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Best Tax Filing Software Options For 2020

4-minute read

Now that 2020 is in full swing, it’s time to think about taxes. If the idea of filing taxes overwhelms you, rest assured that modern technology can make the process far easier. Fortunately, there are a number of tax filing software options at your disposal. With the right software, you can ensure you get the job done properly and reduce the risk of time, money and headaches down the road.

Important Things To Know About Your Taxes

Whether you’ve filed taxes countless times before or this year will be your first time, there are a few things to keep in mind. Once you know these things, you can enjoy a smooth filing process with minimal stress and confusion.

When The 2020 Tax Season Is

According to the Internal Revenue Service, Monday, January 27, 2020 marked the start of tax season. This means, you can begin to submit your paper and electronic tax returns that day. Your taxes will be due Wednesday, April 15, 2020.

What You Owe In Taxes In 2020

The types of taxes you owe in 2020 will depend on your employment and living situation. Here are a few of the most common types.

  • Federal Income Tax: Federal income tax refers to the tax you pay on your income, wages and earnings. If you work a traditional job for an employer, this tax will come out of your paycheck. However, if you’re self-employed, you’ll need to take care of this tax on your own. You may do so via estimated quarterly payments.
  • State and Local Income Tax: Just like the federal government, most states charge an income tax. You’ll be on the hook for this type of tax unless you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming.
  • FICA and Payroll Tax: Federal Insurance Contributions Act and payroll tax are removed from your paycheck by your employer. You’ll have to pay for these yourself if you’re self employed.
  • Self-Employment Tax: If you work for yourself, you’ll be on the hook for self-employment tax, which is 12.4% for Social Security and 2.9% for Medicare.
  • Property Tax: Own a property? If so, you’ll need to pay property taxes that will depend on its value and location.

You may be eligible for tax allowances and deductions, which can reduce your overall tax burden.

Your Tax Filing Options

As a taxpayer, you can choose how you’d like to file your taxes. You can fill out your taxes manually or online through a tax software. If you need help with them, you’re welcome to hire a Certified Public Accountant or another tax professional. Filing on your own is also an option.

Using Software To File Your Taxes

If you’d like to save time and money on your taxes, tax filing software may be the optimal choice. It can allow you to file your returns from your computer in the comfort of your own home. In addition, tax software can provide you with answers to common tax questions, maximize deductions, and keep your tax information in one safe, secure place. The IRS approves many tax preparation companies and their software to give you some much-needed peace of mind.

Tax Software Factors To Consider

All tax software is not created equal. That’s why it’s important to consider these factors when shopping around for the ideal option:

Your Budget

Take a close look at your personal budget and figure out what software options you can realistically afford. If you’re on a tight budget, no worries. There are a variety of reasonably priced or even free software solutions that can still get the job done properly.

Ease Of Use

There’s no denying that filing your taxes can be a frustrating process. Therefore, determine which software options offer the most intuitive interface and provide the easiest user experience. If you can’t figure out how to navigate certain software, it’s probably not a good option, even if it’s free or very affordable.

Customer Support

Hopefully, you’ll be able to breeze through the process of filing your taxes. If this doesn’t happen or if you run into roadblocks, however, good customer support will be imperative. Make sure the software you select offers comprehensive support options you can rely on.

Best Online Tax Filing Options For 2020

Based on the factors we just discussed, these are Rocket HQSM’s choices for the best tax filing software options available in 2020. Keep reading to learn more about each one.

TurboTax

TurboTax offers an incredibly intuitive interface and a number of tools, like the IRA tool and ItsDeductible tool, that make it easy to calculate your numbers with accuracy. Also, TurboTax saves your information from previous years and allows you to import data from QuickBooks. In addition, it gives you the ability to capture your W-2 and other tax forms with your phone’s camera.

H&R Block

With H&R Block’s tax filing software, you get the Peace of Mind Extended Service Plan. So, if you’re ever audited after filing your taxes, H&R Block will tell you what the issue is and help you resolve it. Before you even use the software, you’ll know exactly how much you owe and receive real-time insight into your refund or tax balance as you go through the filing process. You’ll also get a free midyear tax check-in, which will remind you to check and adjust your W-4 withholdings if necessary.

Credit Karma

The Credit Karma tax software is a free way to file your federal and state income taxes. You can file your taxes in one of two ways: interview-style filing or self-guided filing. With the interview approach, you’ll answer easy questions such as whether you contributed to retirement in the past year and how many dependents you have. The self-guided method allows you to navigate to the sections that you need to fill out. You’ll find labels and tutorials on everything, as the software was created to eliminate any confusion.

TaxSlayer

TaxSlayer’s interface is well-designed, as it allows you to skip around to various sections and keep track of your progress. You can also use the self-employed area to determine if you’ve forgotten to deduct any expenses and to help you find tax breaks specific to your industry. Additionally, you’ll get free tech and phone support. If you have a basic tax situation, you can use the free version as long as you create an account.

Before you choose a tax-filing software option, explore all of the options available to you. Be sure to weigh the pros and cons of each so you can make an informed decision for your unique situation. Best of luck and happy filing!

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