|
TAX TIP No. 10
Getting the most from tax software
Got about 14 hours to work on your tax return? That's what the Internal Revenue Service estimates it will take the average taxpayer to complete Form 1040.
Sure, that includes the time it takes to pull together records, learn about the form, decipher tax laws, copy the return and send it in. But even discounting these ancillary duties, the agency figures it still will take about three hours just to complete its most popular income tax form.  Watch: "Paying with plastic"
Of course, the IRS came up with that time estimate before
Congress complicated things by waiting until
the end of December to make tax
law changes that will make completion of
the forms a bit more difficult, and slower,
for millions of filers. And if you have additional
schedules or tax credits to file, you might
be measuring your tax time by the calendar instead
of the clock.
Don't want to spend that much
time with your 1040? Then tax-preparation software
may be the answer. These packages promise to
save you time and money by putting tax law and
the forms you need at your fingertips. And some
tax-prep devotees contend they can even save
your sanity during tax season.
If you decide this year to join the millions who do taxes on a PC instead of paper, here are some ways to make the process go more smoothly.
Determine your needs
Not too long ago, there were only a few choices
when it came to doing your taxes by computer.
But nowadays, a new tax-prep package seems to
appear daily between Jan. 1 and the filing deadline.
That means you must do some homework before
you pick a program.
First, evaluate your personal situation. Are your taxes relatively simple or do you have a lot of considerations, such as a freelance job on the side, that could add to or cut your tax bill and filing requirements? Not exactly sure? Then look for a program with lots of explanations that walk you through the process step by step.
If, however, you're an old hand at tax filing but want the software calculators that double-check your math, look for a package that lets you easily skip over sections.
And don't forget the technical requirements. Make sure your computer can handle the software: that it has enough memory, the proper operating system, etc. Nothing's more frustrating than getting a product home and finding out you can't use it.
Comparison shop
Once you've decided what you need from a tax-prep package, shop around. Don't waste any potential tax savings by overpaying upfront. Look not only at the software's base price, but also at any costs for options and upgrades.
Do you have state forms to file? Are they included in the package or do they cost extra? Will the product let you complete more than one return, say the joint one you file with your wife and your son's 1040EZ? Does it support electronic filing? If so, is it free or is there a fee? Watch "Free tax help"
Be sure that as you evaluate the costs of different packages, you examine comparable options.
Start at the beginning
You've loaded the perfect program onto your PC and are ready to knock out that pesky return. Stop! Read the introduction.
| -- Updated: Jan. 15, 2008 |
|
