What Is TXF?
"TXF" stands for "tax exchange format," a file extension for data files that contain tax-related information. Most income tax preparation software will import this type of file, as do accounting software, spreadsheet programs, and accounting programs.
TXF files have the .txf file name extension and are intended for import by tax preparation software.
What Is TXF?
Exporting TXF data from your financial software then importing it into your tax software saves time that you would otherwise have to spend entering data into the tax software to prepare your income tax return. The TXF file extension has also been used for compressed archive files, which combine multiple files into one that can be compressed.
- Alternate name: Tax exchange format
How to Open TXF Files
Windows is designed to recognize and adapt to the three-letter extension following a file name. It will automatically use the proper installed program to open the file. Windows will typically prompt you to download a program that does recognize the extension if it can't identify one that's already installed.
Do a search in your software "help" documentation if you don't use Windows or if, for some reason, Windows doesn't prompt you to download a workable file.
But most Windows personal finance software programs export TXF data, as do some Mac personal finance software programs. You can usually click on "File" then "Export" to export tax information to create a TXF data file from your financial software.
Another, far simpler option is to double-click on the file and let the associated program take it from there.
It's essential that you properly categorize tax-related expenses throughout the year if you're going to use your personal finance software to create a TXF file.
Types of Tax Software
TXF is an accepted standard for saving tax data in Quicken, Intuit, and Microsoft Money. Virtually all reputable tax software, including Turbo Tax from Intuit, will generate and accept files with this file name extension.
Tax software comes with accuracy guarantees, and most programs offer a highest tax refund guarantee, as well as a state tax return. The state return usually comes at an additional cost, however.
U.S. service members should look over the free tax software for military members.
Free tax software is typically only an option that's offered to new customers or to those with low incomes or particularly uncomplicated tax situations. You'll probably have to pay for the software if you used a free version last year and you want to use the same program this year, or you'll have to choose another free tax program to use this year to avoid charges.
The same applies if your tax situation has grown more complicated or your income has markedly increased.
Tips for Choosing Accounting Software
You'll likely be using accounting software if you're a small business owner and you're keeping tabs on more than just your own income. This type of software saves hours of time compared to handling the books manually, and it's usually more efficient than using a spreadsheet. TXF is the accepted standard for these programs as well.
Accounting software reduces or even eliminates redundant data entry, like entering the customer's address on the quote, then the work order, then the invoice. The information can be readily transferred between programs that recognize the TXF file extension.
You might not even need accounting software if you're a sole proprietor with no employees, low or no inventory, and just a handful of customers, Otherwise, there are always free or low-priced accounting software options available.
Small business owners who carry inventory, or those who have more customers or employees, will save time and produce more accurate records using accounting software.
Narrow down your accounting software choices by making a list of the small business accounting features that you need to run your business. Most small business accounting software features include:
- Inventory management
- Sales tracking
- Management of customer contacts or that will work with your current contact management software
- Merchant account support to accept credit card payments
- Budgeting
- Estimates
- Payroll
- Business tax reporting
Key Takeaways
- TXF is a file extension that appears as .txf after a file name. It tells your computer what kind of file it’s accepting and what program to use to open it.
- The .txf file extension is the accepted extension for most reputable tax preparation software.
- Accounting software also recognizes TXF extensions.
- You might need accounting software in addition to tax preparation software if you’re running a small business.
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