TurboTax Review

TurboTax is a popular tax software with the do-it-yourself tax preparation crowd. I’ve used it myself for the past three years, and I’ve been impressed with how easy it is to file my taxes with TurboTax.

Recently TurboTax provided me with a coupon code to review TurboTax Premier.

TurboTax Options

TurboTax offers five different tax filing options online.

Free Edition. The free edition is for those with a very basic return. If you have a regular job with a W-2 form, a basic savings account, and don’t have any complicated stock transactions, this is the option for you! Federal e-filing is free, but state e-filing will cost you $27.95.

Deluxe. If you have a fairly basic return, but itemize your deductions, the Deluxe edition is probably your best choice. It costs $29.95 for federal e-filing, and state costs an additional $36.95.

Premier. Best for someone with complicated stock transactions or rental property income, TurboTax Premier will cost you $49.95 for federal e-filing. Again, state filing is $36.95.

Home & Business. This is the best option for home based business owners, like me. Designed for those who own their own businesses, this option will run you $74.95. State filing is $36.95

Business. If you have more complicated business transactions, such as when you own a corporation or are part of a partnership, the Business option is the best. It costs $129.95 for federal e-filing, with state filing being $49.95

Preparing Your Taxes With TurboTax

Preparing your taxes with TurboTax is fairly straightforward. If you have used a paid version of TurboTax before, and you use a paid version this year, TurboTax will automatically enter your basic information from last year.

In my case, the basic information from my husband’s W-2s and my 1099s were already entered. TurboTax asked me if we had W-2s and 1099s from the same companies this year. Some of the information had changed. I checked the boxes of the itmes we didn’t need on our return and easily deleted the information.

Entering W-2 information was easy, since the basic information had been imported from last year’s return. I just had to enter the wage and tax information, and I was ready to move on.

I began entering information in the Deluxe version of TurboTax, knowing full well that I’d be upgrading to a higher version. Sure enough, when I told TurboTax that I was self employed, TurboTax suggested I upgrade. The software gave me the option to upgrade right then or continue with the Deluxe software. So if you’re not sure which software to start with, choose the least expensive and work your way up.

TurboTax is pretty thorough about asking questions to make sure you take advantage of every deduction you can take. I worked all the way through the form without any major moments of confusion.

Both your federal and state refund amounts (or tax to pay) are shown at the top of your screen, so you know where you stand as you enter your information. It’s great, if you’re getting a refund. It’s kind of stressful to see your tax to pay number grow, though. However, the refund/tax to pay information is important, so I’m glad it’s easy to see, even if I don’t like the number.

As you’re working through the form, if you have a question, there is usually a “More Info” link that will give you more information about a given subject. And as you start each section of the form, there is a link you can click to find out what paperwork you need to gather, before you fill out the form. This is incredibly useful if you are not doing your taxes in one sitting.

Also, as you enter your information and progress from section to section, TurboTax tells you what percentage of your return you’ve completed. It’s nice to know when you’re almost done inputting information.

And finally, I love the flag feature! As you’re working through TurboTax, if you realize you don’t have the information you need at that moment, you can flag that section, so you remember to come back to it later. Just hit the “Flags” button on the top right, choose to add a flag, give your flag a title and write a note, if you need to. You can come back to that section later, and your note will remind you of anything you need to remember.

TurboTax Guarantees and Audit Support

Maximum Refund Guarantee. If you find you get a bigger refund by using another tax preparation software, TurboTax will refund the money you paid to use TurboTax. People who use the free edition are entitled to $14.95 back, plus the cost of state fees, if applicable.

100% Accurate Calculations Guarantee. If you have to pay an IRS or state penalty, because of a TurboTax calculation error, TurboTax will pay the penalty and the interest.

Audit Support. Every TurboTax product comes with a downloadable Audit Support Center. The Audit Support Center explains what different types of IRS letters may mean, so you can decide what to do next.

Audit Defense. Audit Defense is available for an extra fee of $39.95 for individual tax filers. If you are audited, Tax Resources, Inc. will provide someone (not a lawyer) to represent you in communications to the IRS from the moment you receive notice of the audit to the completion of the audit. In order to use Audit Defense, you have to file your taxes on time, through TurboTax, and you have to purchase the Audit Defense membership before you receive notice of an audit.

