What are the Best Tips for Using Income Tax Return Software?

B. Miller
B. Miller
Most regular employees in the US need a W-2 to complete their tax returns.
Most regular employees in the US need a W-2 to complete their tax returns.

Income tax return software can be a great way to prepare income taxes, ensuring that calculations are correct, and that forms are filled out properly. It is important to remember, though, that income tax return software is not an excuse for not understanding tax laws or the way in which income or deductions must be reported. Mistakes in taxes are still the responsibility of the user, and they can be costly. For this reason, some of the best tips for using the software are to be sure all tax documents are compiled in one place, and then go slowly through the program, looking up the answers to any questions that arise.

Be sure that all documents for the tax year -- including employer, bank and brokerage statements -- have been received and gathered before you begin entering data into the software program.
Be sure that all documents for the tax year -- including employer, bank and brokerage statements -- have been received and gathered before you begin entering data into the software program.

Before beginning the tax return using income tax return software, it is important to be sure that all income statements have been received. The deadlines for these can vary in different countries, but any income that an individual received throughout the year will be reported on one of these forms, which are then used to fill out the tax return. Other documents, such as interest paid on a mortgage or school loan, educational expenses, or alimony payments made should be gathered as well. This will make it easier to use the software and to enter the correct figures when they are requested.

Next, read the instructions on the income tax return software to be sure you understand how to use the program and how to save the tax return if it is necessary to close the program before it is finished. While proceeding through the software, read the directions for each question carefully, and do not ever guess at an answer. If unsure, look it up, or ask for help from an accountant or tax advisor. It is helpful to have a basic understanding of what deductions or expenses can be claimed as well; some software programs will ask users if they want to file for each possible deduction or income source, while more basic programs will allow users to choose from a list.

Another important thing to remember when using tax return software is not to rely on the software to catch all errors. Before filing the return, print out the actual documents and go through it to be sure the declared amounts are correct. Not claiming a certain amount of income, for example, is tax evasion, whether it was a mistake or not. There are many different versions of income tax return software that can help complete the taxes, some of which are free if users meet the requirements; as long as they are verified by the government, they are all typically equally safe to use.

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    • Most regular employees in the US need a W-2 to complete their tax returns.
      Most regular employees in the US need a W-2 to complete their tax returns.
    • Be sure that all documents for the tax year -- including employer, bank and brokerage statements -- have been received and gathered before you begin entering data into the software program.
      Be sure that all documents for the tax year -- including employer, bank and brokerage statements -- have been received and gathered before you begin entering data into the software program.