TurboTax Review – A Leader in DIY Taxes
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With many bells and whistles to make tax time as pain-free as possible, TurboTax is a great option for people who qualify for the free edition.
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Cost
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Ease of use
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Features
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Services
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When my finances became more complicated than I felt comfortable doing with pen and paper (and I became increasingly leery of mailing them), I was drawn to TurboTax. I remember my parents buying the old-school software when the CD version was the only option. They had good results with it, and it was less than the accountant they had since moved on to using, so I figured I’d try it.
Since then, I’ve been tempted to try other tax software (and even briefly considered pen and paper again!) because I no longer qualify for the cheapest tax filing options. This is a good thing. Needing the option to account for income earned abroad means I’ve had some awesome life experiences. And a rental property means I’m taking my investing experience to a new level.
While TurboTax isn’t for everyone, it is a top-notch product worth looking into.
In this article
What is TurboTax?
TurboTax was first developed in 1984, and almost a decade later, in 1993, it was sold to Intuit. Early users of TurboTax may remember buying a package from a brick-and-mortar store, which included the discs needed to walk you through your personal tax returns.
Today, you can do your taxes online with your laptop or work on them via the app while sitting in your car on your lunch break.
TurboTax has a free version of its software for filing federal taxes. It is suitable for young people with a simple financial situation—think a college student or young couple who both work W-2 jobs, have student loans, and a child or two. For more complex financial situations, you will need to upgrade to one of the paid versions of TurboTax. The Deluxe and Premium versions go more in-depth, covering scenarios like foreign earned income, investments in cryptocurrency, and rental property income.
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How does TurboTax work?
Getting started with TurboTax is easy. To create a free account, you need your name and email address.
After logging in, you’ll be prompted to start working on your tax return. Don’t worry if you’re just testing it out; you do not need to input your payment information until the very end of the process. You can even go through the entire process and see what you owe or your tax refund and then go through the process elsewhere to see if you get the same results.
Since I’ve used TurboTax for several years, it starts by asking which, if any, of these changes we went through in 2023. Just click the ones that apply, and continue on to the next page.
The questions continue on the next page. They highlight some of the most common life changes and financial situations people may have experienced, like a new job, if you received unemployment, or starting a business.
Although payment isn’t needed until the end, you’ll be prompted to choose the version you want to use. As a freelancer, I use TurboTax Premium, and it reminds me of that and suggests that I consider an add-on like audit support and live help from a tax expert.
From here, it starts asking a series of questions and goes through sections including:
- Income and expenses
- Deductions and credits
- Other tax situations
In the first section on income and expenses, you choose whether to take the standard deduction or itemize. This is where you start to upload tax documents, including your W-2 or Schedule C (freelance income), plus others like Schedule B (bank interest).
There are short videos that explain certain situations and how they affect your taxes throughout the process.
You can search for topics or questions on demand if you get stuck. Here, I searched for information on rental property. Answers are given in English and Spanish, adding to its user-friendliness.
The section on deductions and credits is very intuitive. While it may seem that there are a lot of questions, they are designed to help you get the maximum refund to which you’re entitled.
If you have children or other dependents, you’ll be asked about each of them to ensure they still qualify for benefits like the child tax credit.
Throughout the process, the left side will show a sidebar that gives you easy access to the different parts of your return. You can quickly return to a previous section and make changes or corrections.
You can also see your refund amount or the amount you owe. The numbers may change as you add income and get deductions or credits.
Once you get through the special tax situations, which deal with more complex investments and income sources, you’ll go through a final review of your Federal taxes.
Upon successful review and completion, you can go on to do your state taxes. These go faster since data from your federal return is automatically imported into the form.
Once these are done, one last review is done before you’re asked to pay. You’ll have several options for paying for TurboTax, including using your refund to pay for the cost. This does trigger an extra convenience fee to be added, so it’s best to use a rewards credit card and pay upfront.
After the payment is processed, your tax documents will be e-filed, and you’ll start getting email notifications alerting you when the IRS accepts them. In rare situations, you may not be able to e-file. If this happens, print out the papers and mail them to the specified address.
How much does TurboTax cost?
You can file through TurboTax in two ways: The DIY method and engaging a tax expert to do it for you.
