The month of April brings more than showers as tax season comes to a close. To add to the stress of filing taxes, there is the confusion of choosing an appropriate tax software. Not every version of tax software is created equal; deluxe versions may or may not be comparable to alternative deluxe versions. So, what type of tax software do you buy? Which version will be the easiest, most efficient and cost-effective? Consider these 3 tips when choosing an appropriate tax software:
1) Which version of the software do you need? --
Once upon a time, tax software was separated into basic, deluxe and premium versions, leading to much more confusion than was truly necessary. Tax preparation is extremely important and companies are finding a much more popular response coming from only the highest versions of tax software being sold. These premium versions of tax software includes all the preparation features that you need to file your own taxes; besides, buying the highest version of anything may cost more, but will save time and energy in the long run.
Whereas the standard software is fine for those who do not need to itemize deductions, the deluxe and premium editions will be a better preparation for tax day. Deluxe and premium software will itemize deductions from mortgages and donations, and provide better documentation on help topics. The Premium software presses the envelope a bit further however, providing support for investments and small businesses.
2) Online versus desktop software --
You can install good tax software online and you can also purchase desktop tax software, each having its own pros and cons. It is important to tailor your tax preparation specifically to your needs. Which will work best for you? Overall, online tax software is easier; you don't have to deal with potential troubleshooting issues that come from desktop software. You can work on your taxes from anywhere, not just your desktop. You are not prompted to update software constantly because it is automatically updated online each year. Security is not much of an issue with either version, but is typically more secure online. The main pro for desktop versions is the data storage. Tax returns are saved until deleted, which can come in handy when needing to go back a couple of years for reference or comparison.
3) E-filing or mailing it in? --
Depending on the software, fees to file electronically may or may not be included. It is important to know what the charge is for electronic filing if you are planning to use it ahead of time. E-filing can be beneficial because it is quicker, more cost-efficient and convenient; it negates the issues that come along with printing out the return and mailing it in. However, e-filing may see you with extra costs for filing state federal tax returns. Always know what you are getting and what you are entitled to when purchasing tax software. E-filing is also a very safe procedure, as the information is encrypted when sent from computer to the IRS. There are plenty of reasons to chose e-filing over sending it in through the mail. Mail is slower and more unreliable; your information could be stolen or never arrive to its intended destination. There is no middle man, it goes straight to the IRS and there is no messing around with your personal tax information. In addition to the conveniences of filing your taxes electronically, you will know exactly when you will be receiving your refund. Either way, e-filing or mailing your return, a good tax software will help prepare you for the biggest day in April.About Author:The author is a contributor and specialist of small business resources and solutions on topics such as tax return software. Please visit www.tax-compare.com/tax-return-software-companies/turbotax/free-edition for info on Tax Software such as the TurboTax Free Edition.