Should I use a US tax self-prep software for my taxes?

Tax season can be stressful, but with the right tools, reporting your taxes to the IRS can be a lot easier.

One of the best ways for you to simplify the process is by using tax self-preparation software. This type of software is designed to guide you through each step of filing your taxes, making the process smoother, faster, and more cost-effective than hiring a tax professional.

What is a tax self-prep software?

A US tax self-prep software is an online tool created to assist individuals in preparing and filing their tax returns. These programs guide users through the process by asking about their income, deductions, and credits and automatically completing the required tax forms.

What is the benefit of using a US tax self-prep software?

Here are the reasons why many US citizens choose to use a US tax self-prep software:

Cost-effective solution: It is usually more affordable than hiring an accountant. Many offer free versions for simple returns, and even for more complex filings, the cost is often much lower than professional fees.
Ease of use: It is designed to be user-friendly, even for people with no financial knowledge. It guides you step-by-step, helping you enter information and find deductions and credits.
Time-saving features: It can save you time by importing forms like your W-2 and last year’s return. It also does calculations for you, reducing the chance of mistakes.
Access to online help & support: Many tax software options include built-in help features like real-time support from tax experts, FAQs, and guides. This way, you get help if you face a tricky tax issue.

What should I look for in a tax self-prep software?

Here are some essential features you can opt for in a US tax self-prep software:

Tax form coverage: Make sure the tax software you choose supports all the IRS Tax forms you need. Most cover basics like Form 1040, W-2, and 1099s. If you’re self-employed or have rental income, look for software that includes Schedule C and Schedule E.
Deductions and credits maximization: A major advantage of tax software is its ability to find deductions and credits you might miss. It can help you claim the child tax credit, education credits, and student loan interest deductions, ensuring you get the most out of your return.
Importing data: Some software allows you to automatically import key tax documents, such as W-2s, 1099s, and even last year’s tax returns, saving you time on manual data entry.
Audit support: Other tax software offers audit support, including guidance if you are audited and, in some cases, full audit defense services.
E-filing and refund options: The convenience of e-filing can’t be overstated. Ensure the software supports e-filing and check if it offers options like direct deposit for quick refunds or the ability to pay taxes due directly from your bank account.
Mobile access: in today’s world, mobile access is essential. Many tax software platforms offer mobile apps or mobile-friendly websites, allowing you to file your taxes on the go.

How do I get started with a self-prep tax software?

Here is a step-by-step guide to get started with a US self-prep tax software:

Gather documentation: Ensure all the necessary documents, including W-2s, 1099s, receipts for deductions, and last year’s tax return, are there for your reference.
Choose your software: Based on the complexity of your taxes and the level of support you want, choose the software that best suits your needs.
Follow the instructions: The software includes a step-by-step guide. Most platforms will prompt you for the information you need and handle the calculations automatically.
Double-check information: Check to see if you’ve inputted incorrect amounts and maximize the software’s built-in error checker. Many platforms will flag common mistakes and help you correct them before filing.
File your return: You can now electronically file your return and choose whether to get your refund via direct deposit or apply it to next year’s taxes.

How long does it take to get my refund after e-filing?

Typically, the IRS processes refunds within 21 days of accepting your return if you choose direct deposit. However, certain factors, such as errors on your return or additional reviews, can delay the process.

Is it safe to use a tax software?

Yes, security is crucial in handling sensitive financial data. Check to see if your chosen software provides high security in your details.

Here are the things to consider when choosing a secure US self-prep tax software:

Data encryption: Ensure the software uses encryption to protect your personal and financial information.
Secure storage: Many platforms offer safe storage of your past returns for easy access, but ensure that storage is protected and encrypted.
Identity verification and fraud prevention: Some tax software includes tools to help prevent identity theft, such as identity verification and two-factor authentication.