My Opinion of TurboTax

My requirements for a good tax software are that it be:

  • Clear
  • Thorough
  • Guaranteed

TurboTax definitely lives up to all three. Like I said before, I’ve used TurboTax for the last three years, and I’ve been very happy.

Compared to the other main tax software player, H&R Block At Home, TurboTax is competitively priced for federal e-filing. In fact, for federal e-filing, the most common options of both programs (Deluxe & Premier/Premium) are priced identically. The difference in price for the most common software is found in the state filing fee. TurboTax charges $27.95 to file state taxes, if you use their free edition. If you use Deluxe, Premier, or Home & Business, you will pay $36.95. H&R Block At Home charges $29.95 to file state taxes, regardless of which level of software you choose.

Where the big difference between the two programs lies is in the software geared toward owners of small businesses, like me. TurboTax Home & Business is less expensive, at $74.95, but includes less support than H&R Block’s Best of Both at $99.95. Taking into account the price for filing state taxes, the difference comes down to less than $20. At that point, it’s a matter of preference. Extra support or $20? Your answer will depend on how confident you feel filing your own taxes.

Note: Brian, one of my readers, has graciously pointed out that if you shop around at local retail stores or on Amazon.com, you can find TurboTax for less than the price on the TurboTax website.



Author

By , on Feb 16, 2010
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.

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{19 Comments}

  1. CAnderson:

    I cashed out a 401(k) in 2009 and reported it in Turbo Tax. This amount shows up on my federal forms and the appropriate tax was charged. However, when the data transferred to my State (California) forms it put $0 in the box that should have had this dollar amount (even though the correct dollar amount shows up in the “federal” column right next to this box). I have just received a thousand dollar bill from the state of California because we did not pay tax on that amount (due to Turbo Tax not transferring the information to the right box). Boo Turbo Tax.

  2. Joseph Gotsens:

    Turbo Tax 2012

    In the Forms mode I cannot enter Schedule D data for stocks.
    Message: Create new copy. Form(s) 8949 are created automatically based on how capital tranaction(s) were reported to Taxpayer.
    What is this garbage? Where is the input screen for stocks? This is the first time I ever had this problem. I called up and got a work around but, it’s not too good. If you create a new tax report you must enter all the personal data again. They must love tedium! Using their automatic input is ridiculously slow and dull. I will have to try H&R Block to see if they are in the real world. I cannot recommend this junk to anyone.

  3. mark:

    TurboTax is the only tax software I’ve used, mainly because Vanguard Flagship clients can download it for free each year. And each year I encounter problems and frustrations that surprise me the TT engineers haven’t corrected them before release.

    This year my big problem was finding out how to enter K-1′s (form 1065) that have figures in more than one of the first 3 boxes. This isn’t unusual, many real estate investments require a figure in at least 2 of the 3 boxes. The instructions say to create separate K-1′s for each of them, but doesn’t explain how to do it. It took me hours of trial and error and reading help forums to figure out how to do it without seriously skewing my tax results. (My tax DOUBLED when I did it the way TT recommended way…an obvious error). No where in the instructions or the online help does it give a clear description of how to go about it. I’ll bet lots of folks waste much time figuring it out or probably don’t…and getting erroneous results. It was INCREDIBLY FRUSTRATING.

    If you encounter this problem, here is a page with the solution: https://ttlc.intuit.com/questions/dpGFUEDs8r4AgJeJfaacN5?legacy=true

    A further frustration is that it’s difficult to find where to download your data file after finishing your taxes. If you have to amend your taxes, you will be glad you saved it, or you will have to re-enter all your forms from your paper printout. TT encourages you to download a pdf of your tax forms and that’s all. They should make saving the data file a standard part of finishing your return. It’s a MYSTERY why they haven’t. I’ll bet every year this effects thousands of people who need to amend their returns. The way you do it is to “save as” from the file menu at the top of the page, and select the data option.

    Another issue is that TT makes it almost impossible to download your data file from the prior years online version. I finally found a way here: (http://blogs.computerworld.com....._data_back) there’s no rhyme or reason why they don’t have this same info posted for the other online versions. It works on other versions, but it says it’s only for the online free version.

    All in all, it may be the best tax software out there, but I’m amazed at the mistakes, the lack of thoroughness, and missing instruction on such a widely sold and expensive piece of software.

