TurboTax is one of the best known and widely used tax preparation software programs — and with good reason. It's user-friendly, walks you through filing out all your forms, and it actually makes filing and paying taxes simple.
But all of this convenience can come at a cost as Turbotax tends to be more expensive than many competitors if you need to do anything beyond file a 1040 form, such as filing a business tax return. You may find that it's worth paying a premium for all the features it offers, though. This TurboTax review will help you decide.
TurboTax is owned by Intuit, which also offers other well-known financial software including Mint and Quickbooks. According to the company, which was founded all the way back in 1983, its mission is "powering prosperity around the world."
TurboTax has become a well-established brand over the three decades it's helped people do taxes and is now the best-selling tax software provider in America. Tax-filers trust it because of its long history but also because it provides multiple guarantees.
It not only guarantees it's calculations are 100% accurate so you can avoid some common tax mistakes, but it also promises to maximize your refund. If another tax prep method gets you more money back, it'll refund what you paid for the software or give you $30 if you used the TurboTax free edition.
How much does TurboTax cost: Products and prices
TurboTax offers the chance to use its software and file for free, but only if your return is very simple and you're claiming the standard deduction. If you hope to claim any other deductions — including a deduction for student loan interest or contributions to retirement accounts or health savings accounts — you'll need to upgrade to its costlier Deluxe product.
For those whose returns are even more complicated because of business expenses, rental properties, or investment income, the price climbs very quickly. TurboTax also charges a fee of $40 per state return (unless you're using the free edition) so the program gets even more expensive if you live or work in one or more states that imposes a personal income tax.
If you find taxes confusing and want a CPA to review your return, you can opt to pay an additional premium for live support. You'll get on-demand access to an accountant or enrolled agent who can you talk to right from your computer screen. You can ask as many questions as you want while going through the process, including having the expert do a line-by-line review of your return. While this is a great feature for those who are nervous about getting everything done right, the cost is about double, depending which product you've chosen.
The table below shows the price of your options so you can see how much you'd have to pay based on the type of return you need to file and the level of support you'll require.
|Free Edition||$0||Taxpayers with very simple returns who want to file state and federal and state taxes for free|
|Live Basic||$50 + $40 per state||Taxpayers with simple returns who want a CPA to review their return|
|Deluxe||$40 + $40 per state
$90 + $40 per state for Live Deluxe
|Taxpayers with deductions including the student loan interest deduction|
|Premier||$70 + $40 per state
$140 + $40 per state for Live Premier
|Taxpayers with investments or rental property|
|Self-Employed||$90 + $40 per state
$170 + $40 per state for Live Self-Employed
|Taxpayers with business income or business expenses|
How does TurboTax work?
TurboTax prides itself on making taxes as simple as possible and its user-friendly interface achieves this objective. The program guides you through completing your return by asking you basic questions about your life in simple, plain language. Based on your answers, the program not only fills out your tax forms for you but also helps you identify deductions and credits you're entitled to. Its database of more than 350 deductions ensures you won't miss any chance to save on your taxes.
Completing your forms is also incredibly simple thanks to the fact TurboTax allows you to take a picture of your W-2. The program uses the information from your picture to autofill your tax forms.
If you need a little extra help, you can talk to a CPA or Enrolled Agent on demand. And once your forms are complete, you have the option to have everything checked over by an actual CPA. While this live support costs a little more than if you do everything yourself without help, you'll likely still pay less than if you hired an accountant on your own.
Best of all, you don't have to stress over errors, as TurboTax offers both a guarantee that the math is done properly and a guarantee that you'll qualify for the maximum deductions and credits.
If you're charged a penalty because TurboTax made a math error, your penalty and interest will be paid. And you'll be refunded for the price of the program or given $30 if you used the free edition and another tax prep program got you a bigger refund.
TurboTax pros and cons
There are a few major pros of using TurboTax, including the following benefits:
- The company's user-friendly interface. Doing your taxes is both quick and easy thanks to the auto-filled forms and the fact you're asked simple questions to complete your forms and identify opportunities to save.
- The chance to get support from a CPA. If you want added reassurance, access to professional advice from a real person can make all the difference.
- The TurboTax guarantees. Tax penalties can be costly but you won't have to worry about owing money due to a math error.
- Audit support: You'll get free answers to questions year-round if you're audited. And TurboTax provides the option to get professional advice at an additional cost.<br>
There are also some cons to consider. The disadvantages of TurboTax include the following:
- The program can get expensive, especially if you pay for live support. Unfortunately, you cannot claim common deductions, including the student loan interest deduction, if you use the free version, so many filers will have to pay.
- The maximum refund guarantee only refunds what you paid to file (or $30 if you used the free version). If you missed out on deductions or credits, TurboTax doesn't refund you the amount you'd have saved on your taxes
How to contact TurboTax
TurboTax provides access to an online forum where you can ask questions and get answers from other community members. There is also a searchable database offering instructions and video tutorials.
If you need to call TurboTax, tech support is available via phone at 888-777-3066, which is the general customer support line. You can also sign into your account and connect via phone or chat with an expert offering personalized support for your specific issue. If you pay for TurboTax Live, tax help is available via screen-sharing and video support.
How much is TurboTax?
The price varies by product. You can file for free if you have a very basic return, but prices range from $50 to $170 if you have a more complicated return or require live assistance.
Is TurboTax really free?
TurboTax is free if you have a very simple return. You will have to pay if you need to claim certain deductions or credits; if you have business expenses or earn business income; or if you have income from investments or a rental property.
Do you have to buy TurboTax every year?
You will need to pay for TurboTax each year when your taxes are too complicated to use the free edition or when you want live support.
What does TurboTax free edition cover?
You can use the free edition if you only have W-2 income and you are claiming only the Earned Income Tax Credit and child tax credits. You cannot use it if you have income from other sources or wish to claim other deductions, including the deduction for student loan interest or mortgage interest
Can you use TurboTax on your phone?
TurboTax offers a mobile app for Apple and Android devices. You can use the app to complete all your tax forms or to simply snap a photo of your W-2 so the information can be imported into your tax forms. You can also connect with a CPA or EA from your phone if you use TurboTax Live.
In addition to its tax app, TurboTax also offers a TaxCaster app to quickly estimate the amount of your tax refund as well as an app to keep track of deductible charitable donations called ItsDeductible.
TurboTax is one of the biggest names in online tax software, and with good reason. It's easy to use, offers ample support, and provides product guarantees that should give you peace-of-mind. While the price may be a little higher than some competitors, you may just find the added cost is worth paying thanks to all this program has to offer.