What is TurboTax?
Developed in the mid-1980s, TurboTax has grown to become one of the most popular tax preparation services out there. It’s owned by Intuit, a financial software company based in Mountain View, California, and it says it’s committed to helping people navigate through tax season. With millions of taxpayers filing with TurboTax annually, it’s safe to say that it’s a top choice.
With numerous online tax planning options, compatibility with different devices and the ability to save your filing process at any time, TurboTax is convenient. More than 1 million taxpayers file on mobile devices. Plus, with extensive support options to help you understand the complete process of tax filing, TurboTax is fit for both first-time and veteran filers. There are online tools, like a documents checklist and tax refund estimate calculator, to help you navigate through the process. There are tax tips and videos on its website as well. Plus, each plan comes with 24/7 support from TurboTax experts.
With a range of different plans and features fit for a variety of users, TurboTax is one of the most established tax planning services. Its extensive options, features and accessibility ensure that you’re getting the most out of tax season.
TurboTax's Filing Options
TurboTax offers numerous digital options to file your taxes. There are five plans: a free plan called Absolute Zero, Deluxe, Premier, Self-Employed and TurboTax Live. Each plan comes with a focus on user customization by using an interview approach. It asks simple questions about your life – career, dependents, charitable contributions – to figure out what information is needed and to help you get every credit you can get. There’s also step-by-step guidance to ensure that you understand every part of the process.
All TurboTax options also come with easy import. You’re able to take a picture of your W-2 to automatically import that information into the appropriate forms. And before you submit, you can run CompleteCheck, which ensures that your return is accurate and completely filled out. Along with 24/7 support from both TurboTax professionals and the general TurboTax community, you’re able to file your taxes quickly and efficiently.
The plans also come with a maximum refund guarantee. If you get a larger refund from another tax preparer, you’re entitled to a purchase refund of TurboTax services. It also guarantees that all calculations are accurate. If there’s an error, TurboTax will pay the penalty and interest fees.
TurboTax is dedicated to giving you a great user experience, while getting the most out of tax season. This efficient and extensive process ensures that tax season goes off without a hitch.
Absolute Zero: Free Option
The free option from TurboTax is aimed at those with simple tax returns. You can only file 1040EZ and 1040A with this option but there is no federal or state fee.
This option comes with ExplainWhy, which is a feature that explains why your refunds fluctuate with different factors. This gives you a greater understanding of why the final numbers are the way they are. There’s also CompleteCheck, which is a comprehensive review of your tax return before you file. This minimizes errors by ensuring that nothing is missed. This option also allows you to find tax-saving credits if you have dependents, like the Child & Dependent Care Credit.
With the ability to e-file both federal and state returns, the tax filing process is made easier. Plus, you can go at your own pace as your progress is saved as you continue.
The next option is the Deluxe option, which is TurboTax’s most popular plan. This option is dedicated to maximizing your tax deductions. It costs $39.99 for federal filing and $36.99 per state. Though more expensive, it comes with all the features of the Absolute Zero plan plus more.
TurboTax allows automatic import of last year’s tax return into this year’s to save time. You can also file your state return more quickly by transferring information from federal forms to state forms. You also get automatic import of W-2 and 1099 information.
Plus, there are additional features to ensure that you get the most deductions. TurboTax searches over 350 tax deductions and credits to help you get the biggest refund available. And the ItsDeductible tool tracks your charitable donations to find deductions there. This option is also helpful for homeowners, since you have access to Schedule A. Schedule A focuses on maximizing mortgage and property tax deductions. TurboTax Deluxe also gives you guidance through big life changes, like moving to another state, to determine how it’ll impact your taxes.
The Deluxe option is dedicated to getting you the most deductions without sacrificing convenience. And if you run into any questions, you have access to SmartLook. This connects you with live TurboTax experts. They guide you through the filing process by drawing on your screen.
The Premier option is targeted at those with investments or rental property. It costs $59.99 to file federal forms and $36.99 per state. This option includes all the features and forms of the previous plans. But it also covers stocks, bonds and other investment income. You can automatically import investment information for accurate sales reporting of stocks, bonds and mutual funds. TurboTax also calculates the cost basis of an investment, which determines the capital gain and loss on an investment.
