If you’ve done taxes on your own, you’ve probably felt tempted to buy TurboTax Tax Preparation Software.
The software ranks as a top consumer tax software, and for good reason. TurboTax is easy to use, easy to navigate, and accurate. Year in and year out, TurboTax delivers great software, and 2016 is no different. Yes, TurboTax has Cadillac pricing, but the software delivers real value.
However, if you qualify for free filing, TurboTax is the best choice because it's great software for FREE.
If you’re considering a tax software this year to DIY your taxes, put TurboTax on the short list. Here’s why.
Watch The TurboTax 2016 Video Review
TurboTax Tax Prep Process
The TurboTax preparation process is second to none. In previous years, H&R Block and TaxAct rivaled TurboTax for simplicity. This year TurboTax is the clear winner. Users can choose between Semi-guided or interview style routes.
No matter what route you choose, TurboTax offers recommendations that may save you some money. The software catches mistakes and doesn’t allow you to move on until you’ve fixed them.
TurboTax allows you to import most of the major forms. This includes W-2 forms, 1099 forms and schedules created in Quicken. This is a huge advantage for real estate investors and small business owners who already use Intuit software packages. Even if you’re not a rabid Intuit fan, the import feature is a huge boon to time savings.
Throughout the tax preparation process, TurboTax uses a funnel approach to tax filing. The software presents a “high level” question; if it’s relevant, you answer more questions. This is an intuitive process that helps novices and old-timers alike.
My only complaint with this style is that you have to complete a funnel before you can move elsewhere in the software.
When it comes to more complicated filing situations, TurboTax maintains flexibility without being overwhelming. For example, TurboTax auto-populates depreciation and amortization. But the software enables you to choose different schedules.
Even better, TurboTax brought back the This Year/Last Year comparison. This feature compares how your income and expenses stacked up against last year. As someone who constantly second-guesses my accuracy, I loved this feature.
What If I Get Confused?
In the Art of War, Sun Tzu wrote, “The best victory is the one which requires no fighting.” That seems to be TurboTax’s philosophy too. As obscure as the tax code is, TurboTax’s unique interview style system makes it easy.
TurboTax offers “Learn More” articles with each question and sub-question. If you’re not sure whether a question applies to you, read the article. Every article that I read impressed me with simple and accurate information.
If you’re confused about tax law, paying customers can connect with a Tax Expert via an innovative chat feature. Tax Experts actually share screens with you and can show you how to put their advice in place. Another great feature about TurboTax is the AnswerXchange. You can check this moderated forum for advice on how to best use the TurboTax software.
Finally, if you need the help, you can buy “Max Assist & Defend.” This upgrade gives you priority email and chat assistance (great for those who file at the start of April), and a guarantee of expert Audit Assistance.
TurboTax 2016 Pricing And Plans
** As a side note, everything below is based on the list price. You may be able to find a better deal on sites like Amazon. We've noticed that Amazon has exclusive TurboTax pricing.
TurboTax (online) has four pricing tiers this year. The Federal Free Edition allows 1040EZ or 1040A filers to file Federal and State returns for free. This level does not come with expert tax support.
Each of the next three tiers require payment. In addition to paying for the software, users have the option to pay $59.99 for “Max Assist and Defend.” This is an insurance policy that gives you free professional help if you’re audited, and it gives you priority expert support. Like all insurance products, the value of this plan depends on your needs. People with small businesses or large real estate investments may consider it a small price to pay for peace of mind. Most others will consider it as valuable as flushing two Jacksons down the toilet.
The Deluxe pricing plan allows you to itemize deductions, find all tax credits, and speak with an expert. This includes information about the Premium Tax Credit for the Affordable Care Act. It costs $34.99 for Federal filing and $36.99 for state filing.
The Premier pricing plan is for investors including stock traders and real estate owners. This plan covers everything except Schedule C for self-employment. This plan costs $54.99 for Federal and $36.99 for state filing.
This year TurboTax introduced the Self-Employed tier. Side hustlers and small business owners alike will need to pay $89.99 for Federal filing and $36.99 for state filing. At this level, TurboTax provides unparalleled help in figuring out deductible expenses for self-employed people.
$34.99 Federal + $36.99 State
$54.99 Federal + $36.99 State
$89.99 Federal + $36.99 State
Anyone filing at 1040EZ or 1040A
Best for homeowners and others who itemize
Best for investors and real estate rental owners
Best for side hustlers, freelancers, and self-employed individuals
In terms of usability, and interface, TurboTax is the clear winner this year. But this functionality comes with a high price tag. Only people who will use the functionality should consider purchasing TurboTax this year.
If you're a basic filer and know you will file a 1040EZ or 1040A, this is the best option for the price. You can't beat $0.
Basic filers (those with 1040EZ or 1040A) may miss out on Tax Credits by using the Federal Free Filing, though, so if you don't know if you qualify for free filing, check out other options. If that’s you, consider TaxAct instead. Likewise, people looking to itemize should consider lower cost software such as Free Tax USA or TaxAct.
Stock and options traders, side hustlers, small business owners, real estate investors, and self employed people should consider purchasing TurboTax. Despite the high price tag, the functionality might be worth it.
If the high price tag is too much to swallow, consider Tax Act or Free Tax USA for high quality at a low cost.
The bottom line is that TurboTax is a good option for people who need an easy interface and help. Otherwise, the price point is too high compared to other options. Start your taxes for free with TurboTax Online 2016.
Do you use TurboTax?