Don’t wait until April 14 to get started. If you know you are going to need an extension file early. This is the era of personal responsibility. I didn’t know does not have an air of credibility to it, neither will it hold up with it comes to dealing with Uncle Sam! The following Income Tax preparation tips should help you have the most painless experience for filing your taxes.

1. Visit www.irs.gov , this will be the best resource for what you need to know and you can file your taxes with them. The IRS “Free File” offers free tax preparation software to prepare and e-file your 1040. State taxes come with an additional cost tacked on.

2. Whenever possible file your own taxes. You can do this using any tax preparation software. After which you can have a professional look it over to give you peace of mind. Be sure to use a reputable tax professional who signs the tax return and provides a copy.

3. If you do choose to go with an income tax professional be very cautious of tax preparers who claim they can obtain larger refunds than other preparers. It is advisable to avoid preparers who base their fee on a percentage of the refund.

4. Gather the correct tax documents for your income tax preparations, W-2 vs. 1099, receipts, medical bills whatever you deem necessary for your taxes have it handy.

5. If you are going to used tax software to prepare your taxes make sure it is a licensed copy bought by you. If you go the online route use only trusted and reputable companies such as Turbo Tax, H&R Block or your favorite. Do not give out your personal information.

6. File Online. No only will you save time, receive instant confirmation that the IRS received your tax forms on time but you will also speed up the refund process because it takes less time for the IRS to receive your taxes. All tax preparing professionals should be able to file your taxes online for you. Just ask and make sure you get documentation that your taxes were indeed e-filed.

7. Take Advantage of Direct Deposit. Remember how I said you will speed up the refund process earlier? If you file for direct deposit, you will receive your refund much more quickly. Just be sure to provide the correct details for the money to be sent to you. How will you know when you get it? Well…it’s going to be a nice huge sum that how you know. You will need your bank’s routing number and your account number. Both of these numbers are available on your ONLY on checks.

8. Avoid the temptation and beware of fast pay loan options

You will pay an exorbitant amount in fees and interest to receive your refund just a week faster than normal. With the ability to file online, and with the amount being direct deposited into your account, the estimated time to receive your refund is about ten days. This is a reasonable amount of time to wait. A little patience in the matter will save you hundreds of dollars. You’ll be glad you slept on it!

Unless you are a Certified Public Accountant, this is just not your game. You need tax software so that you don’t go to jail or worse still loose everything you have worked so hard to obtain.  When it comes to money owed, Uncle Sam doesn’t play nice.

If the recent bankruptcies of the Lehman brothers, AIG and not to mention the shady accounting practices of the Enron years that brought us to where we are today.  If the resultant domino effects have taught us anything it is that you have to get in there, pull up your sleeves and deal with your own money.  Long gone are the days of forking over your personal responsibility to another and hoping for the best. We live in a very competitive world where you can almost anything with the touch of a button.  A hand-prepared return, no matter how well is a passive downright non-productive method of handling your personal finances.  Tax software not only increases the speed and ability with which to process returns while increasing accuracy simultaneously. 

Advantages Of Tax Software
 
1. They do all calculations for you with guaranteed accuracy

2. They show your tax refund add up in real-time

3. They explain how common life changes—such as buying a home, getting married, changing jobs, or having a baby—will impact your taxes, and tells you what you can deduct

4.Show you what you’re importing and where it goes in your return.

5. Many come with downloadable Audit Support Centers which give you step-by-step guidance on everything you need to know and do if the IRS contacts you e.g., Turbo Tax  Others have audit guarantees e.g., H&R Block

6. Many will search your return for up to 350 or more deductions, including mortgage interest, education, and medical expenses, to get you the biggest refund.

7. Tax Software, depending on your needs will provide extra guidance for investments sales such as stocks, bonds, mutual funds, and employee stock options plans.  Additionally many will help you qualify for deductions for your IRA contributions that will reduce your taxable income, thereby boosting your refund.

8. If you have a home based business for example, tax software programs will help you determine which depreciation method will get you the biggest deduction for your large purchases.  Which  one of you doesn’t want to know which depreciation method will get you the biggest deduction You will also be guided on whether you are eligible for a bigger vehicle deduction using actual expenses or the standard mileage rate.  You will also be shown what startup costs new businesses can deduct.

