They say nothing is certain in life other than death and taxes. While I can’t do anything to help you with the death thing, I can tell you how income tax preparation software packages can help you save some money when it comes time to do your taxes.

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Paying taxes is something that everybody must do and most people fear. We look at that April 15th deadline like it was the end of the world and usually try to avoid it at all costs. I am here to tell you that with all the online income tax preparation software packages out there, you need not fear the IRS any longer. All you need to do is get your stuff together then go to the program of your choice and you will be walked through the process of filing your tax return.

Here is a basic list of things you will need to do your taxes. This is the same whether you are doing them yourself, at the local tax professional, or with online income tax preparation software. If you have all of these documents handy, you will zip right through your tax return.

The first thing you need is your income documents. You will need your W-2 from your employer as well as statements for any interest you received from your bank, earnings from investments, and your state tax refund from last year.

The second thing you need is your deductible expenses. If you are paying a mortgage, you will get a statement from your bank telling how much interest you paid. If you donated to charity, your church for example, you should get a statement from them documenting how much you donated. If you are paying off a student loan which has interest on it, again, you should get a statement. You may also have other deductions that you may not have a receipt for. One example I can think of is Good Will donations which are deductible, but you won’t get a statement from them. You should have gotten a receipt of sorts when you donated, but you will have to estimate the value of what you donated.

The last information you will need is information on your dependants. You will have to enter social security numbers and information for your spouse and kids in order to claim them and get the appropriate deductions. If you choose a good online tax preparation site, you will be able create an account that will save your information for next year so you won’t have to re-enter this information.

Once you have all of these documents, just go to the online income tax preparation software program you choose and start entering the information. The program you choose should walk you through filling out the information and e-file for you so you won’t even have to mail in your return. Easy as 1,2 3 as long as you have all your documents together.

For the record, I am not giving specific tax advice and recommend using software or a tax professional to make sure you are following all the applicable rules. This will help you stay out of trouble with the IRS.

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Online Tax Software

Here is a listing of the best online tax software out there. If you have your information ready, you can get your taxes done today and save a bunch of money over paying your local tax accountant.

• Tax Act Online is my personal favorite for online tax software. They give you a free federal tax return and only charge you $13.95 to do your state tax return if you need to do that. They will also e-file your return for free so it gets to the IRS immediately and you don’t have to worry about the post office losing your return.
• Tax Brain is a service that helps you through your tax return. You set up your profile and answer some questions. The software prompts you to enter the right information, completes the forms, then recommends which option is best for you. You can also do your state tax return with Tax Brains online tax software.
• H&R block also offers a free online tax software option. They have 50 years tax experience and offer customers a great option for online tax preparation. They are the makers of the well established Tax Cut software. As with many programs today, they also offer free e-filing.
• Turbo Tax may be the most recognized name in home based and online tax software. They have joined the group offering free, basic online tax returns. They also have upgrade offers for more complex tax returns that could get you larger tax returns. Their state income tax filing can be added for around $30 (a little higher or lower depending on which option you choose).

One thing to remember when using tax software is that you are not getting tax advice. If you are going to be claiming exotic deductions, you really should get help from a professional. These programs are great if you are just going to use the standards deductions like mortgage interest, student loan interest, etc.

Technorati Tags: income tax software, online tax software