How to Use Income Tax Software

Income tax software has revolutionized the way we prepare our taxes. Gone are the days of calculators and adding machines. Now your computer does the math. Using income tax software also reduces the stress involved in doing your taxes, lowers the possibility for error, allows for quicker completion and promises a faster return if you file electronically. Read on to learn how to use income tax software.

Difficulty: Easy

Instructions

1. Install your income tax software on your computer after you have verified its compatibility with your operating system. Also be sure you have adequate memory and storage space.

2. Make use of the tutorial that comes with the software. It gives an overview of the program and walks you through its various features.

3. Prepare your return the same way you would if filing a paper return. Double check your calculations to ensure your return is error-free. Using the income tax software, input your data.

4. Use the information form to enter the details of your W2. If you have multiple forms click "Save" and follow the prompts. Be sure to click "Clear All Fields" before inputting new information. Entries can be corrected by going to "Forms Entered" and selecting "Edit." Repeat this process for 1099 forms.

5. Mark the appropriate box if you would like your refund directly deposited into your bank account.

6. Take part in the IRS efile program by completing Form 8633. Download the program by visiting the IRS website.

7. Check to see if the income tax software you are using charges a fee to file your return electronically. In some cases the fee can be deducted from your return.

8. Call the refund hot line [phone] to find out the status of your refund. Allow three weeks for processing before inquiring.

9. Check that technical support is available either via a toll-free number or online.

Tips & Warnings

• Be sure the program includes federal and state forms.
• Federal and state returns can be filed in a single submission in 37 states and the District of Columbia. Check to see if your state is one.
• Updates should be provided free-of-charge to users.
• The IRS, in conjunction with various tax-software companies, offers free online federal tax preparation and e-filing for those with qualifying incomes. The service is available only through the IRS website.
• American Association of Retired Persons (AARP) offers "Tax-Aide" from February 1 to April 15 in most cities. Volunteers prepare tax returns for certain taxpayers at no charge. Search the AARP website for more information.
• Determine if the income tax software you are using charges a fee to file your return electronically. In some cases the fee can be deducted from your return, or might qualify as an income tax deduction on next year's taxes.
• Find out if the manufacturer guarantees the product's accuracy and if they provide access to a tax professional in case of an audit.

Resources

• American Association of Retired Persons Website for Free Tax Information
• IRS for Information About Tax Preparation