How to Compare Income Tax Software

If you avoid doing your filing your own taxes because it seems so confusing and complicated, you might consider using income tax software. Income tax software helps you complete your taxes by asking you questions and prompting you for the necessary information. Once it has all the information, it makes all the calculations. Quality income tax software can help you complete your taxes quickly and easily. It can also help you file electronically, so you receive your refund quicker.

Instructions

1. Match your situation to the tax software. For instance, some tax software provides basic income tax services for people who require a 1040-EZ, 1040a or 1040 tax form. Other tax software packages for reporting investments. Some tax software is available as a business package for people who need to report income and expenses from a home business or small business.

2. Compare import versatility. Versatile tax software can import information from a wide range of programs. If you use accounting software, you may want a tax program that accommodates bookkeeping formats from your software, such as Excel, PeachTree, Quick Books, Bookkeeper. If you used a tax software package before and a considering switching to a different one, you may want a program that ise able to import previous year tax files from competing tax software programs.

3. Compare features. Tax software programs offer many features like e-filing, guaranteed calculation accuracy, error checking and online help. Look for one that offers a free online trial, so you can decide if you like the layout and the tax questioning process.

4. Look for online filing capability. Filing online saves time and helps you get your refund quicker. Filing online also helps the environment because it does not require paper.

5. Read Independent Professional Reviews. Visit sites like Tax Software Review Top Ten Review.com or Cnet.com to read reviews of current tax software programs. Make sure you read the benefits and limitations of each program.

6. Determine if the Internal Revenue Service (IRS) recommends the software. The IRS maintains a database of approved online tax software programs. These programs vary in price and complexity, but they all meet the minimum IRS standards.

7. Compare prices. Online tax software programs range in price from free to $100. Boxed software from retail stores costs $19 to $100. Some software programs offer audit protection. If you buy a home-business or premier tax software program, audit protection costs nothing. If you buy it in addition to your basic tax software program, it costs $50 to $100.

8. Review the guarantees. Quality tax software programs provide an error-free guarantee. If you end up owing due to an error on their part, they pick up the extra IRS fees. Look for a money-back guarantee that covers your purchase if you simply don't like the tax software.

9. Consider a tax package that includes filing state income tax forms.

References

• All Business: "Tax Software Buyers' Guide;" Stearman, Sam W.
• Notebook Review: Tax Preparation Software: A Buyer's Guide
• Taxwise: Software Features
• Cnet: Tax Application Reviews

Resources

• File Online