Top 5 Tax Softwares of 2021
The year 2020 is over, and that can only mean one thing: it is tax filing season again! Now more than ever, it is very important to file taxes and get a good tax credit. The awful COVID-19 pandemic has made the economy all the more critical, which is why you must make sure that your household is ready to face another difficult year.
It is important to get one thing right off the bat: not everyone needs to file for a tax return. It depends on your salary, filing status, among many other requirements. Generally, unless you are claimed as a dependent, or you do not work, you need to file tax returns if:
Your net salary for the year is $12,400.
Your revenue tops $1,100.
Luckily there are some very good software that makes doing your taxes fast, easy and relatively cheap.
Which Tax Forms Do You Need to Prepare Your Tax Return?
Before filing your tax return, gather all of the relevant documentation and forms. These forms will cover all sorts of data, but most specifically, information concerning your wages and deductions. You will receive a vast majority of these in the mail. These are the most important tax forms:
W-2: This form is sent from employers to employees. It includes all the information regarding the amount of income tax deducted from your paychecks as well as the amount you spent. You will get this form whether you worked full or part time.
1099: This form is used to report revenue from other sources apart from a full-time job. If you earn money as a private contractor or a freelancer, you need to get this form.
1099-INT: This is another type of 1099 that you will get if you have received interest from a savings account or if you earned money from stock dividends.
1098: You get this form to state every payment you made on your student loans or your mortgage. As long as your salary is above the earnings limit, you can subtract up to $2,500 in interest.
What is a Tax Software?
Many years ago people filed their taxes manually, often enlisting the paid services of an accountant. Fortunately, tax software was created to make life much easier. Tax software uses a step-by-step process that asks you a few questions to get necessary information to fill out the required forms. Generally, this software will charge a fee, but in return, it will complete all forms and file them for you. This is an excellent return of value as it is often much cheaper than having an accountant do the work for you.
However, it is important to remember that this software does not ensure that you will not be audited at the end of the process. This is one of the perks of hiring an accountant or tax company, but those tend to be much more expensive. Fortunately, tax software continues to improve in error detection which is why it is safe to rely on them to file taxes.
What Are The Top 5 Tax Software?
Tax software has evolved significantly over the years to make paying taxes as easy as possible. Here you have a list of the best 5 tax software right now:
When it comes to reliability, there is no software better than TurboTax. This program offers a wide number of features like a full tax reimbursement guarantee, access to several deductible tips, and more.
- Very easy to use.
- Access to expert advice.
- Live-video support.
- Availability of audit protection.
- Different pricing plans starting at $50.
2. H&R Block
Price: Free up to $90
Like the rest of software mentioned here, H&R Block uses a Q&A style to get information from the users. It has a wide range of features that include several import tools, live tech assistance, and data protection. If you are not an expert at filing taxes, you can use this service for free. If you have a more difficult tax situation, you might need to pay some money.
- Very intuitive interface.
- Live technical assistance available.
- Top-of-the-line import tools.
Price: Free up to $70
This is one of the oldest companies in the tax filing industry. For that reason, it is also one of the most reliable right now. Likewise, its software is one of the easiest to use at relatively reasonable price (it can also be used free of cost in some instances). In case you only need to file a basic W-2 form, and you make less than $100,000, you can use the program for free.
- Easy and simple user interface.
- Great error-checking technology.
- It helps you determine which forms you need to file.
Price: Free up to $47
This software has been around for some time as well. It helps you identify which forms you must file, and it offers several tips that come in handy throughout this process. Likewise, if you have a very easy tax situation, for example a part-time job, this software is particularly beneficial since it is free to use. If your tax situation is more difficult than that, this app has you covered as well for a great price.
- Access to expert tax practitioners.
- Incredible form completion support.
- Fast file system
5. Credit Karma
In case you desperately need a free option to file your taxes, you can rely on Credit Karma. It was founded back in 2016 but, due to an impressive customer review satisfaction, is being labelled one of the best software to use. The greatest perk of using this software is that it is completely free. Also, it provides a wide variety of features at no cost whatsoever: import tools, audit protection, a smart file system, and more.
- All you need to do is upload a picture of your W-2 to begin.
- Import tools to import from other tax providers.
- Audit protection.