The thought of a tax refund can certainly be exciting, but it also begs the question “Should I hire someone to help, or should I do it myself?” Not everyone can, or wants to, have an accountant file their returns. For those who prefer to do their own taxes, there is help.
The first step is pulling together your materials. People can save time by getting all the documents they require before starting their taxes. There are many records required for taxes, but several essential documents everyone will need are:
- A W-2 form, for employees and/or a 1099-MISC form for income;
- A 1095 form for health insurance coverage, and
- Proof of deductions and contributions.
The next step is determining which online tool to use. Today there are many free and paid tax software programs to simplify the process of preparing and filing a tax return. With so many tax software programs available, finding the right one becomes a challenge.
The following two tax preparation and filing software programs are considered among the best available and should fit the needs of most people. All taxpayers need to conduct a thorough tax review to determine their exact tax needs before purchasing any software.
TaxACT is available as a download or on CD. There are three versions of this software. The free version of TaxACT offers:
- A free Federal Return;
- IRS E-file;
- Import last year’s return;
- Simple and complicated returns;
- Free email tax help, and
- Loans and savings calculator.
In addition to the options included in the free version, the TaxAct Deluxe version adds:
- Quick W-2 import from some employers.
- Help with non-monetary donation values;
- Free tax assistance by phone, and
- Tax reports to help you save even more money.
The Ultimate version includes all of the above, plus a free State Return.
Turbo Tax offers more advanced options than TaxACT. It is a great choice for people who have a home business or make a substantial income from investments. Turbo Tax comes in four versions. The Federal Free edition lets the user:
- Prepare and e-file a Federal Return;
- Ask tax questions by live chat, and
- Import W-2 income.
In addition to above, Turbo Tax Deluxe users can:
- Import previous Turbo Tax returns;
- Ask tax questions over the phone;
- Include itemized deductions;
- File 1099-MISC income,
- File deductions using a Schedule A form.
Investors can choose to use the Premier edition. This edition adds the ability to:
- File income from stocks, bonds and mutual funds using a Schedule D form, and
- File income and deductions from rental property using a Schedule E form.
People with home and small businesses should choose the Home and Business edition. This version of the software makes it easy to:
- Report business expenses and income using a Schedule C form, and
- Get the highest business deductions and depreciation credits.
Determining which program best suits your needs and planning ahead assist in making tax time a little less hectic.
This blog post is the opinion of Belmont Savings Bank and is not to be taken as financial or investment advice. For personal financial or tax advice, please consult a financial or tax advisor. Belmont Savings Bank is not endorsing or recommending the use of any particular tax software programs.