  4. Peter Miller:

    I just received a $1,610 Ohio income tax refund, expecting only a $110 refund. In checking I found I had made an estimated payment of $1,500 that did not appear in my Turbo Tax Ohio return. In further checking, I could not find a point in the Turbo Tax program where I was asked to enter this estimated tax payment. I don’t know how Turbo tax expects to find out about its software goofs, but I doubt its by soliciting complaints on its web sites.

  5. uNHAPPY21:

    “I got rejected. You guys never called me. I did not check my email. Now I pay late fees? I FILED ON TIME. You people should have called me if there was something wrong with my return. You took my money on time. You guys suck. I will never use you again. You even charged me to file state taxes when your service is supposed to be free. I will give you bad reviews everywhere I can. So that others will not waste their money.” IT WAS SUPPOSED TO BE FREE. BUT IT COST $90. AND IT DID NOT WORK. NOW OWE THE GOVERNMENT MONEY TOO. NEVER USE TURBO TAX. JUST SHOOT YOURSELF IN THE HEAD AND CALL IT A DAY.

  6. Tim:

    I think it was very misleading and shamefull showing the price of $39.95 and then charging my credit card $89.95. I will let this be known on every site I can possibly post to. I could have had someone else do them for that amount! I have always been a loyal customer and now you have lost a customer and as many people I can tell about my experience. Advertise as free and charge almost $90 is theft in my book.

    • Tiana:

      Absolutely agree, i was shocked that i was charged $90 it’s ridiculous. Absolute theft…guess they haven’t changed their ways

  7. Dan:

    I’ve used turbotax as well..good software!

  8. John:

    I tried turbotax premier 2010 CD and was greatly disappointed because the program would not correctly handle the gain from the sale of a vacation apartment. The apartment was sold for a profit in October 2010. After I sold the apartment I estimated the tax I owed on the sale and mailed the IRS a check in January 2011 which they cashed on January 18, 2011. When I entered information on the sale and the estimated tax payment, Turbotax prorated the estimated tax paid and entered 1/4th of the total estimated tax in each quarter. Since I made no payments in the 1st 3 quarters Turbotax calculated a penalty for each of those quarters, even though the estimated payment I made exceeded the amount of tax I owed by more than $3 thousand. I could override the penalty but when I did the software would not allow me to efile. I called the IRS and they verified there should be no penalty since a refund was due because I overpaid my taxes and no estimated tax is due until the gain is booked.
    After spending several hours trying unsuccessfully to deal with this problem, I decided to try an online program called TaxAct. It correctly handled the gain, did not assess a penalty and allowed me to efile my return.

  9. Holtz Bill:

    Your review is very good. I have a lot of experience with TurboTax and it does what it says it will do.

  10. Jim727:

    I have to agree with Steve.

    I have been using TurboTax for about 20 years. There was I time when I advised people that TTax alone was sufficient reason to buy a computer. No longer. With the latest incarnation Intuit has made it virtually impossible to maintain any personal privacy – this from a company who should be maintain the highest possible level of integrity wrt their customers’ most sensitive financial data.

    Reading the EULA makes it clear that they can no longer be relied upon to maintain the security of my data and the privacy rights of my family. Attempted installation of TTax 2009 confirms that the practices of Intuit are intrusive and unacceptable.

    To top it all off, when you buy the package (I have Premier Fed and State), there is no way to get the state modules without going online and compromising your local security software. It’s clear that Intuit’s direction is toward trying to force users into the online tax prep service. There is no reason why tax prep can’t be done with software local to the taxpayer’s personal computer – forcing the movement of sensitive personal/financial information toward Intuit’s servers only makes sense if they plan to tap into it (Intuit?) for profiling and marketing purposes.

    RIP TurboTax. You were once great but no longer trustworthy.

    Sad.

  11. Steve Thompson:

    I am a biz owner and software developer. I need a tax software product to do my tax returns. I tried TurboTax for Business only to find out that it absolutely has to be installed on the “C” drive of a Windows system. Intuit doesn’t tell you that in advance. They also don’t tell you that their system “phones home” and provides them with data you might not want given to third parties, which they “give” to third parties (check out the .rtf file on the CD). But it doesn’t do this if you are running a Mac!

    While most people may not understand why someone would build a system with a very small “C” drive, the fact is, I have been doing this for more than 10 years. And Intuit will not assist you in this matter. In fact, I know how to change the install to put TT where I want it. And the program is set up to recognize that it is not on the “C” drive and delete itself!

