As we approach the end of the year, it’s time to think about taxes. You don’t want to wait until April 10th to start getting your tax documents together.
You need to start planning and gathering your paperwork now. That will help you be ready to start taxes and take the stress out of the process.
That includes evaluating income tax software. With the right software, you can make filing your taxes painless. Well, almost painless. You still have to pay taxes.
Keep reading to find out what income tax software you should consider this tax season.
TurboTax
This has long been the industry leader in income tax software. You’ll get plenty of prompts and opportunities to make deductions and lower your tax bill.
For $79, you can file state and federal taxes. You can lower that if you get your act together and do your taxes in early January.
TaxAct
TaxAct is a great value for tax filers. You can file state and federal taxes for $35.
This is perfect if you have a straightforward return. It can also work with investment income and self-employment income and expenses, too.
TaxSlayer
Are you the type of person to geek out over taxes? This is a great option. This was developed years ago for tax professionals, and it shows.
There are several types of price points for this software. It’s free for 1040-EZ filers, self-employed people. If you have complex returns, you get support.
What Documents Do You Need for Income Taxes?
Your software can make the tax filing process easy, but a tool is only as efficient as the person using it. If you don’t have your documents together, you’re going to have a hard time filing taxes.
You’ll need to have all of your income statements. If you did freelance work or you’re self-employed, you’ll need to document your expenses, too. Gather your receipts.
For your income statements, you’ll get a W2 form from your employer. If you didn’t get a W2 form from your employer, use your last paystub for the year and create a printable W2 form.
You’ll get other forms, such as 1099-MISC or 1099-INT if you earned other forms of income or interest income.
There are other forms that will be sent to you in some situations. For those who made student loan payments, you’ll get Form 1098-E, which will show how much student loan interest you paid. If you had health insurance through the health insurance exchange, you’ll get Form 1095-A.
All of these forms are necessary to do your taxes. If you know you should get them and don’t receive them by the end of January, then contact those organizations.
Income Tax Software Simplifies Taxes
There’s nothing worse than trying to do your taxes by hand. Fortunately, income tax software makes it easy. These programs come with wizards that will ask you questions such as if you had retirement income.
They’ll then determine how much you owe or should get back from the IRS. Of course, you want to be organized before you sit down at the computer to do your taxes.
