you to pay based on what you need done. For example, you might not be required to pay if you only need help with specific aspects of your filing. Plus, you can opt to have experts help you at a fee when you hit a roadblock.

   Also, cloud-based tools are generally more scalable. For instance, you can simply upgrade to a higher plan if you need help with tax filing for a small business, compared to possibly needing to download a new tool for that.

   Are There Any Disadvantages to Using Cloud-Based Tax Software?

   Yes, there are a few cons of using cloud-based tax tools, including potential internet issues and privacy concerns. Let's walk through them.

   The need for a reliable internet connection

   If you travel to a place where your internet connection is spotty, you might be unable to retrieve or work on your tax details. As a result, you might not be able to track your taxes properly, and you might miss filing deadlines. We recommend that if youíre using cloud-based tax tools, always verify if your next location has a decent internet connection before heading there.

   Note that your tax software will only be as fast as your internet connection. This means that if your internet connection is slow, your tax app will run slowly, and you wonít be able to complete tasks quickly. In such instances, some of the work you do might not be saved to the cloud.

   Privacy concerns with cloud-based tax apps

   In July 2023, a group of U.S. lawmakers, including Bernie Sanders and Elizabeth Warren, reported that some cloud tax software companies were sharing user data with Meta, Facebookís parent company. The tax prep companies named include H&R Block, TaxAct and TaxSlayer.

   The information they shared included taxpayer names, filing status, estimated adjusted gross income, the names of dependents, refund amount and the amount of federal tax owed. The investigators recommended that the IRS develops its own tax filing app to reduce such incidences.

   To be safe, double-check the track record of the cloud-based tax service you choose. Avoid online tax services that have been mired in data breaches and sharing user data with third parties. One way to find out who they might share data with is to check their privacy policies.

   Conclusion: Consult with Tax Experts

   By now, you must have been convinced that cloud-based tax tools are much better than desktop-based tools. Cloud-based tools are generally easier to use on the go, secure and oftentimes cheaper. However, remember that tax software is merely a tool. You'll need guidance to prepare and file your taxes, especially if you find tax laws and IRS regulations to be overwhelming or hard to understand.

   Getting your taxes wrong can lead to various penalties, including fines and jail time. That's why we recommend that you choose tax experts who have years of experience guiding expats to file taxes and avoid liabilities. Also, these experts can guide you on how to file taxes online safely without compromising your data.