The Premier option also handles rental property income and tax deductions. With TurboTax, you’re able to set up new rental properties, determine their market rent value and see how they affect your return. You can also report your rental property depreciation to get a large tax deduction, as well. In addition, you get retirement tax help to maximize your IRA savings. You can also refinance deductions with the Premier option to help save money
TurboTax’s Self-Employed option is best for independent contractors, freelancers and consultants. It deals with both personal and business income. It includes all the features of the previous options and costs $89.99 to file federal forms and $36.99 per state. Every tax form supported by TurboTax is available with this filing option.
When it comes to your business, TurboTax helps you stay on top of your expenses throughout the year with QuickBooks Self-Employed. This feature stores receipts and tracks miles traveled so the information remains organized. Come tax season, this information helps maximize business deductions. TurboTax also searches for deductions that you may qualify for, looking at industry specific deductions that may apply to your business.
If you’re a new business, you get an extra boost of help. TurboTax looks for start-up tax deductions for new businesses to ensure that you get the maximum refund. You’re also able to see your refund changing in real time based on the information you share. In addition, you can prepare employee tax forms.
TurboTax Live Option
The most expensive option, TurboTax Live, gives you access to a tax expert so that you can file with complete peace of mind. A TurboTax certified public accountant (CPA) or enrolled agent (EA) is available via chat to answer any questions you have while you file. One of those experts will also do a final review of your tax return before you file it. The expert help, plus all the features in the previous options, brings the cost of TurboTax Live to $149.99 for federal filing and $36.99 per state.
Refund and Payment Options
You can pay for TurboTax with credit, debit or prepaid cards. There’s also an option to deduct the purchase price from your federal refund, so you don’t have to pay out-of-pocket. But no check, money order or cash is accepted.
To receive your refund, you can directly deposit it into a checking, savings, brokerage or IRA account. You can also get it as a check or a NetSpend Premier Visa Prepaid Card. TurboTax also allows you to use the refund to buy U.S. savings bonds or apply it to next year’s taxes, which shows up as tax credit.
You can also track your refund if you file with TurboTax. You’ll receive notifications of when your return is accepted by the IRS. Once approved, it’ll take about 19 to 21 days for you to receive your refund.
Tax Audit Services
If you’re being audited, TurboTax offers the TurboTax Audit Support Guarantee. This gets you year-round audit support from a tax professional. You’ll receive one-on-one guidance, answers to your audit questions and help preparing for the audit.
Extensive Online Help and Tools
To make sure that you have a thorough understanding of the tax filing process, TurboTax offers free online tools to guide you through the process. This includes the TaxCaster Calculator, which estimates how much your tax return will be, a W-4 Withholding Calculator and a Tax Bracket Calculator.
TurboTax also shares online tax tips and videos that give you a greater understanding of how the service works and share useful information like money-saving tips and cities with the highest tax rates.
|TurboTax Absolute Zero Option||Federal: $0 State: $0||Best for simple 1040EZ and 1040A; Comes with easy import, error check, refund explanations, deductions for dependents|
|TurboTax Deluxe Option||Federal: $39.99 State: $36.99||Best for maximum deductions; Comes with all previous features, plus SmartLook, charitable donations calculator, easy storage and import|
|TurboTax Premier Option||Federal: $59.99 State: $36.99||Best for investors and rental property owners; Comes with all previous features, plus focus on investment and rental property income, accurate stock reporting, refinancing deductions|
|TurboTax Self-Employed Option||Federal: $89.99 State: $36.99||Best for self-employed, independent contractors, freelancers and consultants; Comes with all previous features, plus access to self-employment tax experts, maximizing business deductions|
|TurboTax Live Option||Federal: $149.99 State: $36.99||Best for filers who have complex finances and want expert advice; Comes with all previous features, plus access to tax experts|
TurboTax offers five online filing options, targeted at different individuals based on their financial backgrounds. All plans come with basic features, like easy W-2 import and a comprehensive review of your tax return before you file. They also all have a maximum refund guarantee to ensure that you get the most out of tax season. But the more expensive the plan, the more features are included.
