[Editor's Note: It has been fun the last year or two to go back and update some early posts on the blog. Most of you have never read them, so they're new to you. Some require almost no changes as they're quite evergreen. Others require a fair amount of updating or they don't make sense to current readers. This one is from 2012 and is somewhere in between. I'm still using Turbotax, but I certainly don't harbor any ill will toward you if you choose to use one of their competitors or even hire a great professional tax preparer.]
7 Things I Still Love About Turbo Tax in 2020
#1 Easy to Re-do forms
I used to do my taxes by hand. That was a wonderful way to learn the tax code and become familiar with the 1040 and the various schedules and forms. But every time I remembered something new I could deduct, I had to go back and re-do at least one form. That was getting to be a serious pain. With Turbotax, I just log-in, change one number, and the program changes a half-dozen other forms instantaneously. Very cool. In fact, this simple feature allowed my state tax return(s) to be done in something like 2 minutes. Too bad they couldn't do that with my very complicated federal tax return.
#2 Imports Last Year's Tax Return
I've used Turbotax multiple years in a row. I'm surprised how much stuff you get to skip after year one: Addresses, sources of income, deductions, bank account numbers…anything that remains the same year to year is imported directly in.
#3 The “Pro” Option
Turbotax allows you two options as you go through their “Income” section and their “Deductions” section. You can either have them lead you by the hand and ask you dozens of questions about each item, or you can “explore on your own”. If you already understand the basics of the tax code, that's a real shortcut. I don't use Turbotax because I don't know what's deductible. I use it to speed up the process and make it more accurate. But either way, Turbotax has an option for you.
#4 Computers Add Better Than I Do
It's not that I'm bad at math. I always received good grades in math, at least until college calculus (it was still a B, but I'm not sure I deserved even that). But when you have dozens of calculations, all dependent on one another, one little error screws up everything else. It shouldn't surprise you that Turbotax makes fewer math errors than I do. Aside from having an inaccurate return, possibly losing me money or even triggering an audit, miscalculations also mean I have to do re-do more forms, which can be immensely time-consuming.
#5 Automatic E-filing
It's no secret that the IRS and your state tax commission want you to e-file. It's easier for them, easier for you, more accurate, and you get your refund faster. That process is literally a click of the mouse with Turbotax. You don't have to deal with your state website, or fill out any new online forms. No printing, stamping, addressing, walking out to the mailbox, etc. If for some reason you WANT to paper file, you still can. Perhaps if you owe money you might be able to delay their withdrawing it from your bank account by a few days by doing so. Turbotax even has an option where you can do your tax return now, and have Turbotax file it automatically in April without you ever thinking about it again (which I recommend if you owe money).
#6 You May Only Need the Basic Version
Turbotax makes a lot of money off up-selling. They used to have a Basic Version. But they've basically replaced that with a free version. The next step up is “Deluxe”, for those who itemize their deductions (Schedule A). They have a Premier edition aimed at those with rental property or investments. They even have a Home & Business edition for small business owners. Guess what? Back in 2012 when I had rental property, investments, and a small business I was still able to use Deluxe. So start there and upgrade as needed. The free version won't import last year's data, and if you need to file Schedules C (small business), D (Capital gains and losses), or E (Rental Property) you can't use it. But it's a great option for many filers.
So what does Turbotax cost? Here are the online version prices through our affiliate link (sale pricing as of 2/4/2020):
- Free Version – $0 Federal, $0 State
- Deluxe Version – $39 Federal, $39 State
- Premier Version -$69 Federal, $39 State
- Home and Business – $89 Federal, $39 State
I used to use the cloud version, but due to a need to use “Forms Mode” to make one adjustment each year due to my defined benefit plan, I have had to buy the PC/Mac Download version (also available as a CD) the last few years. However you choose to buy the product, you'll save hundreds compared to hiring a CPA to do it.
#7 You Can Get a Free CPA on the Phone
Turbotax offers free support and advice both for using their software and calculating your tax bill. There are two things I don't like about online software. The first is that you learn more about the tax code by doing your taxes by hand. You lose some, but not all of that, by using software. But the main issue I have is that when you can't figure out how to do something on the paper forms, you can go to an IRS publication easily with Google and figure it out. Tax software, in trying to make things easier for those who have no clue how the tax code works, sometimes makes it hard to figure out where to input data that I know where to put in on the paper forms. A good example is explained by The Finance Buff where he explains How to Do a Backdoor Roth Using Turbotax. It's actually more complicated to do it in Turbotax than by hand! I had an issue a few years ago with doing an ESA to 529 conversion. It wasn't that I didn't understand the tax code, it was that I didn't understand where to put the information into Turbotax so it would put it on the forms correctly.
