A tax software takes away the manual rigors of filing your tax returns solo or spending much to have a professional run it for you. Also, tax software makes handling self-employment tax as a solopreneur pretty easy.
People struggle with filing tax returns for many reasons besides earning issues. Perhaps tax concepts are pretty tough to understand, and the complications associated with completing tax forms make tax software a handy tool for the average taxpayer.
As you continue to file your tax returns, you might notice that you are eligible for some tax refunds. While tax refunds are exciting to get, are there other ways of maximizing your tax refund?
This blog post is all about maximizing your tax refunds and the top-rated tax software to make it possible. So read on to learn more!
What is tax software?
Tax software is an electronic device or application that automatically helps taxpayers file their taxes. It assists you with preparing and tracking your tax liability to help you stay on top of things. You are less likely to make as many errors when preparing and filing your tax returns with tax software.
Essentially, tax software is both a tax guide, calculator, and organizer to eliminate the manual inconvenience of tax returns. The general effect of tax software is to gain DIY experience handling your taxes. However, you can also use them to boost your tax refund.
If you are supposed to get a tax refund and get none or get lower than you should, there could be a significant problem with your filing. Every tax process starts with the filing, calculation, and accurately completing the necessary forms.
For instance, if your boss erroneously fills your Form W-2 as an employee, you could be losing a lot after generating each paystub. Similarly, if you wrongly fill your 1099 as a self-employed individual, you could get very low tax refunds or none at all. Therefore, you should accurately complete your form W-4 and other IRS tax forms to create the basis for getting a tax refund.
How tax software works to maximize your tax refund
The basic design of tax software addresses the nuances associated with tax returns for taxpayers. This way, people don’t have to deal with the complexity of tax codes, their implication, and calculation.
Essentially, the tax software runs all income tax calculations for you, including completing the necessary tax authority forms. The software works in line with the IRS tax codes to analyze your financial information and give you the safest legal ways to lower your tax bills and get tax deductions—Maximum tax refunds!
The tax software will either employ the interview method or the form method to assist you with your tax returns. Here is how both ways work.
The interview method is like a question-and-answer process. However, this method does not require the taxpayer to know the different sections on a tax form. Instead, the system will ask you a series of questions that you should answer and automatically complete your forms and calculate your tax liability for you.
The form method
The form method duplicates or mimics various tax forms from tax authorities for you to fill out. By accurately completing the forms, you invariably complete the primary tax forms. This way, the government has your accurate information and can determine if you are eligible for a tax refund.
Now that you have a general knowledge of tax software and how it works, let’s look at three of the top-rated options to help you maximize your tax refund. First, it’s important to note that most tax software provides a free and paid user experience!
Review of the three top-rated tax software to maximize your tax refund
According to popular opinion, turbo tax is rated as the best tax software for most users. Although it is pretty more expensive than other options, it still offers a free version for simple taxes. Also, the question-and-answer user experience is pretty relatable and does not require much tax knowledge.
- Easy-to-use interview format
- Accurate and reliable calculations
- Free assistance with tax audit support
- Guarantees maximum refund
- Live on-demand expert tax advice
- More expensive than other options
- Expert tax advice attracts extra cost
H&R takes care of most taxpayer issues at competitive prices with other options available. They offer a satisfactory user experience while offering paid and free service versions. The free version only takes care of simple tax returns, and you can get expert professional assistance for an extra fee.
- It covers loads of tax forms and situations
- Web-based options if you dint want the app
- Maximum refunds, including your subscription plan fees
- Video chat with experts for help
- Industry competitive prices
- Relatively costly for most users
- High Per state filing cost
Even though filing costs per state differ, Tax slayer is still one of the most affordable options available. Also, they support a wide range of tax situations.
- Lower subscription price compared to other competitors
- Maximum refunds, including subscription fees
- A lower state filing cost
- Offers IRS inquiry and audit support
- Offers expert chat only on their premium plan
- Limited customer support services
Your claim to more tax refunds starts with doing a proper tax return. While there are other options for automatically preparing and calculating your taxes, we have only concentrated our review on the top three in the industry. Your choice on what tax software to use depends on how much you are willing to pay for subscription costs, state costs, and your tax filing needs.
FAQS: What factors are likely to increase my tax refunds?
What factors are likely to increase my tax refunds?
In general, any action that reduces your taxable income increases your income tax refund. As a result, you should get more tax credits tax deductions and endeavor to itemize tax returns on your income. This way, you get higher tax refunds.
How much does a tax preparer make?
On average, a tax prepare earns about $46 800, according to the Bureau of Labour Statistics. However, tax preparers make more than the median salary, especially those with additional academic qualifications and work experience. Also, if you work in a firm in a city with a higher cost of living, you could earn more than the average pay.
How long is Tax season?
The beginning of every year is when tax season starts and lasts for about three-and-a-half months. It is usually a hectic period for everyone, including accountants, tax preparers, and taxpayers.