Choosing the Right Tax Preparation Software for You

How to Select the Ideal Tax Filing Software

The April 15th tax deadline was extended this year to April 18th, providing some additional breathing room. Filing federal and state taxes involves complex calculations based on your earnings, filing status, and location, making the process challenging. Hiring a professional accountant can ease this burden, but for budget-conscious individuals, tax software offers an easy and efficient online solution for submitting your tax forms like 1040EZ, 1040A, and state returns.

The best tax software not only guides you through the process but also educates, boosting confidence and reducing audit fears. Based on user reviews, we highlight top options that handle tax filing accurately, offer multiple disbursement methods, and include deduction discovery tools, making tax season smoother for users. Some software packages are free for simple returns or for those with limited income, while others provide comprehensive features for complex tax situations, including advanced calculators and deduction assistance.

To select the software that fits your needs, consider these key factors:

Your employment type: Whether you're a full-time employee, freelancer, business owner, or self-employed, your tax requirements differ. Choose software tailored to your specific situation.

Appropriate software version: Leading tax software providers typically offer four tiers. The free federal edition supports basic federal and state filing. The basic version adds more deduction tools. The deluxe and premium versions unlock detailed deduction searches, industry-specific guidance, rental property deductions, and more advanced features for complex filings.

Available deductions: Standard deductions vary by filing status—$12,600 for married filing jointly, $9,300 for heads of household, $6,300 for singles. Additional deductions include donations, business expenses, rental properties, and depreciation, which software can help identify and maximize.

In choosing software, look for these essential features:

Accuracy guarantee: The software should correctly calculate your taxes and, if errors lead to penalties, provide compensation.

Audit risk alerts: It must flag potential audit triggers, such as unreported income or foreign account irregularities.

Refund disbursement flexibility: Options like direct deposit, checks, prepaid cards, or bonds should be available to receive refunds conveniently.

Reliable customer support: Access to live chat, email, or phone support, with knowledgeable representatives, is crucial for resolving issues promptly.

Data portability and import features: Upload W-2s via photo or file, and import previous year’s data automatically to streamline filing.

Device compatibility: Ensure the software works seamlessly on desktops, smartphones, and tablets for convenience.

Educational resources: Comprehensive guides, FAQs, and tutorials should be readily available to enhance your tax knowledge.