TurboTax offers robust functionality and versatile tools to make it one of best tax software options out there.
Since its development for home computing in the mid 1980s, TurboTax has been though several incarnations, each growing its influence and user base throughout the years. It was acquired by Intuit in 1993 and is now one of the leading tax software solutions in the United States, alongside its main competitors, H&R Block and TaxAct.
Two of the main selling points of TurboTax are its relative ease of use compared to other tax filing software solutions and the fact that it partners with around 1,000 corporations, streamlining the way that employees of those corporations can file taxes via easy importing of their official documents.
In addition to being a portal for individual tax returns, the program also wins points for actively suggesting and recommending deductions that the user may not previously have been aware of, meaning that using TurboTax is a good way to educate oneself about the tax return process. Robust support features such as these are available across all of its products, but that does mean that there is a price tag attached (there is a sliding price scale depending on the type of tax return being filed). The company reports that in 2019, some 40% os US taxpayers filed their taxes online, and this included some 40 million people using TurboTax.
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TurboTax review: Cost
Handles all state and federal tax returns
Active recommendations for deductions and credits
Import W-2 paperwork with a phone
- Free: $0
- Deluxe: $59.99
- Premier: $69.99
- Self Employed: $119.99
TurboTax products range from free (for very simple tax returns) through to $120 for the most advanced version for self employed users.
The prices for TurboTax software (excluding the free version) are slightly higher than the comparable product prices of their main competitors, but the brand recognition and additional inbuilt features compensate for the difference. The free version can be used by people with an income of less than $66,000 and, as already stated, it works for very simple tax returns.
The Deluxe version is the most popular, and comes with the increased functionality that most users will appreciate. This version retails at around $59.99. There are Premier (for investments and rental property owners) and Self Employed versions that retail at $69.99 and $119.99 respectively.
TurboTax review: Products
- Free edition: Simple returns
- Deluxe edition: Actively searches for potential deductions
- Premier edition: Rental properties, stocks and bonds, cryptocurrency
- Self employed: Contractors, freelancers, small business owners
The Free Edition works perfectly well for simple tax returns, which should include almost everyone that earns less than $60,000 per year. It isn't quite as robust as Credit Karma Tax, but still very good. This version is very straightforward to use, and includes some great features, such as the ability to just take a photo of your W-2 with your phone and then upload it (this works seamlessly for those users who work for one of the 1,000+ TurboTax partners).
The Deluxe Edition brings users a lot more functionality for the extra outlay, most of it looking to save you more money than it might cost to buy the software, so it seems like a worthy investment. This edition actively searches for potential tax deductions and credits that the user may not be aware of, up to some 350 of these. It also analyses outgoings such as mortgage and property tax payments (on the user’s family home, not rental properties) and looks to maximise these deductions.
The Premier Edition (for investments and rental property) covers all stocks and bonds activities, imports the users investment income automatically and even analyses the user’s cryptocurrency transactions. Additionally, this version looks at the deductions that are available on any rental property income that might be coming in.
Finally, the Self-Employed Edition includes informative guidance for users such as contractors, freelancers and small business owners. It is primed to flag up industry-specific deductions and it comes with free individual assistance from TurboTax’s self-employment specialists. All of the various editions of TurboTax are fully equipped to prepare and submit tax returns in all fifty states as well as all federal tax returns.
TurboTax: Usability / User reviews
- “Interview-style” approach to information gathering
- No tax jargon
- Intuitive interface
All of the TurboTax editions are designed with ease of use in mind, and TurboTax scores highly against many of its competitors for employing an ‘interview-style’ approach. This means that the software prompts users with conversational-style questions to ascertain tax information, a nice side effect of which is the relatively infrequent use of tax jargon that would have users heading straight too Google.
There are also occasional encouraging messages designed to skim some of the stress from the process, with phrases such as “You can do this!” popping up. TurboTax allows the easy upload of documents. W-2 paperwork for instance, can be uploaded as a photo of the form taken by the user’s phone.
All in all, it’s an intuitive, straightforward process with easy interfaces so long as the tax filer chooses the most suitable version for their return. The company is not officially accredited to the Better Business Bureau but they do receive the top A+ endorsement.
Should you choose TurboTax?
TurboTax is one of the most popular options for filing tax returns. Its various options, including the free version for basic tax returns, mean that users can choose the edition that most suits them, and the functionality and robust features within the software mean that preparing a return is as stress-free as it can be. The paid-for versions are very slightly more expensive than some of their competitors, but the added features and versatility make them worth paying for.