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TurboTax is an online software package that offers specialized federal and state tax preparation services. While there are many tax preparation services online, TurboTax is among one of the best tax services, with millions of annual users. Here’s a full Turbo Tax review so you can see how it compares to other tax preparation services.
TurboTax offers four levels of tax preparation and filing services. These include TurboTax Federal Free Edition, TurboTax Deluxe Edition, TurboTax Premier Edition and the TurboTax Home and Business Edition. There’s also the TurboTax Plus add-on service. In the next section of our Turbo Tax review is a look at the various editions. Review what each one offers to help you decide which edition is right for you.
(TurboTax Website: for more information on all of these options.)
The TurboTax Federal Free Edition targets those taxpayers with basic tax returns. It handles both 1040EZ federal tax returns and simple 1040A tax returns that don’t include any type of 1099-MISC income. This edition does handle Earned Income Credit and Affordable Care Act credits and deductions. You’re also able to claim child tax credits with Free Edition.
This edition lets you prepare, file and print both your federal and state income tax returns. It also imports your W-2 form automatically into your tax return when available. It also offers a variety of online self-help tools, including the AnswerXchange service.
TurboTax Free Cost: If you qualify for the TurboTax Federal Free Edition, you will incur no fee to prepare, print or file your federal or state tax return. This service is free of charge.
TurboTax Plus is not a service level, but rather an add-on package that is exclusively available for those using the TurboTax Federal Free Edition. This extra package provides several benefits, including data transfers from the previous year’s tax records. You also get live chat support, tax return storage and a personalized analysis report, that are not provided with the free edition.
TurboTax Plus Cost: The cost to upgrade to the TurboTax Plus add-on is $29 for federal taxes and $49 for state taxes.
Is TurboTax Plus Worth It? It depends on your specific situation. Plus provides the convenience of having your previous year’s information automatically transferred to the new year’s forms. It also lets you access your prior year’s tax returns at a later date. If these capabilities are important to you, then the extra cost may be worth it.
TurboTax Deluxe is ideal for those taxpayers who have a slightly more complicated tax return, but who don’t have financial investments, rental properties or operate a small business. Those taxpayers that own a home, itemize their deductions or want to deduct charitable donations should use the deluxe edition. It’s also useful if you have some types of 1099-MISC income or need a basic Schedule C completed
This edition comes with everything that is included in the free version, plus live online professional support. It even includes a complete search for more than 350 different tax credits to help you maximize your refund. You’ll also receive personalized analysis reports, the prior year’s stored tax data and automated transfers of the prior year’s data.
TurboTax Deluxe Cost: TurboTax Deluxe costs $59 for federal income tax filing and $49 for state income tax filing.
TurboTax Premier Edition is ideal for taxpayers with rental income and/or major investments, such as bonds, stocks and ESPP. This tax preparation edition handles the completion of Schedule B, D and E. Users get the same services that come with the deluxe edition, as well as the automatic importing of investments option. The Premier level also searches 450 deductions to help you minimize your tax liability.
TurboTax Premier Cost: The cost of TurboTax Premier Edition is $89 for federal tax preparation and filing and $49 for state tax filing and preparation.
The TurboTax Home and Business Edition is for those taxpayers who run a small home business or have a side hustle. This edition helps self-employed taxpayers find deductible business expenses that they might not have known about. It can be integrated completely with QuickBooks Self Employment for easy mileage and expense tracking. The TurboTax Self Employed Edition helps taxpayers complete Schedule C to ensure maximum business expense deductions. Also, the TurboTax 1099 MISC service allows self-employed taxpayers to enter all types of income.
TurboTax Home and Business Cost: The TurboTax Home and Business Edition costs $119 for federal tax returns and $49 for state tax returns.
Personal and business tax preparation is a very complex and cumbersome process. Missing just one credit or deduction could cost you hundreds or thousands of dollars. In addition, the IRS penalizes you for filing inaccurate tax forms. This makes it very important to get professional help when completing your federal and state tax forms. You could, of course, use a local filing service. However, filing your taxes online lets you complete the entire process from the comfort of your own home and at a time that is most convenient for you.
There are many tax preparation services online, but few have the experience and reputation that TurboTax does. The company has been helping taxpayers complete their tax forms since the 1980s and their software is developed by tax preparation professionals. Since they guarantee accuracy and offer free audit support, it is worth the peace of mind to get TurboTax to complete your tax returns.
With millions of online users, TurboTax has had plenty of reviews over the years. Here are a few of the common factors that you will find in the average Turbo Tax review:
TurboTax now allows taxpayers to complete and file their federal and state tax returns with their mobile phone or another mobile device. One of the most convenient features offered by the TurboTax app is the W-2 capture. The feature lets you take a picture of your W-2 to automatically enter the data into your tax return. This saves you time and ensures accuracy.
Mobile users state that the TurboTax app is quick, efficient and easy to use. If you cannot complete your tax return in one sitting, the mobile app will save all your information so you can come back later to complete it. This allows people to use the tax preparation service even if they don’t have a home computer or laptop.
The first step in using TurboTax is to set up an account. You will then be asked to answer a few questions about yourself and your family. Based on this information, TurboTax recommends the tax preparation edition level that is right for your situation. The software then takes you through another series of questions. You will be self-guided through step-by-step instructions to help you complete the entire tax preparation process. TurboTax stores your information as it is entered, so you can stop and come back later to complete the forms as often as needed.
Once you enter all this information, the TurboTax software will indicate that you are ready to submit your tax return to the IRS. You have a final opportunity to recheck your entire return, as well as all applicable schedules and worksheets to ensure accuracy. Also, you’ll know exactly what your income tax refund is or what the amount you owe is. TurboTax prompts you to enter your bank information if you want your refund to be directly deposited into your account. Likewise, you have to put in your payment information if a payment is required.
Users know TurboTax for its user-friendly experience. From the beginning of the onboarding process, the software works to personalize every step of the way. Once you purchase the software and start the process, you’ll follow a question-and-answer format. Even if you don’t know anything about income tax preparation, the program guides you through the process one step at a time.
The questions that TurboTax asks are easy to answer, while grouped around general tax topics. Overall, it focuses on the goal of the processes rather than the task by automating and simplifying as much as possible. For example, the process begins with some basic information about your employment and family size. From there, the questions become more substantial. Most questions are fill-in-the-blank format, keeping the process easy and streamlined. You’re even able to upload copies of your tax documents to be scanned rather than be filled out.
Another bonus is that it offers users insight into how much of the preparation they’ve completed by including a progress bar.