TurboTax is one of the most popular online tax software programs. Even if you haven’t used TurboTax before, chances are some of your family, friends, and coworkers do because it’s possibly the easiest way to file your taxes. In fact, 30 million people filed with TurboTax in 2016. If you still need to file your taxes this year and don’t know which tax software to use, this TurboTax review can help you decide.
And for the first time ever, you can potentially file your federal and state returns for free! In the past, your state tax return was still an additional fee.
TurboTax Online Products
This TurboTax review focuses exclusively on the online products. You can also download the TurboTax software or even purchase a TurboTax cd, which lets you file five federal e-files for free and potentially one state tax return. For most people, go with one of the TurboTax online products; it’ll be cheaper and easier.
TurboTax Free
Federal Cost: $0
State Cost: $0
For the first time ever, filing with TurboTax is completely free for your federal and state returns! In years past, your federal return was free but you still needed to pay $30+ for your state return.
To file for free, you must meet the following criteria:
- Only file 1040EZ or non-itemized 1040A
- Do not have to file a Schedule C, D, or E
- No 1099-MISC income
- Made less than $100,000
So if you claim the standard deduction–you don’t itemize— only have W-2 income and bank interest, and didn’t sell any investments or earn rental income…you’ll most likely be able to file for free. You can still use TurboTax Free if you qualify for the Earned Income Credit too.
Besides filing your taxes for free, TurboTax also lets you snap a picture of your W-2 to instantly import the data error-free. And if you filed your return with a different tax prep program last year, you can import your data to save time during this year’s filing process too.
If you need help, TurboTax Free offers live support to help you file your return error-free. You’ll need to pay extra to receive tax advice, but you can also access their extensive knowledge base articles for free and those should answer most of your questions.
TurboTax Deluxe
Federal Cost: $39.99
State Cost: $36.99
If you need to itemize–claim home mortgage interest, local and state taxes, charitable contributions–you will need to upgrade to TurboTax Deluxe. TurboTax will see if you qualify for more than 350 tax deductions including your paid mortgage interest and property taxes. The ItsDeductible tool can help you itemize charitable donations you made for items like clothing, cash, mutual fund investments, and charitable miles.
You can also use TurboTax Deluxe when you have simple self-employed deductions including:
- 1099-MISC Income
- Standard Vehicle Mileage
- Cell Phone
- Miscellaneous expenses less than $100
As with TurboTax Free, you will also enjoy the benefits of on-demand technical support via chat or phone and the TurboTax agent will draw on your screen to help you quickly identify the problem.
TurboTax Premier
Federal Cost: $59.99
State Cost: $36.99
If you sold any investments or earned rental property income last year, you’ll use TurboTax Premier to file your Schedules D and E. TurboTax can automatically calculate your cost basis for investment income and also help you find rental property deductions for rental depreciation, repairs, and refinancing your lending terms.
Even as a homeowner who refinanced their mortgage last year, TurboTax Premier can help you deduct points, appraisal fees, and more to lower your tax bill even further by seeing if you qualify for more than 400 deductions.
TurboTax Premier can also be used to file your basic self-employment expenses listed above in TurboTax Deluxe.
TurboTax Self-Employed
Federal Cost: $89.99
State Cost: $36.99
If you are self-employed or own a business, you’ll need to use TurboTax Self-Employed to file a Schedule C. By listing your individual industry, TurboTax can walk you through industry-specific deductions to optimize your tax situation. For example, a photographer is going to have different business expenses than a real estate agent or a rideshare driver.
You will also want to use TurboTax Self-Employed for these comprehensive expenses:
- Home office
- Office equipment
- Leased office space
- Non-vehicle travel
- Meals and entertainment
- Legal and professional fees
By logging your self-employment expenses with Intuit QuickBooks, you can directly import your data into TurboTax and save a bundle of time.
TurboTax Live
Federal Cost: $149.99
State Cost: $36.99
A new online option for TurboTax this year is TurboTax Live where you can have real-time access to a CPA or EA to offer tax advice and look at your screen side-by-side. This can be a good alternative if you still want the human touch for your tax return, but don’t want to pay the normal rates for an in-person consultation that can cost significantly more than $180 (combined federal and state return cost).
With this option, the CPA or EA will also review your return for any missed deductions, miscalculations, or potential audit flags before your return is submitted.
Using TurboTax
TurboTax is the easiest online tax prep software to use with its clean layout and sleek performance. You’ll be asked a series a questions beginning with you personal information, income, then your deductions. Afterwards, you’ll tie up any loose ends like your health care coverage and unique tax situations that can affect your return status. Once all of these questions have been answered, you’ll see your final tax return that will be submitted to the IRS and your state’s tax agency.
TurboTax is a user-friendly tax software, with award-winning support if you need help.
While you might try to save a few bucks by using a discount tax prep program, TurboTax is used by more than 30 million people every year for a reason; it’s easy to use and you know you’re getting the best refund possible.
Pros
- Free federal and state returns for non-itemized tax returns
- Very user-friendly
- On-demand tech support
- CPA or EA access for expert tax advice and review
- Easily upload last year’s return even if your didn’t file with TurboTax
Cons
- Other online tax prep programs are cheaper for complex returns
- Schedule C-EZ returns are not cheaper than a regular Schedule C
- Filing prices jump if you wait until the last minute (file before April to secure the lowest rate)
Summary
TurboTax is worth your consideration if you can file for free or you’re self-employed. They have the reputation for being a top-notch tax prep software for their easy-to-use interface. And, if you already use one of Intuit’s other products like QuickBooks or Quicken to track your finances, filling your taxes with TurboTax is even easier and quicker.
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