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TurboTax Review 2022 – Is It the Best Online Tax Preparation Software?


FEATURED PROMOTION

Turbotax

Our rating

4.0/5

Pros

  • thumbs-upComprehensive customer service
  • thumbs-upEasy transaction importing
  • thumbs-upGreat hands-on help with TurboTax Live

Cons

  • thumbs-downMore expensive than some competitors
  • thumbs-downFree plan is for simple situations only*
  • thumbs-downPrices jump as the filing deadline nears

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TurboTax is one of the most popular online tax preparation and filing software programs in the United States. Major TurboTax competitors include popular online tax filing software like H&R Block, TaxAct, eSmart Tax, and TaxSlayer.

I’ve personally used TurboTax to file my taxes in the past. Its free filing package has long been one of the best free tax filing options around. That was my go-to before freelancing rendered my tax situation too complex, and it’s only growing more robust.

That’s not to say that TurboTax is perfect. Its interview-based filing process is highly intuitive, and the mobile-friendly platform is a snap to use. But it’s pricier than most competitors and requires people with even modest tax situations to upgrade to more expensive plans. It also isn’t the fastest service I’ve ever used.

Is TurboTax right for you? Learn more about the platform’s features, capabilities, and overall suitability for your tax preparation needs to find out.

DIY, Live, Live Full Service

TurboTax Services: DIY and TurboTax Live

TurboTax has two primary services: do-it-yourself and TurboTax Live. TurboTax Live is further divided into standard TurboTax Live and an even more robust option called TurboTax Live Full Service, which is totally hands-off for filers.

DIY Options

Many TurboTax filers begin by choosing from one of four DIY plans. 

The DIY platform uses an interview-style process in which your answers to a series of simple questions help it evaluate your tax situation. Based on your answers, TurboTax determines which forms and schedules you need to successfully complete your return.

If TurboTax recognizes that you require a form or function that your current plan doesn’t support (such as itemized deductions or self-employment income), it automatically prompts you to upgrade without losing the information you already entered.

If you opt for a paid plan, you don’t have to pay until you file.

TurboTax Live (Standard)

If you need more prep assistance than TurboTax’s DIY resources can provide, TurboTax Live is right for you.

Standard TurboTax Live is a hybrid product that pairs you with credentialed tax experts for on-demand assistance during the prep and filing process. The tax expert appears by video on a split screen next to your tax prep interface so you can follow along with them and take suggested actions in real time.

All TurboTax Live packages include thorough line-by-line reviews prior to e-filing. When you complete your return with TurboTax Live, your tax expert signs your return before sending it off to the IRS.

All paid DIY TurboTax packages are available as a Live package at a higher price point. The lowest-priced standard TurboTax Live package costs about $80. The highest-priced plan costs about $220.

TurboTax Live Full Service

If you prefer a truly hands-off tax prep experience and are willing to pay for it, choose TurboTax Live Full Service. 

With TurboTax Live Full Service, your only obligation is to gather all relevant tax documents and upload them securely to TurboTax. The system takes it from there, assigning your file to an expert tax preparer who prepares your return. 

If any questions arise, they’ll reach out to you, and you can check their progress through your TurboTax account. Otherwise, they’ll reach out when they’re done to go over your return and ensure it’s accurate. If it’s all good, you sign, file, and pay.

TurboTax Live Full Service plans start around $200 and range up to about $400.


TurboTax DIY Plans and Pricing

TurboTax’s four DIY plans each apply to specific tax situations, with pricing that reflects their capabilities. You can always start with the Free Edition and wait for TurboTax to prompt you to upgrade if your situation requires it.

1. Free Edition

This plan offers free federal and state tax returns. Since it doesn’t support most schedules, it’s only appropriate for very simple tax situations* — no itemized deductions, rental property income, or stock sales, for instance.

The Basic plan, a TurboTax Live-only option, is very similar to the free plan. A special deal that extends free TurboTax Live support to Free Edition filers may be available early in tax season.

