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 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. In fact, millions of taxpayers file on mobile devices through TurboTax. 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 three plans: Do-It-Yourself (DIY), Live Assisted and Live Full Service. 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 tax 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. TurboTax also guarantees that all calculations are accurate. If there’s an error, TurboTax will pay the penalty and interest fees.
TurboTax Do-It-Yourself (DIY)
TurboTax's DIY tier is traditionally the most popular option the company offers. Federal prices for it can range from $0 to $99, depending on the complexity of your tax situation. For state returns, prices vary from $0 up to $39. For instance, if you have many different types of income, claim a number of different credits, have multiple tax forms to enter, are self-employed or own a business, you'll pay more. But if you simply file a W-2, you'll likely qualify for a free service. In addition, if you qualify for a free federal return, your state return will also be free, unless you file with multiple states.
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, TurboTax will take a comprehensive look at 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 Live Assisted 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, as you'll pay an extra fee to access these professionals. 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 Live Assisted
Upgrading to TurboTax's Live Assisted service ensures you'll have around-the-clock access to a tax professional both during your filing and for the rest of the year. In fact, you'll be able to speak with your tax expert live on-screen and have all of your questions answered immediately. Beyond this extra level of service, your tax expert will personally review your return before it's sent off to the IRS. Again, TurboTax guarantees this review, or it'll cover your costs.
To gain access to TurboTax Live Assisted, you'll pay anywhere from $0 to $199 for a federal return and $0 to $49 for each state return. Again, if you qualify for a free return, you won't pay anything for your first state return.
TurboTax Live Full Service
As its name implies, TurboTax Full Service allows you to have a dedicated tax professional do and review your taxes for you. Depending on the specifics of your needs, TurboTax will pair you with an appropriate tax expert. Again, your expert will be available for you to talk to during the filing process, as well as for the rest of the year.
When you start this relationship, you'll securely upload all of the necessary tax documents to your expert, at which poin they'll take over the work. As they work on your return, you'll receive updates via TurboTax's online tracker. Then, once the tax return is complete, they'll review it with you and explain everything.
This highest level of service comes with an understandably hefty pricetag. For a federal returns, Live Full Service users will pay between $0 and $389. State returns will again cost between $0 and $49. If you qualify for a free return, your first state return will be free as well.
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 a few weeks.
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.
|Filing Options||Costs||Best for|
|Do-It-Yourself (DIY)||Federal: $0-$99, State: $0 - $39||Best for those who have simple returns to file and won't have questions for a tax expert|
|Live Assisted||Federal: $0-$199, State: $0 - $49||Best for those with more difficult tax situations who want the ability to ask questions of a tax expert|
|Live Full Service||Federal: $0-$389, State: $0 - $49||Best for those who want their taxes done entirely for them|
TurboTax offers three online filing options, targeted at different individuals based on their financial situations and needs. 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.
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||Do-It-Yourself (DIY), Live Assisted, Live Full Service||Do-It-Yourself (DIY): $0-$99, Live Assisted: $0-$199, Live Full Service: $0-$389||Do-It-Yourself (DIY): Up to $39, Live Assisted: Up to $49, Live Full Service: Up to $49|
|H&R Block||Free, Deluxe, Premium, Self-Employed||Free: $0, Deluxe: $29.99, Premium: $49.99, Self-Employed: $84.99||Free: $0, Deluxe: $36.99, Premium: $36.99, Self-Employed: $36.99|
|TaxAct||Free, Deluxe, Premier, Self-Employed||Free: $0, Deluxe: $24.95, Premier: $34.95, Self-Employed: $64.95||Free: $34.95, Deluxe: $44.95, Premier: $44.95, Self-Employed: $44.95|
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.
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
- Finding a qualified financial advisor who can help with your taxes doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- 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.