How to Choose The Best Tax Software
Online tax return forms are about to fully replace printable forms in the near future. However, filling them out remains a stressful activity for every U.S. citizen. Fortunately, software developers know about this problem and provide both free and paid headache-killing solutions for filling out tax returns. But what is the best piece of software for your particular purposes? Using this guide, you will figure out how to find the best way to fill your tax returns.
1. Free Options
First of all, let’s figure out if you can file your forms at no cost. The majority of large software developers provide free versions of their tax-filing apps. However, their features are usually limited for filling out Form 1040EZ or a 1040A. If your particular case is basic and doesn’t require any complex operations, free versions of popular software will help you out and save you tons of time and money.
Another way to figure out what free options are available for you: you can see if you qualify for free filing via the IRS website. Browse for the IRS Free File Program. There you can get access to a wide range of software assistants. The entire search will take you a couple of minutes. Just answer a few questions on the official website and choose the best match from the list of automatically offered software. The only catch is that your gross income must be below $64,000. Otherwise, the system won’t let you access free guidance.
2. Paid Options
In case your tax return requires more than average efforts, free options may not work it out. If your situation requires dealing with multiple deductions and credits, you are a landlord, a large investor, a freelancer, or else, it’s better to look for paid software from the start.
Paid software by large tax software developers usually comes in 3 or more different packages, such as Standard, Advanced, and Premium. Standard versions are mostly designed for simple return versions. Advanced packages are ideal for dealing with average credits and deductions. Finally, Premiums provide the fullest functionary, which is excellent for independent contractors, self-employed citizens, investors with above-average dividends, and landlords.
3. Where to Store Your Returns
Tax software always comes either as a desktop app for Mac or P.C. or as an online cloud-based app for web browsers. The second option is much more convenient as it lets you access your documents from any computer or mobile device anywhere you go. Desktop versions usually store your data on your computer, making access from other platforms impossible. It’s hard to say which storage is safer because we haven’t heard of any data breaches amongst tax software providers. Choose the one you like the most and enjoy.
4. Average Costs
The total cost of your paid tax software depends on 3 major factors, such as:
- The price of preparation and filing of a federal return;
- The price of preparation and filing of a state return;
- The price of the digital filing of both returns.
The actual price tag for each operation depends on the developer and the version you choose. However, the average costs for bundles fluctuate from $40 to $50. The price for a top tier rarely gets higher than $100. Some developers may also offer you to pay with the money from your tax refund. We don’t recommend you do that unless you don’t mind paying an extra $35-$40 for such a favor.
5. Other Things to Look For
You should understand that tax software updates every year to meet the changing requirements of the IRS and to make your life notably easier after purchasing their products. For this reason, you should always look for the most advanced option available on the market as it may help you to reduce the average filling out time.
Here is a comprehensive checklist of features that you should look for while making a choice:
- Accuracy guarantee – it’s important to get the software that guarantees reimbursement in case the built-in calculator makes a mistake that costs you money.
- Tax calculator & refund estimator – these features will help you to figure out your tax liability.
- Straightforwardness – try a free version to see if it’s clear enough for you.
- Automatic data import – many new programs support automatic data import and simple scanning options.
6. Is it Possible to Get a Refund Faster?
The fastest way to get a refund is to file all your IRS forms online and provide your bank account for direct payouts. Some providers may also offer you to put your refund on a debit card or invest them into U.S. Savings Bonds.
Knowledge is Power
Now that you know all the aspects of choosing the right tax filing software, you can start saving your time and money right away. However, don’t stop looking for new opportunities to deal with your forms faster. Fortunately, developers are very generous for new features. Are you already using any tax software? Tell about your experience in the comments and share the article with your friends to help them out with filing IRS forms.