At a glance
- Tax Expert Involvement: Tax expert support available by phone with most plans and with TurboTax Live.
- Plans: Free Edition for simple situations (including EITC); Deluxe for moderately complex situations; Premier for investors and landlords; Self-Employed for small-business owners and others with complex situations.
- State Returns Included: Free with Federal Free Edition only; extra cost for each state return with all other plans, depending on plan, filing date, and TurboTax Live status.
- Pay With Your Refund: Yes; variable service fee usually applies.
- Audit Defense: Yes; complimentary audit assistance available to all users at no charge. The MAX plan includes audit defense (representation) for an additional fee.
- Mobile Capabilities: Yes (Android and iOS apps with extensive functionality).
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 such as 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. Though its interview-based filing process is highly intuitive and the mobile-friendly platform is a snap to use, it’s pricier than most competitors and requires people with even modest tax situations to upgrade to more expensive plans.
I’ve encountered sporadic technical issues in the past that hampered the filing process and overall experience, too. And though I’ve never gotten a bigger refund from another program, TurboTax isn’t the fastest filing service I’ve ever used.
Plans, Pricing & Features
TurboTax‘s default is an interview-style DIY process that uses your answers to a series of simple questions (such as “Do you have any children or dependents?”) to evaluate your tax situation and determine which forms and schedules you need to successfully complete your return.
Many TurboTax filers begin by choosing from one of four DIY plans. If during the prep process TurboTax recognizes that your return requires a form or function that isn’t supported by your current plan (such as itemized deductions or self-employment income), it automatically prompts you to upgrade without losing the information you’ve already entered.
If you opt for a paid plan, you don’t have to pay until you file.
If you need (or prefer) more prep assistance than TurboTax’s DIY resources can provide, TurboTax Live is right for you.
TurboTax Live is a hybrid package that pairs filers 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 DIY TurboTax packages, save the free version, are available as a Live package, just at higher price points.
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 below, 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.
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 make sure to 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 also allows you to record all W-2 income. This is 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. Bear in mind that the Affordable Care Act remains in flux, with the U.S. Department of Health and Human Services periodically rolling out new rules that affect the act’s enforcement and the U.S. Congress curtailing aspects of it (such as the individual mandate, which was effectively repealed by the Tax Cuts and Jobs Act of 2017). Check with the IRS for up-to-date information about your responsibilities and obligations under the current statutory and rulemaking regime.
- 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, you’ll be notified that you should 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 and maneuvers.
- SmartLook. SmartLook is a free, live tool that lets you chat and screen share with a TurboTax support representative in real-time. On the desktop version, it’s accessible through the Contact tab. On the mobile app, hit the question mark icon, then “Connect with an expert.” Once you’re in the SmartLook feature, you’re prompted to enter your question, then paired with a rep qualified to help.
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’ll need to 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.
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 multi-part transactions as well. New for the 2018 tax year, 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 for doing so and can walk you through all appropriate credits and deductions.
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. TurboTax Home & Business 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.
- Complimentary QuickBooks Self-Employed Membership. If you use TurboTax Self-Employed to complete your return by the annual filing date, you’ll get a one-year complimentary subscription to QuickBooks Self-Employed. To maintain your free subscription through the entire year, you’ll need to activate and access your account within three months of filing. QuickBooks simplifies mileage tracking and other deduction-related recordkeeping, relieving solopreneurs of bookkeeping headaches throughout the year, so it’s definitely worth pursuing this promotion.
Additional TurboTax features available across all packages include:
TurboTax has slick, user-friendly mobile apps for both Android and iOS devices. The apps have all the important 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. This cuts down on redundant, tedious entering of basic information on two different sets of forms.
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.
Active-duty military members and reservists qualify for several different discounts with TurboTax.
Servicemembers classified E1 (private trainee) through E5 (sergeants and petty officers) 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 (staff sergeant or petty officer first class) 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
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.
Here’s what TurboTax has going for it.
1. 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 that couldn’t be answered 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.
That said, TurboTax’s phone support is impressive too, with short wait times (less than 10 minutes every time I’ve called, though I’ve never waited until crunch time to do my taxes). And for filers who want quick answers to complicated issues without picking up the phone, the SmartLook screen share/chat feature is a lifesaver.
2. 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.
3. 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, this is a big help, though transaction limits do limit its utility for active day traders. Still, some cut-rate TurboTax competitors require you to enter transactions manually and separately.
4. Ideal for Mobile Users
With a mobile-responsive website (bright colors, clean navigation, large-font text, and minimal clutter), as well as 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.
5. 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 in-person tax prep, which can cost as much as $500 with well-known providers such as Liberty Tax.
If you don’t want to hire an independent tax expert or use one of the in-office prep services, it’s a great compromise.
Consider these drawbacks before using TurboTax to prepare your federal tax return this year.
1. 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.
And state filing fees at those competitors are comparable to or less than TurboTax’s, which clock in at up to $55.
2. 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 – essentially, for the convenience of avoiding out-of-pocket filing fees. By contrast, TaxSlayer doesn’t charge any processing fees when you pay with your refund.
3. Many Forms and Schedules Unavailable With the Free Plan
TurboTax’s Federal Free edition can only handle relatively straightforward tax situations. Since it doesn’t support Schedules A, C, D, E, H, or K, 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.
4. 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 a potential deal-breaker for people with complicated tax situations, who sometimes don’t have all the requisite forms in hand until a few weeks before the filing deadline.
Most people don’t have the luxury of trying out 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 benefits from immediate name recognition and has a first-rate customer support infrastructure. Its website and interface look great and boast superior mobile functionality. Automatic transaction importing and cost basis calculations are great for more advanced tax situations too. Hands-on tax expert support through TurboTax Live is ideal for filers who can’t or don’t want to go the all-DIY route.
However, TurboTax is a bit pricey, suffers from frustrating website errors, and doesn’t offer a refund bonus. And the misleading setup for free filing customers might give you pause.