What You Need to Know Before Using Tax Software

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As April 15 starts its annual march toward us, and commercials for a variety of tax preparation services begin to air, you might be considering how to file your tax returns for this year. Whether you regularly defer to a tax professional, or regularly go at it yourself, armed with your W-2 and pen and paper, you might find yourself considering tax preparation software. Before you commit to using it, though, we wanted you to know what you should do to prepare. We spoke with Jessi Dolmage from TaxACT to see what important features and concerns need to be investigated and addressed before e-filing.

Research and compare services.

Dolmage recommends doing “an apples-to-apples comparison of do-it-yourself tax solutions.” Although at first glance they may seem to be identical, different services and software programs offer different forms and different price-points. Dolmage explains, “Some require you to upgrade if your return requires tax forms for more complicated situations.” Pricing for state returns and pricing for the type of service (online versus download versus mobile) can also vary from service to service, so be sure to do your research before committing.

Be careful with mobile.

“If you want to file via a mobile app,” Dolmage says, “look carefully at filing requirements and pricing. Some only cover very basic returns, and state returns may cost extra. Consider accessibility as well — if you end up wanting to finish and file your taxes online, does that information transfer?” If you do decide to use a mobile service, ensure that it works on your particular mobile device before getting too far into the process.

If you’re unsure, do a test drive.

“If you’re leery of doing your own taxes, remember you can test drive most online and mobile solutions risk-free. If you’re using a paid product, you usually aren’t required to pay until you file your return.” Dolmage also reminds us, “If you need help at any time, DIY solutions offer help every step of the way as well as one-on-one assistance.”

Once you’ve decided on a service, keep in mind the following general tips from Dolmage.

Double check, double check, double check.

“Whether you’re receiving a refund or owe taxes, double check the routing and account numbers on your return. One incorrect number can mean several extra weeks of waiting for your refund, someone else receiving your refund, or your refund being sent back to the IRS.”

Pay by April 15.

“File your tax return and pay any taxes owed by the April 15 deadline. If you need more time to file your return, file Form 4868 for an automatic six-month filing extension. However, keep in mind you’re still obligated to pay any taxes owed by April 15. Pay late and you’ll incur penalties and interest fees.”

Don’t procrastinate.

“Don’t wait until the last minute. Rushing often leads to errors.”


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