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Every year around tax season, people across the country look for ways to make filing federal tax returns and their state returns a little easier. There are so many laws impacting taxes, on top of different tax breaks offered, depending on your situation.
To top it off, figuring out how to sift through your records and fill out tax forms can be time-consuming.
Enter Intuit’s TurboTax. This online tax filing software is a very commonly-used resource. And for good reason: TurboTax is intuitive and user-friendly, letting users e-file their federal income tax returns and their state returns.
This TurboTax review will cover both the pros and the cons of using TurboTax and the filing process you can expect when you use the online platform or the mobile app.
In this review:
Getting to Know TurboTax
TurboTax offers a variety of different products designed to help you navigate your tax return based on your circumstances. There are products aimed at individuals, businesses, and the self-employed. On top of that, it’s possible to get CPAs, tax professionals and IRS Enrolled Agents to review your tax return and answer questions for an extra fee with TurboTaxLive.
No matter which TurboTax product you choose, the program takes you step-by-step through filling out your tax return by asking you questions about your situation. Additionally, you can easily include documentation by uploading your W-2, 1099s, and receipts. It’s even possible to snapshot your W-2 using your phone or tablet. The smart technology identifies information and pulls it out for use on your tax return.
Most of the TurboTax programs charge a fee, and if you want a professional to review your tax return before you file, you might need to pay extra. However, there is a tax filing product that is free for qualifying individuals.
What you pay for TurboTax depends on how complicated your taxes are. Not every product will accomplish what you need it to. For example, the Deluxe edition doesn’t have all the same features as the Self-Employed version.
Online Tax Products
You can start your tax return for free using the online version. You only pay when you file your taxes. This allows you to get started, but if you end up needing more help, or access to additional features, you could end up paying more than you expected.
The online products you can access include:
- Free Edition: This is for simple tax returns where you claim the standard deduction and only have W-2 income, as well as meet other qualifications. If you meet the criteria, you even get to file your state taxes for free.
- Deluxe: If you plan to file a Schedule A with your tax return, this helps you take advantage of more than 350 searchable tax breaks. Cost: $39.99. You can get the TurboTaxLive version of Deluxe for $89.99, which comes with a line-by-line review of your taxes before you file.
- Premier: For those who have investments and rental property, this version can be helpful. A new feature is TurboTax’s ability to help you calculate gains and losses from cryptocurrency transactions. Cost: $59.99. However, you can get the TurboTaxLive version for $139.99, a price that includes tax help year-round.
- Self-Employed: When you’re working for yourself, you might miss deductions. This version includes industry-specific deductions and guidance on things you need to know about claiming mileage and cell phone use. Plus, you get access to QuickBooks Self-Employed for free. Cost: $89.99. Get the TurboTaxLive version, which includes a personalized audit assessment, for $169.99.
With these products, most people can get through their tax filing without too much trouble. Understand that there is an extra fee for filing taxes at the state level.
Desktop Tax Products
It’s also possible to get a desktop version of TurboTax. You can download a version from the website, or it’s possible to order a CD with the desired program. The desktop products include:
- Basic: This is meant for simple tax returns. You can get information on tax deductions, but it isn’t as extensive as other versions. This version costs $39.99 and doesn’t come with a state tax return, so you have to pay extra for state filing.
- Deluxe: Using this version gets you access to more than 350 deductions, as well as a feature that helps you value donated items. You pay $69.99 and receive one state download on top of your federal filing.
- Premier: When filing taxes with TurboTax Premier, you’ll get help with reporting investment sales, royalties, and stock plans. This version comes with access to the TurboTax IRA tool. You get a state download with the Premier version, which costs $99.99.
- Home & Business: If you’re self-employed, you can get extra help filling out your Schedule C and claiming deductions for your vehicle and home office. Plus, you can get help creating W-2 and 1099 forms for your employees and contractors. This comes with a state download and a price tag of $109.99.
All of the desktop products come with phone access to product support, so you can call TurboTax to get some of your questions answered.
Sometimes you need more than just self-employed tax filing software. This is where TurboTax Business comes in. You can get personalized guidance, depending on the type of business you have. On top of that, you can access industry-specific deductions and import your data from QuickBooks, making it easier to fill out your tax return.
You can also use this software to create W-2 and 1099 forms, as well as generate and distribute K-1 forms. Guidance for real estate and rental property activities are also included. The price for this version is $159.99, but that doesn’t include a state tax return, which costs extra.
Pros of Using TurboTax
TurboTax makes it significantly easier for people and small businesses to complete their taxes. With this program’s intuitive interface, tax filing is simpler.
On top of being simple to use, TurboTax also features a number of tools designed to help you accurately complete calculations. The IRA tool, ItsDeductible tool, and other calculators all help you determine value and make better decisions.
With a program like TurboTax, you might find deductions you would otherwise have missed doing your own taxes. TurboTax is updated to reflect the tax reform law passed in 2017, so you’ll know of any significant changes. It’s also nice that you can get access to knowledgeable professionals to answer your questions and review your tax return before you file. The tools on TurboTax make filing easier and can also help you maximize your federal refund if you’re owed one.
It’s a bonus to have the ability to save your information from previous years, import from QuickBooks, and use your phone’s camera to capture your W-2. All of these features make using TurboTax relatively easily compared to other tax programs.
TurboTax features a variety of options like TurboTax Deluxe so you can choose the custom option right for your needs and there are features such as audit support that are helpful as well.
Cons of Using TurboTax
While there are a lot of great features that freelancers, contractors, and small businesses can use when filing taxes with TurboTax, the reality is that it might not be enough for larger companies. Big companies and people with extremely complicated situations might benefit from hiring an accountant.
Another downside is the fact that you don’t know your final cost until you actually file your taxes. You might think you’re starting with the Deluxe version, but if you need something that isn’t included in that version, your cost will bump up. You could be unpleasantly surprised when you check out. This is different from a program like TaxAct, which guarantees you a price up front.
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On top of that, you might need to be careful when filling out the forms. Remember: your results are only as good as your inputs. If you make a mistake filling out your forms, you might have your tax filing rejected.
The flip side is that TurboTax can be cumbersome if you’re confident about your abilities. If you have relatively simple taxes, or if you’re an old hand at filling them out, the questions and hand-holding can be annoying—and not worth the expense. The IRS offers free fillable forms you can use if you’re confident in your abilities and not interested in paying the cost of TurboTax.
There’s a reason that TurboTax is one of the most popular methods of tax preparation and top tax software platforms in the country. It’s a high-quality, feature-rich product that can offer access to human help as well as computer-based help.
For those who have slightly more complicated issues, including freelancing and owning a small business, or making money through investments, TurboTax can help you with filing taxes on a step-by-step basis.
However, you do need to be willing to pay a little extra if you want access to professionals and more features. Even paying the extra, though, can cost you less than paying an accountant to prepare your tax return.
In the end, you need to look at your tax situation to decide if tax prep software is the right move for you. As helpful as TurboTax can be, there will be some circumstances where even the most advanced computer program can’t replace a human professional.
Author: Miranda Marquit