9. For those people who are property owners, you will be walked through the painless process to find as many as 20 deductions for landlords, from travel to advertising to repairs to insurance.  Additionally you may get guidance about how to deduct points, appraisal fees, and recording costs to maximize refinancing deductions depending on your needs.

10. For the serious entrepreneur you will get with some tax software packages expanded Schedule C guidance showing you precisely which expenses you can deduct for your vehicle, supplies, home office expenses, and more to maximize your business deductions.  You will also be led by hand through the process of tax write-offs for your industry to help you spot commonly overlooked deductions helping you ensure you don’t miss a thing.

The most outstanding feature of Tax ACT is its price coming in at a very cost effective $16.95 Tax Cut Ultimate package especially considering it offers both Federal and state filing. This service supports federal and 43 state electronic filings. You can print and mail as many copies as you want (one can never be too paranoid about taxes).

As with other tax preparation software, it comes with an easy to use interface as well as the standard questionnaire/interview format to help you navigate your tax returns with ease. Not only that, they have totally embraced new technologies and offer introductory videos to help you along the way. To top it off, there is a searchable Help Center where you can find support by keyword.

Tax ACT is a class act and it is no wonder that it won the “TopTenREVEWS Bronze Award” for 2009.

Tax ACT comes in Standard, Deluxe, and Ultimate versions

* Standard - Free version with e-file for a federal return, but does not include access to online support materials.

* Deluxe - Includes expert tax help and advice. Deluxe is priced at $7.95, plus an additional $9.95 for state. Surprisingly, Deluxe supports a number of income streams that are only supported by the $80 and up ‘Home & Business’ versions of other tax preparation software. It covers investments, home ownership, securities, and rental income.

* Ultimate - Essentially a bundled version of the deluxe includes both Federal and State tax returns for $16.95

ADVANTAGES OF TAX CUT ULTIMATE

1. Tax ACT Ultimate Online has phased out the manual form entry instead offering a streamlined interview process that’s so simple to follow. Were it not for the fact we are dealing with taxes here, I venture to say while using this software you’ll almost forget that this is a tax-related service.

2. Investors can import capital gains transactions from programs such as GainsKeeper©.

3. Tax Act provides the “Life Events” a nifty and handy feature. The “life events” feature has the ability to determine the future tax impact of life events such as marriage, adding children to your family, income adjustments, divorce and more.

4. Tax ACT Ultimate Package guarantee their calculations. In fact, they will pay your penalties and interest if the software makes a calculation error.

5. Once your federal 1040 is completed, the state return only takes a matter of minutes to complete because all it does is automatically transfer federal information.

6. Tax ACT Ultimate is also available in a software download version for $19.95 and a CD for an additional $5.95. The software includes federal and state filing and all of the convenient features of the online version. The advantage of the software version is you can use the same program each year as long as you update the software.

CONS OF TAX CUT ULTIMATE

1. The disadvantage is that you have to install the software on your computer, update it yearly, and it costs $5 more than the online version plus shipping fees.

2. Tax ACT’s interface is considerably less sophisticated and therefore more tedious than its higher priced competitors. For example only one interview question is presented per page, so it can be extremely difficult to click back through to a specific form.

3.The tiny font makes it so that the menu options are particularly prone to mis-clicks.

4.Interview questions are filled with tax language that the average filer might not always understand.

5.Tax ACT will not import data from Quicken or any other tax service.

TurboTax is said to be the #1-rated, best-selling tax software in the nation.  Turbo Tax Free Edition includes free IRS e-file with which you can easily prepare your tax return and file income taxes online, now that is great service.  The one catch is that you do get to try it for free, but pay when you file!  I love that entry is free, but pay at the door. 

With Turbo Tax you get 5 options that allow you to cater for your needs.  These options include:

1. Free edition  i.e., 1040EZ & Simple Returns, this is sufficient for the majority of W-2 income earners.  State taxes are an additional $25.95 per state

2. Deluxe Package priced at $29.95, for Federal Tax Filing. State taxes filing are an additional $ $34.95 per state per state.  This a great package if you own a home, if you made any charitable donation or have had medical expenses.

3. Premier Package ($ 49.95) For Investments & Rental Property.  For those who own stocks, bonds, mutual fund and/or rental properties, Turbo Tax premier offers the biggest bang for you bucks.  State taxes are an additional $34.95/state.

4. Home & Business Package priced at $74.95 for Personal &Business All in One, Federal is included at no cost. There is an additional $34.95 for filing state taxes. If you’re a sole proprietor, consultant, contractor or single-owner LLC, TurboTax Home & Business is the right fit for you.

