Get the most from your tax software

Keep a piece of paper or notepad handy to write down any questions you have. No matter how prepared you are, it seems you always need more information. Don't get stalled because you need your child-care provider's Social Security number. Add it to your list of questions and move on.

If you can't find a number you need, such as your property tax amount, enter last year's amount or an estimate. Today's tax software will allow you to mark your entry as an estimate and will remind you to recheck it before you file.

In fact, you can't file until you mark it as a final amount. Estimating substantial amounts rather than leaving fields blank helps you see how you're doing on your tax liability as you go along. And, marking them as estimates guarantees that you'll come back to them later.

After you've found answers to your questions and entered all your information, you are finally at the review section of the interviews. Most tax software has an additional section you must go through regardless of whether you used the interviews. The review section alerts you to things you should check again and tells you if you are missing required information. Certain information must be entered before you finish your return, while other information is required if you want to file electronically. You must also confirm that each estimate has been verified or corrected.

Double-check your work like the pros

Your tax return looks good, and you may even be happy with your refund or a small amount owed. Before you print and sign your return, however, there are a couple of ways you can help ensure the accuracy of your return.

Tax professionals often use a simple method to double-check their work. Here's how it works:

• Take the documents you used to prepare your return and, using adding machine tape or a spreadsheet program, add up all the income and subtract all the expenses.
• Make adjustments as necessary; for example, add back any portion of a deduction that is not allowed and subtract other deductions such as depreciation.
• Subtract your exemptions.

The result should equal your taxable income on your return. Nothing guarantees a perfect return, but matching the taxable income you expect to the taxable income on your return helps ensure that your return contains the information you intended it to.

If your total does not equal the taxable income on your return, take the documents you used to prepare your return and see if they show on your return as you expected. You'd be surprised how often something you entered doesn't end up on the return. Sometimes it's justified; for example, medical expenses must be quite substantial before you can deduct them. In fact, you can deduct only the expenses that exceed 7.5% of your adjusted gross income. If your adjusted gross income is $80,000, only the part of your out-of-pocket expenses that exceeds $6,000 is deductible.

In other cases, however, you may be entitled to a deduction that for one reason or another you aren't getting. Car mileage isn't the only expense for which you must answer myriad questions correctly to get the deduction. If your business has a loss, you must indicate that all your investment is "at risk" -- meaning you could lose your investment (assuming that is true) -- to deduct your loss. If you have a loss from residential rental real estate, the correct box must be checked, or you won't be able to use it to offset other income, such as your wages.

Tax software can make preparing your return relatively easy -- at least compared with the old pencil-and-paper method. The printed result looks a lot neater, too. But the official-looking result can hide missed deductions and other errors. Examine it carefully when you are done. Like the pros, take the time to make sure your finished tax return gives you all the breaks you are entitled to.

Updated Jan. 28, 2008

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