So I decided to try out the free support. I started out 120th in line, but within about 20 minutes (which I killed working on another part of my return), I had a CPA chatting online with me who answered my question clearly after just a couple of minutes of research. He had the same problem I did – he understood the code, but not necessarily the software. He even sent me an email a few minutes later with a more detailed explanation.
Turbo Tax Competitors
Overall, I continue to be very pleased with Turbotax year after year. They've been around the longest and frankly are the number one seller for a reason. Most tax-prep services allow you to import previous returns no matter which tax service you have used, so if you want to try something new, give it a go. The usual competitors are H&R Block, Tax Slayer, and Tax Act. I've tried a couple of them over the years, but always came back to Turbotax. Yes, it usually costs a bit more, but frankly, the value of my time is the expensive part of the whole process so I prefer to go with what I know.
If you're looking for the absolutely cheapest way to do your taxes, do paper returns. Otherwise, I don't know that you should really make a decision based on just a few dollars. If you've used any of these tax software solutions recently, please post about your experience in the comments. Online reviews I've seen seem to indicate you get what you pay for here.
Another Free Option
There is another option that has come out since I wrote this post originally. It is a free option provided by the IRS that takes advantage of one of ten commercial software products (including Turbotax). However, there is a catch. You can't use it if you made more than $69,000 (for tax year 2019). I find that really painful. Not only do I pay much more in taxes as a high earner, but I also have to pay more just to file them. At any rate, if you are a med student, resident, or retiree, these might be options for you. The IRS does offer “free, fillable tax forms” but don't kid yourself. This is the equivalent of doing your returns on paper. That's always been free.
The Most Expensive Option
The most expensive option (at least until you consider the value of your time) is to hire a professional to do it. Our Recommended Tax Strategist (more than just preparation) list has been growing over the years. If you hate doing taxes, you might be surprised just how cheap it is to have a real pro do it for you AND give you advice on keeping that bill as low as possible.
Buy TurboTax Today! or
Hire a Pro Today!
What do you think? How are you preparing your taxes this year and why? Comment below!
Like most companies who have been in business for awhile and find themselves high on the totem pole with a very large customer base, Turbo Tax has turned into a greedy, money grabbing American corporation. From the moment you walk up to the display at your favorite big box store to the final minutes AFTER you file, they are trying to sneak an upcharge past you. This year, with the downloaded software, it’s an extra $40 to e-file the State return. You’d never know it reading the box and you won’t realize it until, you guessed it, when it’s time to click the transmit button. I did a double take on the box and sure enough it says “Includes 5 Federal e-filings and one Free State!!” Now wouldn’t you just assume that meant you could e-file one State along with the Federal return? Nope, surprise! 40 bucks please or you have tostart all over, because of course you can’t transfer the work you’ve already done into the online program (which includes a state and is cheaper) until AFTER you’ve filed – 2020 technology simply won’t allow it! Also you’ll find little traps within the online software such as the new fee for paying your turbo fees with your refund – surprise 40 bucks extra. I guess it wasn’t enough for Turbo Tax to be guaranteed their fee via the refund – that had to charge for that service. Paying to pay is what Turbo Tax is a master at. And the button to click that indicates you want to STAY at the level you’re at – right next to the level indicator it says “No Thanks.” Meaning “no thanks, i don’t want to stay I want to upgrade.” There is only one word for this kind of crap – SHADY.
And of course we’ve all heard about the way they are exploiting the poor. Sure they have a totally free program – on a totaly diffferent website (freefile.intuit.com). But good luck finding any reference to that on Turbo’s home page. The government’s rule is no more than $60k to file for free but for Turbo Tax, it’s 36K. I wonder how much that excpetion cost them – because they are the only company with that exception. As far any dream of “free” goes, what you will see on their homepage is a program called “Free Edition” but you can’t import last years return, which the IRS says you MUST then mail the return – so no efiling for you and the minute you add one form other than a W-2 or the new one this year, interest on a student loan it bumps you up – so obviously the Free Edition is designed to be a gimmick to rope people in because guess what – it AIN’T FREE. That is an outright lie on their website. The investors must be so very proud.
