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 most popular, with millions of annual users. Here’s a full review of everything TurboTax has to offer.
Which TurboTax Do I Need?
TurboTax offers five levels of tax preparation and filing services, including TurboTax Federal Free Edition, TurboTax Deluxe Edition, TurboTax Premium Edition and the TurboTax Home and Business Edition, as well as the TurboTax Plus add-on service. Below is a look at the various editions, along with what they offer to help you determine which of the TurboTax plans is right for you.
(TurboTax Website: for more information on all of these options.)
The TurboTax Federal Free Edition is specifically for those taxpayers with basic tax returns. It can handle both 1040EZ federal tax returns and simple 1040A tax returns that don’t include any type of 1099-MISC income. It does handle Earned Income Credit and Affordable Care Act credits and deductions. With this edition, you can prepare, file and print both your federal and state income tax returns. You also can have your W-2 form automatically imported into your tax return, when available. In addition, you can use most of the 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 absolutely 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, such as data transfers from the previous year’s tax records, live TurboTax 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 $29.99 for federal taxes and $36.99 for state taxes.
Is TurboTax Plus Worth It? It depends on your specific situation. If you want the convenience of having your previous year’s information, such as your name, address and workplace, automatically transferred to the new year’s forms, or you want to have the ability to access your prior year’s tax returns at a later date, 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, want to deduct charitable donations, have some types of 1099-MISC income or need a basic Schedule C completed can use the deluxe edition.
This edition comes with everything that is included in the free version, plus live online professional support, a complete search for more than 350 different tax credits and deductibles, personalized analysis report, prior year’s stored tax data and automated transfers of prior year’s data.
TurboTax Deluxe Cost: TurboTax Deluxe costs $34.99 for federal income tax filing and $36.99 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 can handle 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.
TurboTax Premier Cost: The cost of TurboTax Premier Edition is $54.99 for federal tax preparation and filing and $36.99 for state tax filing and preparation
The TurboTax Home and Business Edition is for those taxpayers who are self-employed or those who run a small home business. This edition helps self-employed taxpayers find deductible business expenses that they might not have known about and 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. 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 $89.99 for federal tax returns and $36.99 for state tax returns.
Is TurboTax Worth It?
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 could penalize you for filing inaccurate tax forms. This makes it very important to get professional help when completing your federal and state tax forms. While you could use a local accounting and tax preparation agency, 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. TurboTax 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, as well as an add-on Audit Defense services, it is worth the peace of mind to get TurboTax to complete your tax returns.
Common TurboTax Reviews
With millions of online users, TurboTax has had plenty of reviews over the years in the following areas.
- User-Friendliness — TurboTax is continuously ranked as one of the most user-friendly tax preparation software packages available online. The program guides users through a series of easy-to-follow steps, which requires answering a variety of tax-related questions.
- Accuracy — TurboTax guarantees the accuracy of all calculations on your tax return. If any calculation errors are discovered by the IRS, TurboTax will pay any type of penalty, along with interest. In addition, TurboTax checks for more than 350 various deductions and credits and therefore also guarantees that they will help you get the largest refund possible.
- Value — While TurboTax does cost a little more than some other online tax preparation software services, their user-friendly, fast and accurate program provides a smoother and more efficient tax preparation process. For many taxpayers, this added benefit is well worth the extra costs.
- Support — TurboTax offers multiple support service options, including the TurboTax AnswerXchange question and answer database, explanation pop-up windows and SmartLook, the TurboTax live chat service. They also offer expert phone support from 5 a.m. to 9 p.m. (PST).
- Military Discount — TurboTax rewards active duty members of the military by offering a minimum of a $5 credit off the costs of their tax preparation and filing service.
TurboTax App Review: TurboTax now allows taxpayers to complete and file their federal and state tax return with their mobile phone or other mobile device. One of the most convenient features offered by the TurboTax app is the W-2 capture. This features allows you to take a picture of your W-2 in order to automatically enter the data into your tax return, saving you time and ensuring 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 TurboTax service even if they don’t have a home computer or laptop.
How to Use TurboTax
TurboTax is extremely user-friendly. The first step is to set up an account. You will then be asked to answer a few questions about you and your family. Based on this information, TurboTax will recommend the tax preparation edition level that is right for your situation. TurboTax will then take 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 will store your information as it is entered, so you can stop and come back later to complete the forms as often as needed.
Once you have entered all this information, the TurboTax software will indicate that you are ready to submit your tax return to the IRS. You will have the opportunity to recheck your entire return, as well as all applicable schedules and worksheets to ensure accuracy. You also will know exactly what your income tax refund is or what the amount you owe is. You will be prompted to enter your bank information if you want your refund to be directly deposited into your account. Likewise, you will have to put in your payment information if a payment is required.