Developed in the mid-1980s, TurboTax has grown to become one of the most popular tax preparation services. Owned by Intuit, a financial software company based in Mountain View, California, TurboTax 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 , TurboTax is fit for both first-time and veteran filers. There are online tools, like a document checklist and tax refund estimate calculator, to help you navigate through the process. There are tax tips and videos on its website as well. If you have a more complicated return or if you just want the advice of a tax professional, TurboTax Live also allows you to chat with an expert.
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 four plans: the Free Edition, Deluxe, Premier and Self-Employed. Each plan comes with a focus on user customization by using an interview-style 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 deduction and credit you can get. There’s also step-by-step guidance to ensure that you understand every part of the process.
All TurboTax options allow you to easily import necessary documents. For example, you can take a picture of your W-2 to automatically import that information into the appropriate forms. It’s also easy to import your tax return from last year, even if you used a different filing service last year. And before you submit your tax return, you can run CompleteCheck, which ensures that your return is accurate and complete. 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 refund of your purchase from TurboTax. (Customers filing with the free option would receive $14.99.) TurboTax also guarantees that all calculations are accurate. If there’s an error, TurboTax will pay the penalty and interest fees.
Get your maximum refund, guaranteed with TurboTax.
TurboTax Free Edition
The Free Edition from TurboTax allows you to file a federal tax return and one state tax return for free. It’s aimed at those with simple tax returns. This includes people filing Form 1040 and taking the standard deduction, with a limited number of other forms, schedules or deductions. (Keep in mind that for the 2018 tax year, Forms 1040-A and 1040-EZ have been eliminated.)
As with all the digital filing options from TurboTax, you can import last year’s tax return into this year’s to help you save time. Import is also available if you used a different filing service last year. You also get automatic import of W-2 and 1099 information.
Outside of the standard Form 1040, TurboTax’s Free Edition allows you to file the following:
- Form 1040-ES (estimated taxes)
- Form 1040-X (amended returns)
- Form 1095-A (health insurance marketplace statement)
- 1099-DIV (dividends and distribution income)
- 1099-INT (interest income)
- 1099-R (retirement distributions)
- Schedule EIC (earned income tax credit)
- Schedule 8812 (additional child tax credit)
This list is not comprehensive. If you need to attach a specific form, it’s best to check the TurboTax website to see which plan you should use.
Before you file your tax return, you can also use TurboTax’s CompleteCheck, which is a comprehensive review of your tax return, to minimize errors and ensure that you didn’t miss anything.
If you would like additional peace of mind, you can upgrade from the Free Edition to TurboTax’s Basic Live option. Basic Live allows you to talk with a tax professional - either a certified public accountant (CPA) or enrolled agent (EA) - who will review your return to guarantee it’s done correctly. The expert is also available to answer any questions you have.
However, Basic Live is not free. It costs $49.99 to file a federal return and $29.99 per state return. For many people who qualify to file a free return, this cost isn’t necessarily worth it, but it can provide you with peace of mind that you’ve done everything correctly.
TurboTax’s most popular filing option is TurboTax Deluxe. Most filers who do not qualify for free filing will likely use Deluxe. This option is dedicated to maximizing your tax deductions and credits. It costs $39.99 for federal filing and $39.99 per state. It comes with all the features of the Free Edition, plus it allows you to attach more forms and claim most common deductions.
According to TurboTax, it 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.
TurboTax Deluxe is also helpful for homeowners, since you have access to Schedule A. Schedule A, which allows you to itemize deductions, 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.
If you prefer talking with a human about your taxes, consider upgrading to the Deluxe Live option. The cost rises further here, at $89.99 for your federal return and $39.99 per state. The benefit is that you can have a conversation with someone about which deductions you can and should claim. Not sure is you should itemize or take the standard deduction? Talking to someone may help.
Of course, if you want some financial guidance outside of just tax time, you can get that by talking with a financial advisor. Financial advisors are experts who can advise you on more than just your taxes. They can help you to save for retirement, invest, buy a home or just get through a life transition like a marriage or the birth of a child.
The Premier option is targeted at those with investments or rental property. It costs $59.99 to file federal forms and $39.99 per state. This option includes all the features and forms of the previous two plans. It also covers trust and estate income, as well as income from stocks, bonds and other investments. You can automatically import investment information for accurate sales reporting. 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.
For an additional $80 ($139.99 for federal filing and $39.99 per state) you can upgrade to the Premier Live option and work with a CPA or EA.
TurboTax’s Self-Employed option is best for independent contractors, freelancers, consultants and business owners. It offers the forms and deductions necessary for those who have personal or business income. It includes all the features of the previous options at a cost of $89.99 to file federal forms and $39.99 per state. Every tax form supported by TurboTax is available with this filing option.
When it comes to your business, TurboTax also helps you stay on top of your expenses throughout the year. Filing with this option (or with TurboTax Self-Employed Live) grants you a complimentary one-year subscription to QuickBooks Self-Employed. This feature stores receipts and tracks miles traveled throughout the year so the information remains organized. Come tax season, this information helps maximize business deductions. TurboTax also searches for industry specific deductions that you may qualify for, based on 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 can also see your refund changing in real time based on the information you share. In addition, you can prepare employee tax forms.
As alluded to above, there is also a Self-Employed Live filing option. While TurboTax is very user-friendly and does the hard work of finding deductions that you qualify for, taxes can still be confusing. This is especially true if you’re a new business owner or newly self-employed. In that case, you may want to talk with a tax professional. The Self-Employed Live option costs $169.99 for federal filing and $39.99 for each state return.
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. Checks, money orders and cash are not 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 on a prepaid Visa debit 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 notification when your return is accepted by the IRS. Once approved, you can usually expect your refund within 21 days.
