Tax Software for 2016: 10 things to Consider to Find the Program That’s Right for You?
BY STEVE NUBIE
Tax time is always an intimidating time. But there are software programs that can relieve the pain and save you time and money.
When it comes to taxes there are three fundamental approaches:
- Roll up your sleeves and wade through the IRS forms and schedules and do it yourself with pen and pencil in hand.
- Hire an accountant or tax service to do it for you.
- Use tax software to finish and file your returns.
The decision is up to you. If you’re filing a simple return like a 1040EZ or 1040A you could do the paperwork but even then there are online software solutions that also happen to be free. If you’re situation is a bit more complicated you may dread the exasperation of ever-changing tax laws and forms, or tire of paying an accountant half of your refund.
The Tax Software solutions
If you’ve never used tax software before you might want to give it a try. Even if you work with an accountant or tax service it will help you get organized and give you a read on your tax situation. Better yet, you may find it actually has allowed you to do your taxes with a strong amount of reassurance that your taxes have been properly prepared. Here’s why:
- Popular tax software programs don’t expect you to fill out forms and schedules. They ask you a series of questions and the forms are filled out in the background by the program. Some answers could lead to additional questions to determine if other forms or schedules need to be figured out.
- Your Federal tax information will also be transferred to your state return automatically. The state portion will still ask you some questions but you don’t have to take a deep breath and start-over for most of your state tax information.
- Your previous year returns info can be entered to make a new filing easier. Some programs allow you to even transfer info from a competitive program. This also a makes things a bit easier.
- The questioning format of the interview asks you additional questions if a certain situation becomes apparent. This will help you find the best and most deductions and caution you if your information or support is lacking.
- Many tax software programs have a dashboard. This appears at the top of your screen and gives you a running scorecard on how much your refund or payment will be as you go through the process. It’s fun to watch. Or it can be painful.
- There are installed tax apps and online tax apps. All will give you links to more information on a particular subject if you’re confused or in doubt. This would include links to IRS publications but if you’ve ever waded through one of those you’ll be happy you have the tax software to make it simpler to understand. They all do a good job of putting complex tax-code into plain English.
- You can run your own audit. The programs do a check on not only mistakes you may have made, but omitted information and audit risks. It’s nice to know before you file if you missed something or need to make sure you have the right receipts and substantiation for a deduction.
- You can file online or via mail from all programs. Most online-filing with these programs is free. Some states require an additional fee for online filing, but that varies by state. Online filing can get you a refund into your bank account in weeks, while mailing can take months. Both downloaded and online programs offer this feature.
- Print out a full record. You can print out a full record of your forms and schedules plus worksheets to support your claims. This gives you an easy-to-store paper record of your taxes for any given year.
- Audit risk protection. Some programs like TurbotTax offer “Audit Risk Protection.” For an additional fee, they will represent and advise you on how to handle an audit. This assumes your information and substantiation is valid and verifiable, but they can help you manage the intimidating heat of an audit.
The Big question….
How much of any of this do you need? If you have a fairly simple tax situation you might want to pursue an online option like Credit Karma or the basic TurboTax Online solution. These are best used for people filing for a 1040EZ or 1040A.
But there’s a catch
There are a couple of things about filing with online solutions. One is security. How do I know my tax info is secured? The second is related to hidden costs. With many online services the desire to itemize or use more complicated forms will result in a request for a payment. It’s very frustrating to fill out a significant amount of information with the assumption it’s free and find out that one line item will cost you more with an added fee from the “free” tax service. Read the fine print.
Prices also vary for each individual app depending on where you by them. Retailers tend to charge the most while online resources tend to offer better discounts. Shop around on the Internet and see if a local retailer has a deal on the program you want.
A snapshot of what’s out there:
This chart was based on a review in PC Magazine and comments from customers on Amazon.com. Give it a quick look and then we’ll give you links to Amazon.com where you can read and peruse reviews from users and make your best decisions if you decide to go the Tax Software rout
|NAME||TaxAct Online Premium||Intuit TurboTax
|Credit Karma Tax||TaxSlayer
|H&R Block Premium||Jackson Hewitt Online Premum|
|4 Stars||4.5 Stars||3 Stars||3 Stars||3.5 Stars||2.5 Stars|
|IMPORTS COMPETITOR PREVIOUS YEAR RETURN||YES||YES||NO||YES||YES||YES|
|ALL MAJOR IRS FORM AND SCHEDULES||YES||YES||YES||YES||YES||YES|
|GUIDANCE FOR COMPLEX TOPICS||YES||YES||YES||YES||YES||YES|
|LIFE EVENTS GUIDANCE||YES||YES||NO||YES||YES||NO|
|1040 SMARTPHONE APP||YES||YES||NO||NO||NO||NO|
|CONTEXT SENSITIVE HELP||YES||YES||YES||YES||YES||YES|
The telegram is simple
What do you need and what are you worried about? There’s more information about many Tax Software programs on Amazon.com. This will give you an opportunity to browse, read about features and most importantly reviews from users. You may also see some better prices that you would find from retailers.
The best-case scenario is you successfully do your taxes with relative confidence. If you are not sure, this gives you a good way to sit with a tax professional or accountant and deliver them a coherent snapshot of your taxes rather than dumping a cardboard box of receipts and statements on their desk. That costs more and any investment in tax software can make it easier for anybody.
And don’t forget. Any costs you incur to buy this tax software is tax deductible. They’ll remind you of that in the interview.