Tax season doesn’t have to be financially depleting, but it may be unpleasant for many people and businesses. One way to ease the burden and save money during tax season is by taking advantage of discounts on tax preparation software. These savings can considerably decrease the cost of tax software, making it a desirable choice for filers.
Tax preparation software can be downloaded for free or cost several hundred dollars for complex returns and more in-depth services.
Look for software that prioritizes accuracy by providing robust deduction optimization tools. These tools identify missed income deductions and credits, helping maximize your refund or minimize your tax liability.
Know Your Tax Bracket
Nobody looks forward to tax season, but top-rated software can make it less painful. With some research, you can find software to fit your specific needs that will save you time and money.
The first step is to determine your tax bracket. Tax brackets are a percentage of your federal income tax rate that varies by filing status and income. For example, a single person may pay 10% of their taxable income in the lowest bracket, while a married couple paying taxes might pay 22% in the highest bracket.
Once you know your bracket, you can choose the best software to suit your needs. Most programs start with basic questions and then ask you to provide documents and receipts in a particular order. Some programs will even scan your documents and input the information for you.
Most tax software companies offer live chat or phone support if you have questions. Some will also send a professional to your home or business for one-on-one assistance. However, remember that these services can add up, so check the pricing plans on the software company’s website. Some programs have a minimum charge, while others have a maximum refund guarantee.
There are various sources of discounts for TurboTax. Look for reputable websites, financial forums, or official websites of tax software providers that offer valid promo codes and discounts. It’s essential to use codes from trusted sources to avoid scams.
Use a Credit Card
If you have a credit card, the IRS allows you to use it for payment directly on its website. This can help you avoid the extra fees and processing charges associated with paying taxes online through third-party services. Plus, you can earn rewards you wouldn’t otherwise get from the purchase. Some tax software companies even run promotions to earn bonus miles for paying with their services.
However, the fee of putting your tax bill on a card can outweigh the value of the rewards you might earn. Plus, carrying a balance can hurt your credit score and decrease your ability to take out loans or get the best interest rates on cars, homes, and even utilities.
Using a credit card can make sense if you plan to pay off the balance in full within the 21-day grace period or sooner. And you can find a credit card with an introductory 0% interest offer to reduce the impact on your wallet in the long term.
The key is to calculate how long it will take you to pay off your balance and be sure that the 0% APR carries over from year to year. Consider other fees associated with paying taxes on a credit card, such as the payment processor fee and the card’s rewards rate (if any). To offset those costs, you must ensure you have a high enough rewards rate or welcome bonus and a low annual fee, or else it could cost more than you save.
Know Your Software Options
Tax software guides you through the filing process step-by-step, like the turn-by-turn directions on a GPS. It starts by asking questions about the taxpayer, such as their name, Social Security number, and date of birth. Once the data is entered, the software can calculate how much the client owes or will receive in a refund.
If you run into trouble or need help with a specific question, most software programs offer a searchable FAQ or knowledge base to answer your questions. If you need more hands-on assistance, most also provide a chat or telephone option to speak with a tax expert. However, these options can come with an additional fee, so check the pricing plans before using them.
The best tax preparation software also offers error-checking features that ensure data accuracy, as well as a ‘what if’ scenario option that can be used to see what changes would improve the overall outcome of a return. Additionally, a program that includes visual aids and definitions for complex terms is helpful to those who may not be as familiar with tax terminology.
Finally, it’s essential to select a program that’s reliable and secure. A quality product will incorporate robust data safeguards requiring multi-factor authentication to access the system. This helps to ensure the safety of sensitive information and prevents identity theft.