Are you thinking of preparing your own tax return? Fortunately, there are many programs available today that make it easy.
Tax Basics
Tax day 2020 is April 15th. You must file and pay your taxes by this date to avoid penalties and fines. If you fail to pay your taxes due by this date, you may pay a penalty of up to 25% of the unpaid amount. You also may be subjected to a penalty of $210 or the entire tax due (whichever is less).
If you can’t file your taxes by April 15th, 2020, you must file for an extension by April 15th, which extends your due date to October 15th, 2020. It’s essential to file for the extension, or you risk paying penalties for not filing, which are much more than late payment penalties.
You may wonder whether you need to file a federal tax return. If you are under age 65, are single and earned less than $12,200 in 2019, you don’t have to file taxes. If you are married filing jointly, and both spouses are over age 65, only couples with income greater than $24,400 must file. If you are over age 65 and single, you only need to file if your income is greater than $13,850, and if you are married filing jointly, your income must be greater than $27,000 to trigger the need to file.
The Top Software Programs
TurboTax
TurboTax is a little pricier than other options, but its ease of use and numerous bells and whistles make it well worth the cost.
Costs/Fees: TurboTax offers four versions – TurboTax Free, Deluxe $30, Premier $55, and Self-Employed $70
Free Plan: TurboTax Free is a free plan if you have a simple tax return. In other words, you have only W-2 income, no schedules, and will claim the standard deduction.
Paid Plans: The TurboTax paid plans offer more options, including:
- Deluxe – Helps with filing Itemized Deductions including homeowner tax breaks and charitable deductions
- Premier – Helps investors properly file taxes as well as search for the maximum tax deductions
- Self-Employed – Get guidance on paying the appropriate taxes as a self-employed taxpayer as well as finding maximum deductions specific to the self-employed
Support: TurboTax guarantees 100% accuracy of your tax return, or they’ll pay your IRS tax penalties. They also provide an Audit Support Guarantee and access to a customer service representative via your online dashboard.
H&R Block
H&R Block offers lower prices and more value in its free tax filing version than TurboTax. H&R Block offers ease of use and plenty of support, including online articles and a community forum.
Costs/Fees: H&R Block offers four versions – Free, Deluxe, Premium, and Self-Employed
Free Plan: The free tax filing version is for any W-2 employees as well as those with Earned Income Tax Credit, childcare expenses, student loan interest, retirement plan income, Social Security income, and the child tax credit.
Paid Plans: H&R Block’s paid plans include:
- Deluxe – This is for homeowners, those with charitable donations, or HSAs.
- Premier – Freelancers, contractors, and investors use this version to import expenses maximize deductions, and deal with the complicated freelance contractor taxes.
- Self-Employed – Self-employed taxpayers that need tax expert guidance benefit from this version that includes on-demand chat and screen sharing services to help you get all business tax deductions available to you.
Support: H&R Block offers LiveChat support from 7 AM to 11 PM CT weekdays and 8 AM to 7 PM weekends as well as 24/7 technical support. H&R Block also provides limited audit support.
Credit Karma Tax
Credit Karma Tax is new to the realm of tax preparation software, but it packs quite a punch. It’s one of the only completely free tax filing software programs available.
Costs/Fees: Credit Karma Tax is entirely free for both federal and state tax filing.
Free Plan: Credit Karma Tax only offers a free plan that is available to ‘most’ tax filers, including the self-employed, investors, and those with large charitable donations.
Support: Credit Karma offers knowledge articles throughout the process of filing your taxes, as well as the opportunity to call in for assistance. They also provide a Maximum Refund Guarantee, Accurate Calculations Guarantee, and an Audit Defense, each of which protects you should Credit Karma have an error in your filing or calculations.