Do it yourself
TurboTax product | Cost | Best for |
Free Edition | $0 | Simple tax situations |
Deluxe | $39 | Homeowners |
Premium | $89 | Investments and self-employed |
There are three tiers, each offering more features than the previous level.
The free edition is for the most straightforward tax situations and includes W-2 income, earned income credit, and the child tax credit.
The deluxe edition of TurboTax searches for over 350 tax deductions and credits for which you may be eligible. It also supports homeownership and helps you find mortgage and interest payment deductions. With the Deluxe version, you can maximize charitable contributions by determining which of your donations are tax-deductible.
The premium edition includes everything in the free and deluxe versions and further supports investments. Real estate investments, brokerage accounts, and crypto are supported, and you can import data from numerous accounts, making tax prep a breeze.
Hire an expert
TurboTax product | Cost | Best for |
|---|---|---|
Assisted | $0 to $169 | Expert advice |
Full service
| $89 to $359 | Let a tax expert take care of your filings |
Just like the DIY version, this version also has three tiers each.
Assisted is limited to advice. It is free for a basic, $105 for a deluxe, and $169 for a premium. The full-service suite will hand over the reins of your filing to an expert. It costs $89 for a basic, $249 for a deluxe, and $359 for a premium.
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TurboTax features
Here’s a look at some features that set TurboTax apart from the competition.
Mobile-friendly
The mobile app makes it easy to switch between your computer and your smartphone when doing your taxes.
TurboTax Live
Get expert tax help as you prepare your return by upgrading to TurboTax Live. You get access to a professional tax preparer who can answer your questions to ensure you do them correctly. Experts are just a click away and available nights and weekends, so they’re ready whenever you are.
TurboTax Full Service
No time to do your taxes but want the convenience of doing them from home? The Full-Service option pairs you with a tax expert who will do everything for you. You’ll get updates on their progress and a 100% guarantee that it's filed correctly.
Use your refund to pay
If you’re getting a refund, you can select to have your TurboTax fees deducted from the refund. Note that there is an additional $40 service fee for this.
Searchable Q&A
You can search the question-and-answer library when you have a question but aren’t ready to upgrade to the Live or Full-Service version. Enter a keyword or a question and get answers instantly.
Who is TurboTax best for?
This software is best for two groups of taxpayers: people with simple returns and those with complex returns who want convenient access to a tax pro.
Simple tax returns
TurboTax offers a free Federal and free state return to taxpayers whose tax situations fall within the scope of the free edition. A few situations that would be well-served by this include:
- A college student working part-time
- A married couple who have W-2 income, rent their home and have a child
- A retiree who has limited income and no investment income
Complex returns
On the other end of the spectrum, those with complex finances can access the entire suite of features with TurboTax deluxe and premium. Filing by yourself is easy as the software walks you through a series of questions that you answer to fill out your entire return. For extra peace of mind, you can get access to a tax professional who will review your tax returns before submitting them.
Who shouldn’t use TurboTax?
Due to the cost, people who need to use the paid versions of TurboTax may be better off using tax prep software that’s less expensive, especially when filing state taxes in multiple states.
People who live in one state and work in another or have out-of-state rental properties can save money using a less expensive service.
Related: Money Moves to Make Before April 15
Pros & cons
Not sure whether or not TurboTax is right for you? Here are some pros and cons to give you further insight into the software.
Pros
- The software is easy to use and intuitive. When it comes to ease of use, TurboTax can’t be beaten. Not only are you guided through the process with a series of simple questions, but they also use cute images to break up the monotony of text. Not sure what a question means? No problem, click the blue writing, and you’ll get a pop-up that gives you more details.
- You can upgrade without starting over. As you are guided through the questions, you may realize you need to upgrade to another version, or you may want to gain access to the live tax professionals. You can do this with a few clicks, and there’s no need to start your return from the beginning.
- You can import tax returns from other tax services. If you decide that TurboTax is a better option than the software you used last year, switching is easy. Just type in the requested info, and within a few minutes, all of your data is transferred.
Cons
- TurboTax isn’t cheap. Many tax prep alternatives are suitable for most people who want to file their taxes for less money than it costs to use TurboTax.