  • Prior-Year Return Importing. You can import last year’s tax return in PDF form from TurboTax or any other tax prep provider. Just convert to PDF if your return was in another format previously.
  • W-2 Importing. The Free plan allows you to import as many W-2s as you need and record all W-2 income. That’s particularly useful if you have more than one job.
  • Earned Income Tax Credit. If you’re eligible for the earned income tax credit, the Federal Free edition lets you file Schedule EIC.
  • Affordable Care Act Forms. This edition also lets you file any forms related to the Affordable Care Act and can help you determine whether you qualify for subsidies to purchase health insurance under the act. 
  • Credit and Deduction Checks. As you fill out your return, TurboTax asks targeted questions that determine whether you qualify for particular tax credits and deductions. If you qualify for enough deductions, it advises you to itemize your deductions rather than take the standard deduction. However, the Federal Free edition doesn’t support itemized deductions, so you need to upgrade to a paid plan (Deluxe or better) to go this route.
  • Peer Support. TurboTax’s extensive peer help resources include a knowledge base with thousands of TurboTax-approved questions and answers, a set of forums where TurboTax users swap advice and insights, and short help videos with answers to common tax questions.

The Free Edition is totally free for federal filing. If you need to file multiple state returns, you may need to pay a fee for your second and any additional.

*For simple tax returns only. See if you qualify.

2. Deluxe

Deluxe is ideal for filers with more complex tax situations, such as those involving itemized deductions and some miscellaneous income. It comes with all the features and functions found in lower-priced plans, plus:

  • Itemized Deductions. If it makes financial sense to itemize your deductions, a determination that TurboTax can help you make, you must file Schedule A. The Deluxe package offers all the support necessary to do so.
  • Support for Miscellaneous Income. If you earned miscellaneous income (indicated on Form 1099-MISC), TurboTax Deluxe allows you to log it in your return. You can log unlimited 1099s with the Deluxe plan.
  • Access to All Previous Tax Returns. Deluxe customers have access to all previous tax returns filed with TurboTax as well as all user data tied to their TurboTax accounts.

The Deluxe Plan costs about $40 for your federal return and $40 for each state return. 

3. Premier

TurboTax Premier offers support for most common schedules, including B, D, and E, so it’s appropriate for filers with investment income, rental income, and other forms of nonwage income.

This plan comes with all the features and functions found in lower-priced plans, plus:

  • Interest and Dividend Income. If you have more than $1,500 in ordinary dividend or interest income, you may need to file Schedule B. TurboTax Premier provides all necessary forms and support, including checks for relevant credits and deductions.
  • Stock Sales and Other Capital Gains. TurboTax Premier can help you file Schedule D, which covers capital gains or losses from the sale of securities, real property, and other assets, and walk you through relevant credits and deductions. You can automatically import transaction records from your brokerage, potentially saving lots of time over entering each transaction manually. TurboTax automatically calculates your cost basis for multipart transactions as well. TurboTax offers support for cryptocurrency investors as well.
  • Rental Property Income. If you’ll be reporting income from rental properties or pass-through entities (such as S-corporations, trusts, estates, and certain types of partnerships), you need to file Schedule E. TurboTax Premier provides all necessary forms and can walk you through all appropriate credits and deductions.

The Premium plan costs about $100 for your federal return and $40 for each state return.

4. Self-Employed

With full support for all credits and deductions related to Schedule C, Self-Employed is ideal for freelancers, solopreneurs, and small-business owners. TurboTax Self-Employed comes with all the features and functions found in lower-priced plans, plus:

  • Full Support for Self-Employed Filers. If you’re an independent contractor, sole proprietor, or consultant, you may be liable for self-employment tax. If so, the IRS requires you to file Schedule C or Schedule C-EZ. This plan provides full Schedule C support, including all applicable business credits: vehicle mileage, phone expenses, home office deductions, and more. You’ll get customized advice on industry-specific business tax deductions too.
  • One-on-One Help From Self-Employment Specialists. Even if you don’t upgrade to TurboTax Live, you’re eligible for one-on-one help from TurboTax’s in-house self-employment experts with this plan. If you get stuck prepping your return or have a question about a particular deduction, they’re here to help.

The Self-Employed plan costs about $110 for your federal return and $40 for each state return.

A Note About Pricing and Guarantees

Be aware that TurboTax customarily raises its prices in March, so if you want to lock in the pricing indicated above, it’s best to file early.

