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Top 10 Tips to Master Your Tax Software

Michael Graw
Top 10 Tips to Master Your Tax Software
Tax software can make doing your own taxes considerably easier and help you find all the deductions for which you qualify.

However, tax software isn’t entirely effortless—you still need to work through your finances and the software itself to make sure your taxes are done correctly. The more you know about how to use your tax software and the more prepared you are for tax season, the easier the process of filing and getting your refund will be.

In this guide, we’ll share 10 tips for how you can master your tax software this season.

1. Start Early

One of the best things you can do to make tax season less stressful is to start early. Don’t wait until a few days before tax day to choose a tax software and start pulling together your financial records from the past year.

The more time you have to master your tax software, the more likely you are to get your filing right. That means making sure you have time to find all needed documentation, finding all the deductions for which you qualify, and getting the biggest refund to which you’re entitled. Starting early also gives you a chance to turn to a certified public accountant (CPA) in case you find that your taxes are more complicated than you anticipated.

2. Get Organized

Another key element of doing your own taxes with tax software is to get organized before you even start using the software. You’ll need to have all of W-2, 1099, and 1098-T forms ready to go, along with any other pre-prepared tax forms you might need. If you don’t have these forms already, contact your employer, lenders, banks, and brokerages to get them.

You can also simplify the process of using tax software by creating a master list of all your income and expenses for the year. If you keep electronic records of all your income and purchases, this should be relatively easy. On the other hand, if most of your financial information is found in paper statements and receipts, you’ll benefit from digitizing these records before you start on your taxes.

Importantly, you need to keep track of how you come up with the data that you enter into your tax software. If you make an estimate when calculating your expenses—for example, when figuring out how many miles you drove for work—be sure to take notes on your estimation process.

3. Make Sure You Have the Right Software

It’s also key that you get the right tax software for your needs. Some tax software is designed to be used by people with relatively simple filings, while other software is built for people with numerous forms and uncommon deductions. If you own a home or a business, or have a significant investment portfolio, you’ll need software that can accommodate financial data associated with these activities. Check out our list of the best tax software to find the right platform for you.

In addition, if you use tax software that’s downloaded on your computer, make sure you have the latest version of the software installed before you start. Tax tables, deductions, and other important tax variables change from year to year, and you don’t want to be using outdated information.

Finally, if you’re using free software, check whether it can do both federal and state taxes. There’s nothing worse than getting all the way through your taxes only to find that you need to redo much of your work to file a state return.

4. Answer the Questions in Order

Once you dive into your tax software, it can be tempting to jump from section to section to fill in the easy information first and return to more tricky questions afterwards. However, you should answer the questions in the order they’re presented as much as possible.

That’s because with many tax software programs, your answers to the sequence of questions will determine what forms you need and what information you need to enter later on. So, the order of the questions is just as important as answering them correctly to ensure your taxes are filed properly. If you jump around, you might find that you’re missing out on key deductions or that you need to re-enter information later. 

5. If You Don’t Know, Ask

It’s not unusual to run into questions in your tax software that you don’t fully understand or aren’t sure how to answer. When you come across these questions, it’s important that you never guess. Instead, turn to your tax software’s help resources.

Many of the top tax software platforms come with a built-in knowledge base so that you can quickly look up what a term means or whether a specific condition applies to you. Often, you can access these help guides from inside your software, so you can easily reference the question while reading about what it’s asking.

If you still can’t figure out how to answer the question, your software may provide access to phone or chat support with a tax professional.

6. Keep Track of Missing Information

Once in a while, you may find that you can’t answer a question. Maybe you don’t know how to answer it, or maybe the required tax form hasn’t been sent to you yet.

When that happens, it’s okay to skip the question for the time being. However, make a note to yourself that you have done so. Your tax software should automatically catch the missing response during the final review if you forget, but that won’t always be the case—especially if the question you skip is about a potential deduction. 

By making a note of what you need to return to later, you can make sure that you get all the deductions to which you’re entitled.

7. Pay Attention to the Final Review

Almost every tax software has a final review stage, in which the software double-checks that you’ve answered all the required questions and that your numbers add up. It’s easy to skip over this review, especially if you’re eager to file your taxes and finish up the whole process. However, the final review is your last chance to catch errors before you file, so it’s important to pay close attention.

For each point that the tax software flags, make sure you understand exactly what the software says is wrong. Then go back to that section of the questionnaire and check all the information you entered. If it still doesn’t seem quite right, you’ll need to go back to your initial tax forms and digital records to make sure you calculated the original data properly.

Only proceed to filing once the final review lets you know that your tax return looks good.

8. File Electronically

While you can print off your tax forms and mail them in to the IRS, it’s much simpler to let your tax software file electronically on your behalf. The cost of filing is included with most tax software, although some do require you to pay extra for filing state taxes. Still, filing directly from your tax software dramatically reduces the risk of making an error, so it’s worth a small added cost.

When you file electronically with the IRS, you should receive 2 separate confirmation notices at your email address. The first notice confirms that your filing was received. The second confirms that your filing was accepted. If your filing is received but not accepted, you’ll need to go back to your tax software and fix any errors that the IRS flagged.

9. Save Your Tax Forms

After you’re done filing, there’s one more thing you need to do: print off or save the tax forms that you submitted to the IRS. While you can typically access these for several years through your software, it’s good practice to save them in a safe place so you know they’ll always be available when you need them.

If you ever decide to take your taxes to a CPA in the future, they’ll want a copy of your tax forms from the past several years. These forms are also important to have on hand in the event that you need to defend yourself in an audit.

10. Know When to Turn to a CPA

While tax software is flexible enough to handle most people’s filings, there are times when you would be better off using a CPA. If your tax software doesn’t have forms that you need, for example, you may need a professional to work on your return.

Keep in mind that even simple tax returns can benefit from professional help. If you can’t understand a large portion of the questions you’re being asked, it might be time to visit a CPA.

Helpfully, some tax software platforms have CPAs on staff. Just request professional help, and a CPA can take over your filing wherever you leave off.

Conclusion

Tax software is designed to simplify the process of filing your taxes, but it can still be confusing if you’re new to filing on your own. With these 10 tips, you can learn to master your tax software and ensure that your tax return captures all the deductions that you deserve.

Michael Graw
Michael Graw is a freelance writer and journalist based in the Pacific Northwest who writes for top10.com.