TurboTax is one of the most popular tax filing services in the United States. It’s easy to use interface, intuitive process and its best in class deduction finder make it possible for nearly everyone to complete and file their own taxes.
Tax experts may be annoyed by the indirect method that TurboTax uses to get to deductions, credits, and income taxes owed, but average users will appreciate the reminders and explanations that TurboTax proffers throughout the tax process.
TurboTax Tax Prep Process
TurboTax features an intuitive user interface. The software prompts users to enter information about themselves and their income, and it gives cues that indicate information may come up later. For example, when I entered my husband’s occupation as “Student” TurboTax reminded me that we may qualify for certain education related deductions.
TurboTax moves users through their filings one section at a time, informing users of qualifying deductions and tax credits as they go along. Additionally, TurboTax allows users to choose a guided path or a self-exploration path.
I chose the guided path for the Business and Personal sections since I live in perpetual fear of missing something on my tax filing. More experienced filers will prefer the self-exploration mode that allows them to skip over unnecessary sections.
TurboTax eases the burden of data entry by enabling an import process for financial forms. Rather than manually entering W-2 and 1099-INT forms, TurboTax imported the necessary forms automatically. I loved how much this feature eliminated unnecessary tedium (most major employers, brokerages, and banks work with TurboTax to enable this feature). However, there may be forms you need to save, so make sure you keep financially organized year-round.
I manually entered charitable contributions and self-employment income which was straightforward though time consuming compared to the importing process. If you contribute to large enough charities you may be able to connect via an import process as well.
I appreciated the interface speed and that TurboTax automatically saved my entries. I found toggling between sections easy, and it was easy to jump back into the software after taking a break.
I could have worked through the process on my iPad, but I found that it was much quicker to work from my desktop. I found no unexpected website errors throughout the entire process.
What If I Get Confused?
TurboTax offers helpful pop-ups that explain why you did (or did not) qualify for a tax deduction or credit.
Additionally, TurboTax offers many “Learn More” options that helped clarify some of the more complex entries that I had to make.
Ultimately, I didn’t have any unanswered questions, but if I did, I could have used the online help forum, or I could have spoken with a representative from TurboTax’s call center. These are especially useful if you have questions about some of the more unique tax scenarios.
If you need to consult with a CPA, you must have paid subscription first.
TurboTax Plans and Pricing
Although its free to access the TurboTax software, filing with TurboTax usually requires paying a fee. TurboTax’s free filing service is limited to those who have very simple returns. For people with more complex filings, the fees range from $34.99-$79.99.
Home & Business Edition
TurboTax’s free filing works for anyone who has only W-2 income and child related deductions and credits. Free filers have access to TurboTax’s online chat and phone help features. The free filing service is spectacular if you have simple returns.
TurboTax Deluxe ($34.99) allows users to file itemized deductions (such as a mortgage, charitable giving or more), and it handles taxes and deductions on freelance income. The paid service also offers access to CPAs (via phone or chat) for tax advice. This is TurboTax’s most popular service, but it is more expensive than comparable tax preparation software.
Investors with brokerage accounts or rental properties require $54.99 TurboTax’s Premier edition. The premier edition properly calculates profits and losses for sold stocks or bonds during the year, and it provides deduction and depreciation help for real estate investors. As a newer real estate investor, I found the software incredibly helpful. However, the help comes at a price. Compared to similar software, TurboTax is among the highest price among its peers. It should also be noted that TurboTax has a limit on the number of brokerage transactions that can be imported, so very active day traders will not be able to use the software.
Self employed or small business owners will need to use the $79.99 Home and Business edition. The Home & Business edition offers help depreciating business assets, classifying expenses and maximizing deductions for business owners who either employ others or carry inventory. The home and business feature is one of TurboTax’s attracts a strong following of small business owners who manage to complete their taxes without the aid of a CPA.
Overall, TurboTax is one of the most expensive tax preparation software options. There free version is equivalent to the other free offerings, but all other tax software providers offer cheaper options. You can see the comparison between TurboTax, H&R Block, and TaxACT here.
The Final Verdict
TurboTax offers a best in class user interface, and remains committed to the excellent customer services. For users who crave simplicity in their DIY tax prep, TurboTax will remain the top choice. However, TurboTax’s higher than average price points are a turn off. If you have relatively straightforward tax filings (but don’t qualify for the free filing), you can find comparable software at better prices.
People with complex filings (including investors and small business owners) may find that TurboTax’s deduction and credit finder, and the easy to use interface is worth the extra price.
If you're interested in TurboTax, you can buy it directly from TurboTax here.
TurboTax 2016 Giveaway
To make tax season more fun, we're giving away two free copies of TurboTax Deluxe 2015.
You can enter below. The contest ends on January 15, 2016.
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