TurboTax is a convenient software solution that makes filing federal and state taxes easier and less expensive than traditional tax agencies. The company is known for having a user-friendly interface that is simple to use, and provides helpful tax guidelines.
Pros
- Easy to use
- Educational
- Mobile friendly
Cons
- Free plan doesn’t offer everything
What is TurboTax?
TurboTax is a tax software that uses an interview-style process to help you file your taxes. The software collects your answers to various questions, and evaluates them to determine exactly which forms to include in your return. TurboTax offers a variety of products, including the Federal Free Edition, Plus, Deluxe, Premier, and Home and Business package. When you first visit the TurboTax website, the website will have you fill out a few simple questions to determine which product is best for your situation. For the best recommendation, you can choose from a few different options, such as: single status, have children/dependents, own a home, self-employed, etc.
- Federal Free Edition. This package is ideal for simple tax returns.
- Basic. This package is helpful in providing step-by-step guidance, and includes 5 federal e-files. State costs are additional. (Usual price: $39.99)
- Deluxe. The Deluxe package is the most popular, and is ideal for maximizing tax deductions. It includes 1 state download and 5 federal e-files. (Usual price: $69.99)
- Premier. The Premier package is best for investments and rental property. The package includes 1 state download and 5 federal e-files. (Usual price: $99.99)
- Home and Business. If you are a small business owner or if you are self-employed, the Home and Business package is best for you. This package includes 1 state download and 5 federal e-files. (Usual price: $109.99)
Who is TurboTax for?
If you are looking for a DIY way to do your taxes, TurboTax could be an ideal solution for you. While it may not be the cheapest DIY tax program on the market, it is a high quality software option that generally produces accurate and quick results.
TurboTax is for anyone and everyone. Whether you are married, have kids, are self-employed, or more, TurboTax can help. Though it is more of a DIY way to do your taxes, TurboTax still offers many resources to help along the way.
TurboTax Features
- Easy to use. Many customers claim TurboTax is easy to follow, and is laid out clearly. To start out with the software, all you have to do is answer simple questions, and TurboTax will generate the correct forms that you need. With TurboTax, you can prevent yourself from having to do duplicate work; In fact, the software can transfer your federal tax return information to your state tax return.
- Educational. TurboTax teaches you as you go, and will show what credits you qualify for and how the deductions will affect you.
- Helpful resources. In addition to the vast amount of online written resources, you can also take advantage of CPAs, tax attorneys, and enrolled agents who are happy to help via phone call.
- Deductions. TurboTax will discover which deductions you qualify for, ultimately leading to a better possibility of saving more money in the long run. It can tell you which deductions are associated with family, running a small business, donations to charity, education, and more.
Benefits
- Mobile friendly. TurboTax is mobile-friendly. The mobile app is available on both IOS and Android devices, and is easy to navigate. Additionally, the app offers almost all of the features you can take advantage of on the computer. It even lets you submit some forms by taking a picture of them by phone.
- Military discount. If you are a service-member, you can expect some kind of discount on your taxes. With TurboTax, you may qualify for at least a $5 discount in fees. If you are a lower-rank enlistee, you may even qualify for a free upgrade to TurboTax Deluxe.
- Accuracy. TurboTax guarantees 100% accurate calculations, and claims to double check all tax returns.
- Pay nothing. You can choose to pay nothing out of pocket by using your federal refund to pay for TurboTax.
What to watch out for
- Limited. TurboTax is somewhat limited in the tax solutions it can help with, in that it primarily works with simple tax solutions.
- Cost. TurboTax is not completely free. There is a free plan with limited features, but the rest of TurboTax’s plans do cost something. When you are deciding whether or not to go with TurboTax, it is important to know that prices increase as the tax filing deadline gets closer, sometimes by even 50%.
- Free plan doesn’t offer everything. Additionally, some forms are not available through the Free plan. The Free plan does not include Schedules A, C, D, E, H, or K. If you are planning on itemizing deductions, or if you have to pay self-employment taxes, you may want to look into the other plans.
How do I use TurboTax?
To figure out which tax forms you need, TurboTax will have you fill out simple questions. The software kind of works in an interview fashion, where the questions you answer determine which tax forms you need. As you answer questions, TurboTax will learn more about your financial tax situation. You can choose to edit or delete forms you have completed by using the software’s helpful icons. TurboTax differs from many competitors in that it lets you advance through screens without fully completing a page. If there is missing information, you can still advance and come back later. At the end, the platform should tell you if you are missing information.
About TurboTax as a company
TurboTax was developed by Michael A. Chipman of Chipsoft. Chipsoft was acquired by Intuit in 1993, and is based in San Diego. TurboTax was created by Chipman in the mid 1980’s, and was originally named MacinTax. Along with H&R Block, TaxAct, and TaxSlayer, TurboTax is now one of the leading and most popular income tax preparation softwares.