It’s worth noting that, regardless of the plan you select, TurboTax guarantees the accuracy of its calculations. If it’s responsible for any errors that result in an IRS penalty, TurboTax promises to pay the penalty and any associated interest costs.


Additional Features

TurboTax has a slew of additional features available across all verticals and packages. Most don’t cost anything extra out of pocket.

Mobile Apps

TurboTax has slick, user-friendly mobile apps for both Android and iOS devices. The apps have all the critical features and functions of the main website, which is pretty mobile-friendly in its own right.

Pay Filing Fees With Your Refund

Regardless of which plan you use, TurboTax lets you pay your filing fees with your federal refund. The charge is usually rather steep (and subject to change depending on your filing date and plan).

Real-Time Refund Display

TurboTax calculates your estimated federal and state refund in real-time, visible in the upper left corner of the interface. As soon as you enter a new piece of information that affects your tax liability, this number changes to reflect it.

Automatic Information Transfer to State Returns

If you need to file a state return after completing your federal return, TurboTax automatically transfers all relevant information to the state forms. That cuts down on tedious, redundant entering of basic information on two different sets of forms.

Audit Support

This free feature is available to all TurboTax customers, regardless of plan. It includes a free phone consultation with a tax professional, during which you can ask open-ended questions about any IRS correspondence you’ve received.

However, if you’re worried about actually being audited, TurboTax recommends purchasing MAX, a more hands-on package, when you file.

MAX Benefits Package

If you’re worried that your audit risk is elevated, you can purchase TurboTax’s optional MAX bundle as an add-on to any plan before completing your return (you can’t buy it after the fact). 

MAX covers all state and federal returns in a given tax year. It costs a bit more than the early-season price for the Deluxe plan, though TurboTax reserves the right to change the price at any time.

MAX’s signature inclusion is Audit Defense, which activates if you’re audited by the IRS (and you notify TurboTax about it). Audit Defense provides access to a tax professional who reviews and interprets all IRS correspondence, schedules all audit-related appointments, and helps you gather any documents necessary to respond to your audit.

MAX also includes:

  • Identity theft resolution, which helps mitigate the damage if someone files a fraudulent tax return in your name (a common form of identity theft)
  • Priority Care, which expedites your access to TurboTax’s on-staff tax professionals whenever you call in with a question about your return (or any issue that arises after you file)
  • Identity loss insurance, which may offset direct financial losses (up to $250,000) and legal fees (up to $1 million) related to identity theft
  • Ongoing identity theft monitoring, which may reduce the likelihood of identity theft and prevent recurrences
  • Identity loss insurance, which provides reimbursement of stolen funds, legal fees, and other expenses incurred due to identity theft

Military Discounts

Active-duty military members and reservists qualify for several different discounts with TurboTax.

Service members classified E1 through E5 can file federal and state taxes for free using the Federal Free or Deluxe plans or take $5 off federal filing costs under more expensive plans. Those ranked E6 or higher can take $5 off federal filing costs under any plan.

These discounts are subject to change or discontinuation at any time.

Turbo Prepaid Visa Card

You can elect to receive your tax refund on a Turbo Prepaid Visa Card, a reloadable prepaid debit card backed by Intuit.

Moving forward, you can set up payroll direct deposit or make manual transfers to juice your card balance, making Turbo Prepaid Visa Card a great credit card alternative for those with poor credit or aversions to credit cards.

Bear in mind that certain card actions incur fees and charges. Before signing up, review the card’s terms and conditions for important information about the product.


Advantages of TurboTax

TurboTax has a lot going for it, from great customer service to useful tools that make preparing complex tax situations easier. 

