If you’re aiming to take matters into your own hands this tax season, chances are you’re familiar with TurboTax. Intuit’s tax filing software is arguably the most well known of all the tax software options and has been the industry standard for filing taxes from the comfort of one’s home for years.
In my review of the best tax software for 2016, I ultimately found that TurboTax was the best option on the market. Not only is the design by far the most intuitive, but the program itself is perfectly suited for first-time tax filers as well as those with more complicated returns such as business owners or freelancers. By combining a sleek interface with comprehensive question prompts and audit protection, TurboTax is unrivaled as the premier option in tax-prep software.
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Let’s take a deeper look at the ins and outs of TurboTax and highlight its strengths and shortcomings.
Which TurboTax Software Do I Need?
TurboTax, developed by California software outfit Intuit, is considered the top of the food chain in the world of tax software. TurboTax offers users a simple, stress-free solution for tax season, as well as the comprehensive flexibility needed in unique or complex tax situations. To accommodate all users, TurboTax offers multiple price tiers, ranging from free to $79.99 on federal tax returns. Let’s take a quick look at each plan in TurboTax’s repertoire.
TurboTax Federal Free Edition
There’s a reason TurboTax was not only my top overall pick, but my choice for best free tax software as well. TurboTax makes it very easy for users to start with its renowned Federal Free Edition, and only upgrade to the paid version if they really need to.
The biggest advantage of the TurboTax Federal Free Edition is its Absolute Zero guarantee. If you’re filing a basic 1040A or 1040EZ form, you can file both your federal and state income tax returns for absolutely free, a service unmatched in the industry.
The biggest drawback to Federal Free Edition, which could cause some headaches, is that you can’t import a previous year’s tax returns, even if you filed with TurboTax.
Here’s what TurboTax Federal Free Edition has to offer:
- Absolute Zero guarantee, free federal and state tax filing for basic 1040A and 1040EZ forms.
- Step-by-step walkthrough of your tax year, including precise questions related to recent life changes.
- Multiple W-2 importing, useful for anyone with more than one job.
- Affordable Care Act forms.
- Access to TurboTax’s AnswerXchange and free live chat support.
TurboTax Federal Free Edition Cost:
- Federal: Free
- State: Free to $27.99
TurboTax PLUS isn’t a version of the tax software you can start out with. In fact, it’s only available to previous Federal Free Edition users who needed to upgrade for tax complications or convenience reasons.
TurboTax PLUS includes everything in the Federal Free Edition, plus:
- Import and transfer previous-year tax returns. TurboTax PLUS eliminates the biggest downside of its Federal Free Edition by allowing users to import their previous year’s tax return, whether they filed it with TurboTax or a competitor.
- 5% federal refund bonus: Opting to receive your federal refund as an Amazon gift card will earn you an extra 5% on the refund amount.
TurboTax PLUS Cost:
- Federal: $27.99
- State: $36.99
If you’re in a more complicated tax situation, TurboTax Deluxe may be the tier for you. Most notably, this plan adds itemized deductions and added income support.
TurboTax Deluxe includes everything in the previous plans, plus:
- Itemized deductions, made easy and intuitive in the software. (If you’re a homeowner still paying significant interest on your mortgage, you’ll probably want this feature.)
- All previous tax returns are accessible.
- Miscellaneous income support: For any income indicated on Form 1099-MISC, Deluxe allows you to file an infinite amount of 1099s. However, this doesn’t cover a self-employment tax for freelancers or contractors, who will have to file Schedule C.
- Customer support phone hotline.
TurboTax Deluxe Cost:
- Federal: $34.99
- State: $36.99
TurboTax Premier is where things start to get a bit pricey. With Premier, Intuit introduces support for Schedules B, D, and E, making this the right tier for more complicated tax situations. If you receive rental income, investment income, or other non-wage income, this plan is likely for you.
TurboTax Premier includes everything in the previous plans, plus:
- Schedule B support, which is necessary for anyone with over $1,500 in dividend and interest income.
- Schedule D support: This covers capital gains and losses from the sale of various assets.
- Schedule E support: Needed if you’re reporting income from rentals or similar properties.
TurboTax Premier Cost:
- Federal: $54.99
- State: $36.99
Self-employment tax can be a huge pain if you’re not prepared for it. The highest TurboTax tier, Self-Employed, is designed to help contractors, business owners, freelancers, and other self-employed people get through tax season as easily as possible.
Notably, this tier is among the most expensive tax software options on the market. However, if you have to file Schedule C for self-employment, shelling out the cash for an intuitive and easy-to-use tax software can be a big time saver.
TurboTax Self-Employed includes everything in the previous plans, plus:
- Schedule C support for self-employment tax returns. TurboTax does a top-notch job at streamlining the process of filing a Schedule C or Schedule C-EZ tax return. This is a must have for freelancers, contractors, small business owners, and other sole proprietors.
TurboTax Self-Employed Cost:
- Federal: $79.99
- State: $36.99
What does TurboTax do right?
- Thoughtful, intuitive design to help streamline the tax filing process
- Surprisingly strong mobile app, TurboTax Mobile.
- Comprehensive free software, including the Absolute Zero guarantee.
- Ease of upgrade from free to whichever tier suits your needs.
- Thorough questioning to help identify opportunities for credits or deductions related to your life situation to maximize your tax refund.
- Strong live chat/phone support, with extensive AnswerXchange.
- Military edition catered to the needs of someone in the armed forces.
- Top-of-the-line audit detection.
- Unmatched deduction finder.
What does TurboTax do wrong?
- No access to real agents, unlike H&R Block.
- More expensive than the competition, especially if you’re forced to use the Self-Employed plan.
- Occasional pricey processing charges on federal returns.
- Users must pay to access many basic forms and schedules.
Despite its minor setbacks, TurboTax overcomes the competition by backing up its name with the most intuitive and comprehensive way to file your taxes. No matter your tax situation, TurboTax has proven to be a strong force in tax software. From free federal and state tax filing all the way up to home business coverage, TurboTax is simply the best option on the market for anyone filing taxes.