Ask for a tax software recommendation from a tax software user, and more likely than not TurboTax will get the nod. After all, this software juggernaut has stood the test of time, and stuck around for quite a few years. Fueling this longevity is that TurboTax has the fullest set of features to support every tax situation, making it ideal for the widest group of users. Through the tax return process if offers lots of hand holding, although at a cost is higher than just about all of its peers.
TurboTax comes from Intuit, which also has other popular products, including QuickBooks, and Mint. Intuit was founded back in 1983, has over 9,000 employees, and $6 billion in revenue.
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TurboTax offers a number of different software tiers to choose from. Here we detail the online software options.
Starting it off is their no cost option, known as ‘TurboTax Free Edition.’ This is designed for simple tax returns, and costs $0 for a Federal, and also a State return. It includes W-2 income (that can be easily entered by snapping a pic of it), limited dividend income, Child Tax Credits, and the standard deduction. For just about anything more complicated, including itemized deductions, or business income, than a higher tier will be needed. Still, TurboTax claims that this lowest tier covers the tax software needs of 50 million Americans, and even includes e-Filing, and guidance if there is an audit of your taxes.
Moving up a tier brings us to Deluxe, which is their most popular. This one has a current cost of $39.99 (about £30). This has a richer feature set, with the ability to import prior year tax data, and will walk you through common tax situations that offer the potential for money saving deductions including home ownership with mortgage interest and property taxes, charitable donation of property, and a Deduction Finder that can search for over 350 deductions.
There is also available on demand help, via a Turbo Tax Specialist that can provide personal guidance by sharing your device’s screen, and they can even draw on it to give advice. Despite all of these features, the shortcoming of the Deluxe tier is the State return needs to be purchased separately.
Next higher up is the Premier tier, that has a cost of $59.99 (about £45). This tier can automatically import investment income, deal with the complexities of rental property tax income and deductions, and even covers the new tax situation of gains and losses from cryptocurrency.
The top TurboTax tier is Self-Employed, which will run you $89.99 (about £68). This includes everything in the lower tiers, and focuses on the needs of those that own their own business, including guidance from subspecialized tax self-employed tax experts. It is designed to focus on specific industries, such as rideshare, and online sales, to maximize the deductions specific to that industry.
As mentioned above, for any tier other than the free one, the State is available as an add-on. The cost is $39.99 (about £30), and it can automatically import data from a completed Federal return. A military discount is available that enables free filing on the Deluxe tier for those with E1-E5 rank, and a discount for higher ranks.
While other tax software may compete on price, TurboTax shoots for the upper end of the DIY tax software market, going for the full feature set to suit a variety of tax needs, including some niches that others gloss over, and do not specifically address. TurboTax’s software options also cover the gamut, with the online software options above, and there are also options to download the software for a desktop or laptop, or even as an Android or iOS mobile app for use on a smartphone or tablet.
We especially like the targeted approach to freelance, and self-employed income. As the occupations vary considerably to produce this income, as do the deductions applicable to the industry. Unlike the competition that provides a more generic, one size fits all approach, TurboTax targets deductions for a real estate agent of a home office, marketing materials, and automotive mileage, while for a freelance designer it focuses on studio rental, art supplies, and designer society fees.
Taking this approach approximates how a seasoned accountant would approach such a tax return to maximize the deductions. Taking this even further, TurboTax then offers TurboTax Live, which gives live guidance on demand to review and maximize these industry specific deductions.
While most tax programs are done once the user hits to upload the return to the IRS, the help that TurboTax offers extends beyond transmitting the e-File. Options include the ability to print the return, access to a prior year’s return, confirm the e-File status, and amending a return. Everyone looks forward to receiving their tax refund, and TurboTax provides the user the function to track a tax refund- with useful guidance if the refund check does not come, such as reassurance that the ‘Audit Season’ does not start until the Summer allaying fears that a delayed check is due to a dreaded tax audit.
TurboTax shoots for the moon, and we appreciate what it delivers. Not content to be an also ran among tax software, users looking for the tops in terms of specific guidance for niche tax situations, and support would do well to go with this option that distinguishes it from the competition.
The major shortcoming is the higher cost, particularly compounded that the State return is an add-on expense, and the downloadable version costs more than the online version. Still, for those that appreciate the finer things in tax software, and realize that TurboTax is going to cost less than going to an accountant, it remains a great and reliable option.
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