    Good software sometimes has warts that are show stoppers. And none of this is spelled out on the box when you buy it.

  12. Denise:

    I love TaxAct. I think Turbo Tax charges way too much. TaxAct asks the same questions that Turbo Tax does, but costs half as much. To file state and federal is only $17.95. I’ve used them for the past three years and have recommended them to friends and family. Now they use them too.

  13. I love TT – but we use the free simplest form [same state, one job, don't itemize]

    I was happy to see I didn’t HAVE to use [and thus pay] for the state return. I just took all the numbers from my TT Fed and used it on my state [our state is easy].

    Thanks for the heads up on other things tho’ because next year it all changes – itemize AND we will live in one state work in another.

  14. Thanks for the review, including Brian’s information about prices. We need to do business taxes this year for the first time — I’ve always used TurboTax online up until last year. There was some snafu with the online version when our taxes were filed, resulting in an extra $2000 refund to us! It turned out to be a flaw in the online version, so TurboTax gave us a free download of the software.

    As a postscript, the IRS was very happy to give us the information to return their money. And no penalties, so it all worked out in the end. Great support from Turbotax and some pleasant people at the IRS made the whole nerve-wracking incident much better.

  15. Diana:

    In my opinion, the canned tax packages can be great if you have a very simple return. These packages go through lots of questions that may help you realize deductions of which you are unaware.

    Take caution however, and remember these packages often only offer refunds in regards to the outcome of their package versus another.

    If you have a complex return or are a small business owner with something such as an S-Corp or partnership, it may behove you to have a CPA prepare your return. A CPA specializing in tax can navigate through complexities and other matters missed by canned software.

    As a currently-licensed CPA, I have no agenda for this advice. I have not been involved in tax prep for more than 15 years. Given that, when folks ask me for tax advice on complex matters (happens frequently just because I’m a CPA), I recommend they contact a CPA who specializes in taxes. Just saying.

  16. Brian:

    I made this same comment on another PF blog talking about TurboTax. You have links to the TurboTax website and I just wanted to mention that you can get all of these way cheaper at Amazon.com or even Walmart, Staples, Target, etc. Buying direct from the TurboTax website is the most expensive way to go. Amazon.com even sells a download for less than the hard CD copy. I use TurboTax every year and I never buy from the TurboTax website.

    People might also want to check with their banks and brokerage houses as some have a deal/reduced rate for TurboTax thru their websites (e.g. Vanguard, State Farm, BOA, etc).

    For example, I got a hard copy of TurboTax Deluxe from amazon.com for $48.99 including shipping instead of the $66.90 that you quote above for federal and state returns. I could have gotten it even cheaper if I had chosen a download version.

    I just went and checked at it’s priced at $44.99 right now (with free shipping) and $42.74 for the download.

    I really like your blog and I read it all the time. However, I’m not trying to be mean, but this kind of seems like a paid post especially since the only links and prices you give are direct to the TurboTax website, which in my experience has the HIGHEST prices for the software when I looked this year.

    I think it would be helpful for the readers of your blog to know where they can get this software at the most bang for their buck!

    • Lynnae:

      Thanks for the info! Since this is a review post and not a “How to get the best price on TurboTax” post, I didn’t research the best place to buy and instead chose to link back to the official site. But since you’ve done the research, I will add your info to the post, so other readers can find it.

  17. Stacie:

    I love turbotax and have used it for almost as long as I’ve been doing taxes. I love how easy it is to use and there’s no math involved! It really keeps things straight and organized for me. That being said, I had one problem I did not anticipate this year. Due to an unusual circumstance, I have to file taxes in another state this year in addition to the one we live in. I never had to do this before and don’t anticipate doing it again for many years. We decided, since the taxes for the state we live in are so easy and straight forward we would do those ourselves on paper, and since we buy the version of TT with one state included, we would use that to do the state we don’t reside in. However, during the updates phase of installing TT it must have gotten our old return information from the computer (that’s fine, I’d want that anyway) and then gotten the state program from our state of residence and installed it during the update phase, without asking for conformation or permission. Yikes! Now, to do the non-residence state I need to purchase an additional state. (I have yet to but will call TT to confirm that this is my only recourse.)

    Anyway, That’s the only glitch I have ever run into with TT and I’m not sure where the problem originated, though i don’t recall it asking what state I wanted. Other than that, I love TT!

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