Tax Prep Software
It seems like a new tax prep software service emerges every year, making it harder for taxpayers to make a definitive decision on which service is the best. More importantly, many aren't even sure what exactly they should look for in a tax preparation service. For new or new-ish e-filers, start navigating your software search with these tips.
Evaluate your earnings
With a turbulent economy, it's not unusual for taxpayers to pick up extra odd jobs doing anything from freelancing to selling crafts on Etsy. In cases where taxpayers have an additional source of income, it's necessary to file a 1099-MISC form. Here are a few examples of what would qualify for the 1099:
- Payments to any contractor (individual or partnership) of more than $600.
- Professional fees to a doctor, attorney or other professional related to your business.
- Payment of $600 or more to rent office space, equipment, land, or machines for your business.
- Payments to corporations only if the expense falls under these categories: health care, medical, legal, or fishing activities.
Let the software be your guide
If this is your first time filling out a 1099, or you have a more complicated financial situation, look for tax filing software that offers explanations and a step-by-step process. This will help guide you through the confusing process, making sure you get your maximum return. If you think you have it covered, but want to use tax preparer software to check your math, look for services that make it easy to skip sections. The step-by-step process could get tedious for someone who knows what they are doing.
Although it might seem trivial, you'll also want to make sure the computer you're using has the capacity for your tax prep software. Check the memory, the operating system, and processing speed to avoid mid-file computer crashes. H&R Block offers a wide range of tax preparer software and accessible customer service so your first experience filing a 1099 will be as smooth as possible.