  • Comprehensive Customer Service and Peer Support Resources. TurboTax’s customer support system, anchored by a vast peer support network and a well-staffed phone support hotline, is impressively robust. I’ve never had a question I couldn’t answer by searching through TurboTax’s knowledge base and peer forums, and I’m usually the type of person who prefers a back-and-forth conversation. 
  • Military Discounts Are Better Than Some Competitors. TurboTax offers discounts or completely free filing options to certain active-duty and reserve military members. Specifically, lower-ranked enlistees qualify for a free upgrade to TurboTax Deluxe. These deals are better than those offered by competitors that don’t offer free upgrades for lower-ranked enlistees.
  • Automatic Transaction Importing and Cost Basis Calculation. If you have a brokerage account, you can quickly and easily import a complete transaction record for the previous tax year by selecting “Add Other Documents” from the Import Summary menu in your TurboTax interface. You don’t need to download a PDF or any other file type — the importing is automatic. If you made lots of securities trades during the year or simply don’t like the tedious process of entering each transaction individually, it’s a big help.
  • Ideal for Mobile Users. With a mobile-responsive website and apps for iOS and Android, TurboTax is ideal for filers who prefer to use mobile devices. Though the tax prep space has by and large grown more mobile-friendly in recent years, some laggards remain — notably, eSmart Tax and FreeTaxUSA aren’t nearly as mobile-friendly. Both have cluttered text and navigation systems that are difficult to navigate on a touchscreen.
  • TurboTax Live Is Great for Filers Who Need More Help. Even if you’re not a small-business owner, the ability to connect with a tax expert on demand is a big confidence-booster. Though Live packages are more expensive than their DIY counterparts, the service is still substantially cheaper than traditional independent tax preparers.

Disadvantages of TurboTax

As robust as the platform is, consider these drawbacks before using TurboTax to prepare your federal tax return this year.

  • More Expensive Than Most Competitors. Of all the major online tax filing programs, TurboTax’s sticker prices are the highest, ranging up to $200 for a single federal return close to deadline day. By contrast, comparable paid plans from TaxAct cost about half as much without compromising on any features, forms, schedules, or support. TaxSlayer’s paid plans are even cheaper.
  • High Processing Charge When You Pay Filing Fees With Your Federal Refund. If you opt to pay your TurboTax fees with your federal refund, the company charges a stiff processing fee. By contrast, TaxSlayer doesn’t charge any processing fees when you pay with your refund.
  • Many Forms and Schedules Unavailable With the Free Plan. TurboTax’s Federal Free edition can only handle relatively straightforward tax situations. It’s not ideal for filers who wish to itemize deductions, pay self-employment tax, or report investment income or losses. If any of those situations apply to you, you need to upgrade to a paid plan.
  • Prices Usually Jump a Few Weeks Before the Filing Deadline. TurboTax’s paid plan prices usually jump by 50% or more about a month before the mid-April filing deadline. For instance, the Deluxe Plan’s federal return cost rockets from $40 to $60. That’s a major inconvenience for people who wait until relatively late in the game to file their taxes. And it’s a potential deal-breaker for people with complicated tax situations, who sometimes don’t have all forms in hand until late March.

How TurboTax Stacks Up

TurboTax is one of the best-known tax prep products around, but it’s not the only option. This chart shows how it stacks up against H&R Block, perhaps its biggest direct competitor.

TurboTaxH&R Block
Free PlanYes, for simple situations only*Yes, for simple situations only
Expert AssistanceYes, starting at about $40Yes, free online for simple situations; starting at $80 for more complicated situations
Pay With Your Refund?Yes, for a feeYes, for a fee
Cost for Self-Employed FilersAbout $85 and upAbout $110 and up

*For simple tax returns only. See if you qualify.

Final Word

Most people don’t have the luxury of trying multiple tax prep options during tax season. No matter how smooth the filing process or straightforward the tax situation, there’s simply not enough time to do anything other than pick a known quantity and tough it out.

That might partially explain why TurboTax remains so popular. For all its faults, it enjoys enviable brand recognition. In a competitive industry serving time-pressed customers, it’s easier to go with what you know than stray too far afield.

That’s not to say that TurboTax doesn’t shine on the merits — just that if you’re looking to go with what you know, it’s hard to beat TurboTax.

Turbotax

Our rating

4.0/5

Pros

  • thumbs-upComprehensive customer service
  • thumbs-upEasy transaction importing
  • thumbs-upGreat hands-on help with TurboTax Live

Cons

  • thumbs-downMore expensive than some competitors
  • thumbs-downFree plan is for simple situations only*
  • thumbs-downPrices jump as the filing deadline nears
Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

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