I remember the first time I had to do taxes on my own. It was 2004, I just started working full time the previous year and I headed over to the post office to pick up a Form 1040 and the fantastically written instructions.
I was fortunate that year, my tax situation was simple enough that I could fill out a Form 1040EZ, which was far shorter and far simpler.
In the years since, I’ve realized that I should be using tax software to do my taxes. If your tax situation is simple and your income qualifies, it’s often free. If you don’t qualify for free filing, it’s still much cheaper than paying someone to do your taxes.
1. It Is Cost-Efficient
Hiring someone else to prepare your tax return can get expensive. I’ve worked with a small business tax accountant in the past and my tax returns cost over a thousand dollars.
Tax preparation software, by comparison, is reasonably priced. If you have a simple tax return, you can also file your federal taxes for free with TurboTax. TurboTax is also easy to use. You answer a few simple questions about your life and you can e-file your tax returns easily and accurately. You can also get answers to your tax questions from credentialed tax experts who are CPAs and enrolled agents – free if you’re using TurboTax online.
2. It Is Easy & Near Foolproof
Tax preparation software simplifies the process significantly.
TurboTax double checks your tax return throughout the experience to make sure you’re getting every tax deduction and credit you deserve and double checks for errors.
There’s also the matter of knowing which forms to fill out. With so many schedules out there, you may miss one. With tax prep software, all of that is figured out for you. Answer the questions, provide the requested information, and the tax program does all the rest.
You can also get versions that support your state tax return, so that you can have the same ease as with the federal version. TurboTax automatically transfers your federal tax information to your state tax return to eliminate you inputting the same information over again.
3. Get Your Refund Faster
This is my favorite reason for using tax preparation software – e-filing.
Most tax prep programs are compatible with e-file from the IRS. This is good news, since it allows you to file your tax return electronically – which is faster and more secure. Those who use e-file can expect to receive their refunds much quicker than those who don’t.
If you include the option to receive your tax refund via direct deposit, you can get your money even faster since you don’t wait for the check in the mail. The combination of e-file and direct deposit means that you are likely to have your tax refund in the bank within 21 business days of filing.
If you have common tax situations, tax software is the way to go. Spend your time and money saved on something that makes you happy!