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.
As mentioned above, TurboTax provides access to financial experts through its Live filing options. This is not the first year the company has offered access to live professionals, but this year’s options are the most extensive yet. There are four Live options, corresponding to the four digital filing options, with prices ranging from $49.99 up to $169.99 for filing a federal return and $29.99 to $39.99 for state returns.
|TurboTax Free Edition||Federal: $0 State: $0||Best for simple returns using Form 1040; Comes with easy import, error check, refund explanations, deductions for dependents|
|TurboTax Deluxe||Federal: $39.99 State: $39.99||Best for homeowners and for maximizing deductions; Comes with all previous features, plus charitable donations calculator|
|TurboTax Premier||Federal: $59.99 State: $39.99||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||Federal: $89.99 State: $39.99||Best for self-employed, independent contractors, freelancers, consultants and small business owners; Comes with all previous features, plus access to self-employment tax experts, maximizing business deductions|
TurboTax offers four 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 2018 tax season, which is what you file in early 2019, TurboTax has factored in all the changes that resulted from the new tax code.
Who Is TurboTax 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-timers or veteran filers.
What's the Catch?
TurboTax’s plans are more expensive than other tax planning services. Although it offers a free option, only the most basic returns qualify. Some features (and most tax forms) are only available with paid plans. This can become costly if you want to upgrade for certain forms or 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||Free: $0 Deluxe: $39.99 Premier: $59.99 Self-Employed: $89.99||Free: $0 Deluxe: $39.99 Premier: $39.99 Self-Employed: $39.99|
|H&R Block||Free, Deluxe, Premium, Self-Employed, Tax Pro Review||Free: $0 Deluxe: $29.99 Premium: $49.99 Self-Employed: $79.99 Tax Pro Review: $119.99||Free: $0 Deluxe: $36.99 Premium: $36.99 Self-Employed: $36.99 Tax Pro Review: $36.99|
|TaxAct||Free, Basic+, Deluxe+, Premier+, Self Employed+||Free: $0 Basic+: $9.95 Deluxe+: $29.95 Premier+: $34.95 Self Employed+: $49.95||Free: $0 Basic+: $19.95 Deluxe+: $39.95 Premier+: $39.95 Self Employed+: $39.95|
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 filing services. But it comes at a higher cost, and other programs offer similar services at lower prices.
H&R Block has been around for over 60 years and is still a popular option for tax filing. With prices that are similar to (but slightly lower than) TurboTax’s, it also has similar features like easy W-2 import, refund explanations and step-by-step guidance. Its online interface is also user-friendly. In terms of supported forms, the free versions are nearly the same between H&R Block and TurboTax. You can file simple returns for free but will need to upgrade to a paid version if you want to itemize, or want to claim deductions beyond the earned income tax credit.
One advantage with H&R Block is that it has multiple physical offices around the world. If you want to work with a tax preparer in person, you can do so. TurboTax offers its suite of Live filing options, but these still take place online instead of in-person.
But TurboTax’s Self-Employed service does stand out from H&R Block’s. The premium and Self-Employed options from H&R Block overlap a bit and the Self-Employed option doesn’t necessarily provide many features that cater solely to small business owners. For example, Self-Employed is the only H&R Block option that includes a free double check of your return by a tax professional. This is useful for anyone with a slightly complicated tax return, not just for self-employed filers. On the other hand, TurboTax’s Self-Employed option focuses on providing guidance, advice and deductions to people who are contractors, freelancers or business owners. Included is also a complimentary year of QuickBooks Self-Employed. This version of QuickBooks, which costs more than $100 if you buy it separately, helps you keep track of personal and business expenses throughout the year. It also helps you to calculate estimated tax payments.
Another popular tax filing service is TaxAct. The most affordable out of the three, it isn’t as flashy as TurboTax or H&R Block but it gets the job done. Its interface is simpler than the other two. The interview-style approach to filing isn’t as quite as smooth and it doesn’t offer as many educational features or tools. However, TaxAct is a good option for straightforward filing. It’s also nice if you don’t mind doing a bit of your own research to understand whether or not you qualify for certain deductions, and to understand what those deductions are to begin with. Thanks to the number of online resources, doing some work yourself isn’t nearly as difficult as it used to be.
The forms included with each of TaxAct’s filing options are very similar to TurboTax and H&R Block’s. The options are simply cheaper.
Bottom Line: Should You Use TurboTax?
TurboTax’s range of filing options caters 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. It’s easy to import information and there are explanations of why and how refunds fluctuate. There are also tax calculators, a tips section and access to other services, like QuickBooks. All in all, TurboTax is very user-friendly and does a great job of simplifying tax season.
TurboTax comes at a higher price than other services but it pays for itself if it gets you additional tax savings. If you want something straightforward with fewer features, another tax planning service can likely do the job just fine. For example, someone who has been filing for years and doesn’t mind manually inputting information into a tax form may want to go with a cheaper option.
Tips for Getting Through Tax Season
- Filing taxes can get confusing, especially if you have a complicated tax situation. If you’re unsure how to file your taxes, talk to a financial advisor who specializes in taxes. An advisor can help you navigate the intricacies of the tax code and maximize your refund. An advisor can also help you plan and order your finances so that next year it’s as easy as possible for you to file.
- After you file federal income tax return, you will probably need to file a state return. State governments have their own systems for handling tax returns and that means processing times vary by state. Learn how to check your state tax refund status.
- If you find that you’re relying on a tax refund to make ends meet, you may want to make some changes to your tax withholding. By claiming more allowances on your W-4, you can decrease how much your employer removes (withholds) from your paychecks. That means more take home pay and perhaps less reliance on your refund.