- TurboTax doesn’t have brick-and-mortar locations. Unlike H&R Block, which offers the option to meet with a tax preparer in person, TurboTax does not. The ability to chat with a person over the phone or online is always available.
- You need to upgrade to have access to tax professionals. While there is a search function that you can easily access while you do your taxes, it’s only as good as your understanding of what’s written. Some answers are written by community members (regular people like yourself), and accountants write others.
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TurboTax vs. competitors
Tax platform | Price | On-demand help |
TurboTax | $0 to $119 for federal, $0 to $49 for state | Yes |
TaxAct | $0 to $64.99 for federal, $39.99 to $44.99 for state | Yes |
H&R Block | $0 to $85 for federal, $0 to $39.95 for state | Yes |
TaxAct
TaxAct offers similar levels of tax preparation as other programs but with much lower price points than many of its competitors. The free version is only free for federal filing, but the state filing is only $39.99, whereas other versions of TaxAct cost $44.99 per state. Note that the free version does not support interest for student loans and mortgages, nor does it work for freelancers and investors.
TaxAct has a mobile app that allows you to work on your taxes from your smartphone or tablet. You can also use the app to upload a photo of certain documents. TaxApp allows for the auto-import of some banking documents. All TaxAct customers have free access to one-on-one help from tax experts with the Xpert Assist program.
H&R Block
H&R Block’s free version supports more complex financial situations than TaxAct and TurboTax. It can handle unemployment, the child tax credit advance payments, the earned income credit (EIC), and Schedules 1 and 3 for things like student loan interest and retirement account contributions.
Besides the free version allowing you to file state taxes for $0, Basic Online Assist gives you on-demand access to a trained tax pro.
Like many other tax prep programs, there’s a mobile app and an auto-import feature to upload financial documents directly. H&R Block also has thousands of brick-and-mortar locations, allowing you to work with a tax pro-face-to-face for an additional fee.
FAQs
Unsure if TurboTax is right for you? Here are some questions and answers that may help you decide.
Can I import documents from banks?
When you use TurboTax you can easily import tax documents from many national banks and brokerages. When you opt to have the data imported, you’ll be directed to sign in to that account and grant permission to TurboTax to obtain the information. You do not have to use this feature and can instead enter all data manually if you prefer.
Can I opt to file federal but not state?
You have the option not to file state taxes with TurboTax. You will need to manually fill out the forms and mail them in yourself to file state taxes. Although this will save you money, filing electronically ensures that the IRS receives your taxes quickly. Electronically submitted tax returns may be processed faster, too.
How does TurboTax integrate with QuickBooks during the online tax preparation process?
TurboTax offers seamless integration with QuickBooks, making it easier for users to import their financial data directly into the tax preparation software. This feature simplifies the tax season by automatically transferring income and expense information, ensuring accuracy and saving time during the filing process.
What makes TurboTax a preferred tax preparation software in terms of ease of use?
TurboTax is renowned for its user-friendly interface and guided process, making it accessible even for those with limited tax knowledge. Its step-by-step instructions, clear language, and helpful tips simplify tax preparation, ensuring users feel confident and supported throughout the process. Additionally, the software offers features like auto-importing tax documents and real-time error checking, further enhancing its ease of use.
Is TurboTax's free filing option sufficient for my tax needs during tax season?
TurboTax provides a free filing option that caters to simple tax returns, such as those with W-2 income, claiming the standard deduction, or with limited interest and dividend income. It's designed for ease of use, but more complex tax situations might require upgrading to a paid version for additional features and support.
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The bottom line
With many bells and whistles to make tax time as pain-free as possible, TurboTax is a great option for people who qualify for TurboTax Free Edition or those who want access to TurboTax Live for expert advice and a complete check of their taxes before filing them with the IRS.
TurboTax guarantees you the maximum refund possible and offers a money-back guarantee. Using their proprietary software, you’ll be guided through all the questions necessary to prepare your tax returns, whether you only have W-2 income or more complex finances with investment and self-employed income. It may be advantageous for those with a tax situation somewhere between to check out other lower-cost options for your tax prep needs.
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Writer
Charlotte Edwards is an educator-turned-freelance writer based in Beijing, China. She writes personal finance and parenting content for both digital and print publications around the world.
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