5. Business Corporations, Partnerships & LLCs Package is priced at $109.95. Included are federal and free e-file.  The additional State filing fee is also $34.95. If you have a corporation, partnership or multi-member LLC, TurboTax Business maximize your business tax deductions is a good fit.

Advantages of Turbo Tax Cut

-Step-by-Step Guidance

-Easy to use, easy to file, with extra help

-Asks easy questions in an interview format.  Questions that are customized to your situation, puts your answers on the correct IRS forms, checks for errors  

-Includes Audit Support Center

-For the early birds, Turbo Cut gets your W-2 and 1099 data directly from over 100,000 participating employers and financial institutions and puts it in the right forms for you

-Maximizes deductions for the biggest refund   

- Transfers info from last year’s TurboTax return to this year’s (if you used turbo tax) instantly.

-Turbo tax will import your financial info from Quicken® , Microsoft money, quick books to save you time

-Uncovers deductions for rental property 

-Provides guidance for investments 

-Provides guidance for self-employment income

A great tax preparation software is one that is thorough and easy to use, even for complex returns. That is what Turbo Tax offers.  It is a powerful, fast, accurate, easy to use piece of software. The program is well organized and everything is written in terms that everyone can understand.

Cons of Turbo Tax Cut

As with any piece of software, you can anticipate bugs and glitches.  Don’t make the mistake of buying or getting boot-leg copies. Viruses are plenty and now is not  time to try and cut corners.

Did you catch the Super Bowl ads?  You know H&R Block : Murray Ad? This ad had the message “be certain your taxes are done right with the H&R Block Second review? It is said is as certain as change, death and taxes! H&R Block did not skip a beat in reviving the old cliché the tax-man cometh, are you prepared?

One of the most publicized tax software programs is the H&R Block TaxCut.  It gets a 5 star rating for how easy it is to use. This multi-purpose tax software  is designed to maximize your deductions (the more the better). TaxCut gives you 5 free federal e-files and multiple returns and starts at  a very affordable $19.95 with the basic federal e-file.

With TaxCut you get 4 options namely:

1. Basic Federal +E-file ($19.95),  also known as Simple Returns/1040EZ.  You get:

• 5 free federal e-files
• State taxes come with an additional fee of $ $24.95

2.  Premium Federal +E-file ($34.95).  This is for those who do and have Itemized Deductions & Investments.  You get:

• 5 free federal e-files
• State taxes come with an additional fee of $24.95

3.  Premium Federal +State + E-file ($49.95).  This provides the biggest bang you’re your bucks.  You get both:

• Federal & State Taxes Preparation
• 5 free federal e-files
• 1 state tax program

4. Home & Business +E-file ($79.95)  This is a timely addition considering the rise in popularity of home based businesses.  It comes with 2 Complete Programs in One (for the W-2 and 1099 crowd). You get

• 5 free federal e-file  for personal taxes
• 1 personal & unlimited business states

Pros Of H&R Block TaxCut

* Comes with interview based questions, with directions on where to find the information

* Imports from financial software, so for those of you that keep records now is the time for pay-off for your preparedness

* Error checking.

* Guidance for investors and self-employed, the addition of the home business line is definitely a plus for many work at home business owners.

*Immediate download options and get this for both Windows and Macintosh! Which means you can choose from either downloadable or online tax preparation solutions.

*All versions include free eFile.

* H&R Block TaxCut can be purchased at any of your favorite stores from Amazon, Target to Wal-Mart!

* Audit support, which is a great plus in the event you are the chosen one.

* Tax professional assistance.

* Home & Business version for small business owners.

* Offers useful warnings and renders reminders

* You can spread out your work, it saves prior work done, so you can pick up exactly where you let off.

* It is Free to use ONLY if you have an adjusted gross income of $50,000 or less. AND you are age of 50 or less.

Cons Of H&R Block TaxCut

* As with any piece of software, you can anticipate bugs and glitches.  Don’t make the mistake of buying or getting boot-leg copies. Viruses are plenty and now is not time to try and cut corners.  Uncle Sam doesn’t play nice when it comes to its’ money that you worked so hard for!
   
* Compatibility with multiple browsers is still an issue.

The H&R TaxCut software comes highly recommended.  Remember to save all work done. Here is to bigger and better deductions for this tax season!