If tax season sends shivers down your spine, or you feel out of your depth when it comes to income tax, investing in a tax software program could be a game-changer. Not only will it streamline the procedure, but it can also help you maximize your refund.
Mastering Your Taxes: A Comprehensive Guide to Choosing the Right Tax Software Program
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Tax software shines for those with uncomplicated tax situations. As per a survey by the National Society of Accountants, the average cost of having a professional do your taxes is a whopping $176, and it can escalate to as high as $1,563. On the contrary, most tax software lets you file for free, and intricate returns can be managed for a minimal cost of around $46.
The icing on the cake is that many tax software solutions promise maximum refunds. If they fall short on this promise, they compensate customers for any losses stemming from errors. Depending on your income or business type, different tax software emphasizes varying aspects of expenditures.
Each of the software solutions we’ve examined below boasts features like retirement plan income, child tax credit, child care expenses, social security income, student loan interest, and more.
Choosing the Right Tax Software
Most of our top tax software picks offer robust customer support through online chat or phone. With a range of pricing plans available, choose the tax software program that best suits your personal or business needs. After comprehensive market research, we’ve pinpointed these six as the best tax software solutions of 2021:
- TurboTax: Best Overall
- H&R Block: Close Runner-Up, Best Overall
- TaxSlayer: Best Bang for Your Buck
- Credit Karma: Best Free Option
- Jackson Hewitt: Best Customer Support
- TaxAct: Best Accuracy Guarantee
Understanding Income Tax Software Programs
Filing income tax returns has never been more comfortable thanks to tax software programs that automate every facet of preparing and filing your tax returns. These applications provide a user-friendly interface that guides you through the form-filling process step by step. They assist you in identifying deductions, recording your income, and then e-filing it for a nominal fee.
First-time users might encounter limitations while using tax software programs. If you find yourself at a roadblock, customer service support is readily available to help overcome any hitches.
Various software solutions offer proactive support to ensure correct tax return filing. Tech providers even offer refund guarantees and accuracy assurances to compensate customers for any potential loss.
For instance, TurboTax, an American tax preparation software package initially developed by Chipsoft, now belongs to Intuit since the company’s acquisition and subsequent renaming to Intuit Consumer Tax Group.
Why You Should Consider A Tax Software Program
If you don’t fancy hiring a professional to prepare your tax return, tax software programs can save you both money and hassle. The software’s benefits can be summarized in two main points:
They ensure every expense is identified, recorded, and filed correctly.
They maximize returns. Tax laws frequently change, making it difficult for individuals or businesses to track all potential deductions. However, with regular software updates, users are kept in the loop about new opportunities that can get more money back in their pockets.
How Much Does Tax Software Cost?
Many tax software programs on the market allow users to file straightforward tax returns for free. For complex returns, premium plans inclusive of live support and consultations can be purchased.
Paid plans typically start from $44.95 (plus $34.95 per state) and can go up to $200 (plus $55 per state). Most providers only charge users when it’s time to file the return, letting them work on it at leisure.
Tax Software Vs. Accounting Software: Understanding the Difference
Often, people mix up tax software with accounting software, but they are different. Accounting software tracks all expenses and incomes throughout the year, providing a detailed financial statement breakdown that businesses can use to minimize their taxes and streamline tax filing. In simple terms, tax software kicks into gear where accounting software signs off.
Tips For Choosing The Best Tax Software Program
Choosing the right tax software program depends on your unique needs. Reliable choices like TurboTax and H&R Block are worth considering, particularly if you’re not at ease with doing your taxes. TurboTax, for instance, is user-friendly and guides you through the tax return filing process step by step.
When evaluating different software programs, make sure they are user-friendly, as most people don’t have prior experience with such software. Solid online support is crucial, making providers that offer live chat or phone support preferable.
Price is another critical factor, especially given the inherent risks of filing returns by oneself. Therefore, the software cost must be lower than hiring a professional.
Lastly, look for tax software that offers accuracy and a maximum return guarantee. While no mechanism can replace human tax professionals and accountants, providers who compensate for filing errors bring extra peace of mind.
