It’s that time of year again, folks, whether we like it or not — tax season.
Before you click out of another mundane article about filing taxes (ahem, don’t), we’re here to bring you the five best tax software programs to file your income and other commitments before the 2022 deadline.
And, we’re well-versed on the topic for this quick guide, Garrett Watson — a senior policy analyst at The Tax Foundation who conducts research on federal and state tax policy — answers an FAQ on taxes below.
Find the best tax software of 2022 to file your taxes and rest assured that all is complete before the deadline (which is Monday, April 18 for most states).
Add at least one to your cart now so you’re well-equipped to do that money crunch.
An FAQ with a Tax Expert
Ahead, find the answers to your top tax questions below from Garrett Watson.
What is the deadline to file taxes?
This year’s national deadline is April 18, while residents of Maine and Massachusetts have an April 19 deadline because of the Patriot’s Day Holiday, according to Watson.
“Taxpayers can request a six-month extension for filing tax returns, but it does not change the payment deadline of April 18,” he adds. “This means that payments remitted after this date for taxes owed may be subject to penalties and interest. The best practice this year is to try and file electronically as much as possible, as the IRS has a large paper return backlog that may increase your risk of delays if you file a return on paper.”
How should I file taxes if I invest?
“Capital gains from investments are taxed as ordinary income if they are realized on an asset owned for less than one year, while capital gains from assets held for longer than one year are subject to lower tax rates,” Watson explains.
That said, taxpayers should submit a Schedule D form with their individual income tax return (or directly on Form 1040 if applicable). Taxpayers may also deduct up to $3,000 in capital losses from ordinary taxable income, but must carry over any additional losses to be used in future tax years, he notes.
What information do I refer to when filing taxes?
“It’s important to have on hand all of the relevant income sources when filling out your tax return, including but not limited to W2 forms for wage income and any taxable benefits, interest income from sources like a savings account and self-employment income,” Watson said.
If you have self-employment income, having a good understanding of your total gross income and expenses that can be deducted from that gross income helps ensure you’re not overpaying or underpaying in taxes, too.
What’s the difference between using tax software and hiring an accounting firm?
“Tax preparation software is well-suited for taxpayers with straightforward tax situations, especially if they do not have a complicated business tax situation and take the standard deduction or limited itemized deductions,” Watson said.
However, for more complicated tax returns, professional preparers can “help identify areas where mistakes are more common and point out any missed opportunities to reduce one’s taxable income,” he adds.
Best tax software to file online
1. TurboTax Premier | Investments and Rental Property, $100 (originally $110)
From filing stocks, bonds and mutual funds to employee stock plans and rental income and expenses, TurboTax Premier provides a full suite of tracking and filing options for you to have in one centralized hub.
What’s more, you’ll have access to everything in TurboTax Deluxe. Notably, there’s a feature to maximize your IRA savings to get more money back this year and when you retire, along with assistance if you purchased and sold stocks at different prices.
2. H&R Block 2021 Deluxe + State Tax Software, $29.97 (originally $44.99)
If you’re a money nerd like we can be, you’ve likely heard of H&R Block. Its Deluxe + State Tax Software bundle is currently on sale for $30 and is ideal for those seeking to minimize deductions on your home and other properties.
Aside from providing the filing layout, this bundle uniquely provides step-by-step guidance on more than 350 credits and deductions and, impressively, in-person representation in the unlikely event of an audit.
3. TurboTax Deluxe, $70 (originally $80)
TurboTax offers its Deluxe bundle, encompassing federal snd state filings with areas to account for donations, education and medical expenses and mortgage interest. For the typical homeowner and employee, this on-sale tax software is your best bet.
4. TaxAct Comprehensive Filing System, $24.95-$64.95
What’s great about TaxAct is its well-curated bundles that target different classes of individuals: the homeowner, the investor (including real estate) and the self-employed (content creators, we’re talking to you).
Along with specialized options, TaxAct provides virtual live assistance from CPAs and other tax experts with the Xpert Assist add-on. And, in the event of a tax refund, you can even get reimbursed from TaxAct with its Refund Transfer option.
5. TaxSlayer, $17.95-$47.95
As a tax software program with one of the most affordable, baseline options available, TaxSlayer is a clear-cut winner. Its best value package, the Classic plan, helps you file all forms, credits and deductions.
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