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what to look for from a tax filing service

If filing your federal income taxes has you filled with apprehension, you may want to find a tax filing service to help you. The right service will not only take the pain out of filing your taxes, but it will also give you confidence by helping you understand the process. Different people will want different features from a tax filing service, but there are a few things you should always look for. For example, you want responsive technical support no matter how much you know about taxes. Below are six things you should look for when choosing a tax filing service.

Form Availability and Price

Depending on your tax situation, there will be certain tax forms you need in order to file your tax return. Make sure that whatever service you choose will allow you to file all the forms you need. Major filing services will have all the common forms, but there may be exceptions. For example, some services don’t allow you to file certain state income tax forms. There may also be other restrictions depending on where you live.

You will likely find that all the forms you need are available, but services will offer different forms only as part of paid plans. Make sure you can afford whichever plan you would need. For example, let’s say you need to file the Form 1040A. One service may allow you to file a 1040A and 1040EZ for free while another service may only include the 1040EZ in its free plan.

Technical Support

If you spent two hours filling out your tax return, the last thing you want is to lose everything because you clicked the wrong button. This is a situation where good technical comes in handy. Ideally you won’t need to contact technical support, but it’s good to have if you need it. Companies commonly offer technical support via online chat, email and/or phone.

Educational Content

Imagine that you’re filing your taxes when suddenly a message pops up saying that you cannot continue until you attach a form you’ve never heard of. You can look the form up online but it would be easiest if your filing service could explain to you (in understandable language) what the form is, why you need it and where you can get it.

The amount of educational content that you need will depend on how much you know about your taxes. If you’ve never filed taxes and barely know the basics, you may want user-friendly service like TurboTax that features well-written educational content. If you’ve been filing for years and your finances haven’t changed much since you filed last year, educational content may not be a necessity for you.

You should also keep in mind that this kind of content usually comes at a higher price. It’s part of why a service like TurboTax costs more than than a no-frills service like TaxAct.

Access to Tax Professionals

what to look for from a tax filing service

Even if you have a good grasp of your tax situation, sometimes it’s nice to talk with someone who understands the tax code inside and out. This is especially true when the tax code changes as it did when Republicans passed a new tax plan in 2017.

Not all services offer access to tax professionals and those that do, offer different degrees of access. There are filing services that allow you to speak with a professional via online chat or over the phone. This might be enough if you have a good idea what you’re doing but have just a few questions. There are also services that allow you to meet with a tax professional in person. This could be helpful if you have complex finances or if your tax situation has changed dramatically since you last filed.

Look for an Accuracy Guarantee

If you make an error or incorrect calculation on your tax return, the IRS could charge you a penalty. You will also need to submit an amended return (1040X). The last thing you want is to pay a penalty and do more work because your tax service made a mistake. An accuracy guarantee will protect you from that. If the filing service makes an error on your tax return, it will cover any penalties and interest that result from the error. It will also cover the cost for you to send in an amended tax return.

Get a Guarantee of the Highest Possible Refund

Many filers look forward to taxes only for the refund check. Because each tax filing service uses slightly different formulas and programs, the refund that one says you can get may not be the same as what another says you can get. That makes it handy to get a guarantee from your tax filer that no other service will offer you a larger refund after you file.

Imagine that you file your tax return with Company A and you get a refund of $500. Then you go through the filing process with Company B and it says that it can get you a refund of $600. You have missed out on $100. But if Company A offers a maximum refund guarantee, Company A will pay you the difference between the refund it got you and the refund that Company B says it can get you.

There are tax services, like TaxSlayer, that allow customers to start filing their taxes for free. You only need to pay when you actually submit the return. That allows you to see how much they expect your refund to be, without you spending any money (though you will have to create an account).

Yes, it is more work to go through the filing process with multiple tax filing services. However, that might be worth it if there’s the possibility that you can save a little money.

The Bottom Line

what to look for from a tax filing service

Finding a good tax filing service can help remove the anxiety around filing your taxes. As you search for the best service for you, there are some basic features you should look for. You’ll likely want to make sure you have access to good technical support, an accuracy guarantee and trustworthy educational content to explain the filing process as you move through it. Some filers will also want to work with a service that provides you access to tax professionals.

Tips for Getting Through Tax Season

  • You should always shop around when choosing a tax filing service. Talk to your friends about their experiences and read customer reviews online. We know this can be time-consuming, which is why SmartAsset has put in the work for you to find the best tax filing software.
  • Two important things to understand about your income taxes are tax credits vs. tax deductions. Deductions reduce your taxable income while credits reduce how much you owe. There are a number of both credits and deductions. Finding all the ones you qualify for could help you save significant money.
  • Speaking of saving, here’s an idea for what you can do with your tax refund: put it in a high-interest savings account. A savings account with a high annual percentage yield (APY) will make your money work for you instead of just sitting around.

Photo credit: ©, © Images Inc., ©

Derek Silva, CEPF® Derek Silva is determined to make personal finance accessible to everyone. He writes on a variety of personal finance topics for SmartAsset, serving as a retirement and credit card expert. Derek is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance® (CEPF®). He has a degree from the University of Massachusetts Amherst and has spent time as an English language teacher in the Portuguese autonomous region of the Azores. The message Derek hopes people take away from his writing is, “Don’t forget that money is just a tool to help you reach your goals and live the lifestyle you want.”
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