Tax software programs are for taxpayers who want to do their own taxes but need guidance. Most programs are plug-and-play. You provide the information it asks for and the software does the rest. The reputable programs also come with a guarantee that their calculations, forms, and guidance are all up-to-date.
Anyone can benefit from a tax software program. If you don’t want to pay the high prices professional tax preparers charge, tax software is the next best thing. Many taxpayers save hundreds of dollars by using tax software versus a professional tax preparer.
The prices vary by brand and program within each brand. Most of the top-named tax preparation software programs offer a basic free version for anyone with ‘simple’ taxes and then offer variations of the program for costs of $34.95 – $200, plus state tax filing for $30 – $50.
All free tax software programs have your back with their guarantee and make filing taxes simple. TurboTax, FreeTaxUSA, and TaxSlayer all offer top-notch free tax software options.
Yes TurboTax and other tax software programs offer a free version. You must only file a 1040, take the standard deduction, and have only W-2 income, although unemployment income is okay too.
No, most free tax software programs only work if you take the standard deduction. In 2021, the standard tax deduction is $12,550 for a single person and $25,100 for married filing jointly couples.
All tax software programs use the same calculations and all have to allow the IRS law. While TurboTax is touted as the program that finds the most deductions, you’re safe with just about any of the top software programs available today. Make sure you input all your information correctly and answer every question asked to ensure you get all deductions possible.
Your tax refund depends on the amount of taxes you have withheld from your paycheck or that you pay quarterly if you’re self-employed. The tax software program compares the amount of taxes you’ve paid to the IRS throughout the year to your bottom line tax liability. If you overpaid, you’ll get a refund and if you underpaid, you’ll owe the difference at tax time.
Maximizing your tax refund takes careful planning throughout the year. Look at your filing status and the number of exemptions you take. If you want more taxes taken out of your paycheck, increase your exemption size.
Take all tax deductions available to you. The right tax software program will walk you through each deduction, asking important questions so you can take advantage of every deduction possible. Also, maximizing your retirement account contributions and using tax-loss harvesting when selling taxable investments can help you get the largest refund possible.
If you claim ‘0’, you’ll withhold the maximum amount of taxes each pay period. If you claim ‘1’, you’ll withhold less each pay period. Depending on your deductions and write-offs, you may end up owing money if you claim anything higher than ‘0’ but most people take the chance and use tax software programs to maximize their deductions.
Yes, if you want to do your own taxes, tax software programs are the way to go. The big names like TurboTax, TaxSlayer, and TaxAct all make it easy to walk through the interviews and calculations to make you feel like a tax pro.