All’s fair in Capitalism I guess, but such shady behavior when it comes to paying taxes really puts a bad taste in my mouth. Not to mention of course, that Turbo Tax is simply using their billions to lobby the government to not simplify the tax code – which if you think it about it, is really unconscionable that such a thing is even possible. I guess the drug companies are also lobbying the FDA to approve drugs and thwart cures as well – a terrifying thought since, sure enough we haven’t seen a cure for any disease in decades. Our country has become a money-fueled cesspool of corruption and Turbo Tax shows more and more of its greedy ass every year.
The past 2 yrs they didnt charge me nothing for just a simple short form.
This yr anther simple short form and they took 70.00 out of my 113.00 refund and said I signed up for the premium package with covers rent property and stocks, I have neither .
After talking to 8 supervisors their not giving back my 70.00.
Their stealing my 70.00 for something the forms clearly show and not giving it back.
Do I let them do them again in the future Hell no!!
If anyone with turbo tax see’s this .
Help me get my 70.00 back
Thank you !!!
I’ve been using TurboTax to do our family taxes for more than ten years. As our financial situation changed over the years it was reassuring to know there was a TurboTax version available that would provide all the forms, instructions and math needed to get the job done. One of the greatest options I’ve used over the years is to use TurboTax to prepare “what if” versions that show exactly what the probable outcome will be on our income tax liability should I take a specific action. It may not be a 100 percent accurate impact for the next year but it will be very close. This alone has helped us decide how various financial action may help or hurt our tax liability.
THANK YOU FOR YOUR “Another Free Option” PARAGRAPH! Can I just say as a WCI follower that this should be an entire blog post in itself! This would be so helpful for Residents and Medical Students to know about!
Because it’s so easy, I have always used TurboTax to file my own and my spouse’s taxes (married filing jointly). I fall every time for the “free” option. Then I end up paying whatever TurboTax tells me to pay, assuming that it’s just necessary. Until this year when our budget was especially tight, and they wanted to charge me $110 to file. Then I read the blog above, and the following link was also helpful as I did further research:
https://www.propublica.org/article/turbotax-just-tricked-you-into-paying-to-file-your-taxes.
Turns out even for the most simple return – TurboTax is SELDOM FREE. I would reiterate that a whole separate blog should be dedicated for residents or medical students filing taxes – meeting the “below $69,000 requirement.” TurboTax is useful for high income earners, NOT FOR SIMPLE TAXES OF LOW INCOME EARNERS, aka medical residents and medical students. I would never recommend TurboTax if you meet the >$69,000 requirement.
I filed with TurboTax, then canceled after they wanted to charge me >$100. Following your link above (https://apps.irs.gov/app/freeFile/) I chose the following program after considering all their options:
https://www.olt.com/main/oltfree/default.asp
OLT (this was the only option that guaranteed filing for BOTH federal and state would be FREE)
They were similar to TurboTax in electronic calculations and ease of use. I received the exact same refund estimate as TurboTax, and paid ABSOLUTELY NOTHING TO FILE.
Thanks WCI for the extra $100 in my pocket!!
Has turbotax always required a paid version if you have an HSA? It is requiring that for 2020
I don’t know. Doesn’t really matter though, does it? You either cough it up this year or you use something else, no?
I have used Turbo Tax Premier for the last 6 years and have always been able to talk with a tax professional if I had any problems or questions. This year, I am being told that I have to purchase Live if I want to be able to speak to someone.
Is this new? I have never had to pay extra to ask a question about an entry.
Any information you could give me will be greatly appreciated.
Wouldn’t be surprised. Businesses are always looking to raise revenue. It’s not like the alternative (hiring an accountant) will be cheaper.
The Customer Service agents are always available. These are low paid front line agents manning the phones. They are trained to help with technical, website and software issues. Officially they are not required to answer tax specific questions however many of them do if they know the answer or can easily find it for you. If they don’t they will transfer you to a “Tax Professional.” These are the guys who get paid the big bucks to know all about the Tax Code, however you do need to be a LIVE customer to access this service. It has been this way for about 3 years.