For the 2017 tax season, TurboTax offers reduced prices for all filing options. State filing is reduced to $36.99 and all federal filing options are reduced by $20.
Who is Turbo Tax For?
TurboTax is one of the most popular tax planning services out there and with good reason. Its different plans are suited for a variety of filers, whether they’re students, homeowners or self-employed. TurboTax aims at educating users throughout the process with step-by-step guidance, while still securing the maximum returns and deductions available. It’s helpful for people whether they’re first-time filers or veteran filers.
What's the Catch?
TurboTax’s plans are more expensive than other tax planning services. Although it offers a free option, that option only applies to federal filing – you still have to pay for state returns. In addition, some features are only available with paid plans. For example, using your tax refund to cover TurboTax fees is only available with a paid plan. Plus, a useful feature like SmartLook is only available if you upgrade. This becomes is costly if you want to upgrade for these features, but your tax situation is simpler than the plan’s focus area
How TurboTax Stacks Up
|Tax Planner||Plans Offered||Costs (Federal)||Costs (State)|
|TurboTax||Free, Deluxe, Premier, Self-Employed, TurboTax Live||Free: $0 Deluxe: $39.99 Premier: $59.99 Self-Employed: $89.99 TurboTax Live: $149.99||Free: $0 Deluxe: $36.99 Premier: $36.99 Self-Employed: $36.99 TurboTax Live: $36.99|
|H&R Block||Free, Deluxe, Premium, Self-Employed||Free: $0 Deluxe: $34.99 Premium: $54.99 Self-Employed: $74.99||Free: $0 Deluxe: $36.99 Premium: $36.99 Self-Employed: $36.99|
|TaxAct||Free, Plus, Freelancer, Premium||Free: $0 Plus: $25 Freelancer: $39 Premium: $51||Free: $0 Plus: $37 Freelancer: $37 Premium: $37|
With TurboTax’s user-friendly interface, range of plans and helpful tools, it’s no wonder that it’s one of the most popular tax planning services. But it comes at a higher cost – other planners offer similar services at competitive prices
H&R Block has been around for over 60 years and is still a popular option for tax filing. At similar prices as TurboTax, it also has similar features like easy W-2 import, refund explanations and step-by-step guidance. Its online interface is also user-friendly. But H&R Block’s free option allows you to file a 1040 with Schedule A, 1040EZ and 1040A, while TurboTax’s free option is limited to 1040EZ and 1040A. H&R Block also has multiple physical offices around the world, while TurboTax is entirely digital. This means that if you prefer a more personal experience, you’re able to file in-office with a tax professional with H&R Block.
But TurboTax’s Self-Employed option makes it stand out. With H&R Block, if you’re self-employed, it suggests you use the Premium option. The Premium option isn’t entirely targeted at self-employed individuals, but includes useful tools for them. Meanwhile, TurboTax’s Self-Employed option focuses entirely on self-employed individuals and their specific needs. It’s pricier than H&R Block, but TurboTax allows you to track expenses and maximize both personal and business returns.
For the 2017 tax season, H&R Block offers reduced prices. The prices for filing federal forms were reduced by $20 for all filing options. The service also offers a 5% bonus if you put the tax refund on a gift card.
Another tax planning service is TaxAct. The most affordable out of the three, it isn’t as flashy as TurboTax and H&R Block but it gets the job done. Its interface is simpler than the other two, but TaxAct is a good option for straightforward filing. With TaxAct’s price lock guarantee, you pay the price listed when you create your return, regardless of when you file. But TaxAct doesn’t offer as many educational features and tools. It makes TaxAct a better option for people who have simple returns or a basic understanding of the tax filing process.
Like TurboTax, TaxAct offers free filing for simple 1040EZ and 1040A forms.
Bottom Line: Should you use TurboTax?
TurboTax’s range of filing options cater to different financial situations, whether you’re single, married, a homeowner or self-employed. There are extensive features included with each plan to maximize efficiency and transparency. You get easy information import, as well as explanations of why refunds fluctuate. There are also tax calculators, a tips section and SmartLook. It’s no wonder it’s one of the most used services.
But these features come at a higher price than other services. If you want something straightforward with less features, another tax planning service can likely do the job just fine.