If you’re investigating tax software, TurboTax is an excellent option to start with. It’s the most popular tax preparation software available, which speaks volumes about its quality. But one of the reasons why it’s the most popular is because it’s so easy to use. Even if you’ve never prepared an income tax return yourself, you can do it with TurboTax. There’s nothing intimidating about the software — it’s totally user friendly.
I’ve been using TurboTax to prepare my own tax returns for the past several years, so I feel strongly that this is the go-to tax preparation software package.
TurboTax is the most popular tax software, likely because it has so many different options, and can deal with even the most complicated tax situations. The software is incredibly easy to use that works using a basic question-and-answer format, and there are abundant resources for any questions you have.
- Options for every return
- Easy to use
How does TurboTax work?
TurboTax works using a basic question-and-answer format. It breaks down each section of your return sequentially — general information, tax filing status, income, deductions, and credits.
Only when you’re completely satisfied that the information is accurate will you actually file your return. In addition to e-file filing your return, TurboTax also enables you to save and print copies for your records.
Once you e-file your return, TurboTax will notify you by email that it has been accepted by the IRS. This usually happens within one or two days, but it could even be an hour or so. They also offer a “Where’s My Refund?” tool that enables you to track the progress of your refund.
Pros & cons
ProsTurboTax Self-employed and Premier are now apparently under Premium umbrella.
- Options for every return — It offers a software plan even for the most complex tax return.
- It’s easy — Probably the easiest filing you’ll ever do.
- W-2 — There’s a W-2 upload option.
- Cost — The pricing is higher than competing tax software.
TurboTax has multiple plans with different levels of tax support.
- File Your Own Taxes (DIY) – Access to the software and tech support, but no access to a tax professional if you have questions about your taxes
- Live Assisted – Includes unlimited access to a tax expert to answer any tax questions you may have
- Live Full Service – A TurboTax expert does your taxes for you
It’s important to note that you don’t pay until you are done with your taxes and ready to file. So you can start with the cheapest plan and upgrade as you go if needed.
|DIY||Live Assisted||Live Full Service|
|TurboTax Free Edition
For simple tax returns only. Not all taxpayers qualify.
|$0 for federal, state included||Basic: $99, state additional||Basic: $219, state additional|
|TurboTax Deluxe||$69 for federal, state additional||$139 for federal, state additional||$269 for federal, state additional|
|TurboTax Premium||$129 for federal, state additional||$219 for federal, state additional||$409 for federal, state additional|
TurboTax Free Edition
TurboTax Free is for simple tax returns only and not all tax payers will qualify.
To qualify for the free edition your taxes can include:
- W-2 income
- Limited interest and dividend income
- Standard deduction
- Child tax credits
- Earned income tax credit
TurboTax Free Edition features
- Snap. Tap. Done. You can input your W2 information by snapping a picture with your mobile device or you can use the automatic download feature enabling you to import W2 information from many large employers.
- 50% done in a click. If you filed with TurboTax last year, your information will automatically be transferred to this year’s tax return. You can also import a PDF file of last year’s return from other major tax preparation services.
Deluxe is designed for filing Form 1040, including itemized deductions and business income if you don’t have expenses. This means it’s good for homeowners and those who want to itemize. However, it cannot be used if you’re self-employed or have rental properties.
TurboTax Deluxe features
TurboTax Deluxe comes with all the features of the Free Edition, plus some more:
- Deduction Finder. TurboTax will help you find the deductions you qualify for.
- Includes tax credits for dependents such as the Child and Dependent Care Credit, the Earned Income Tax Credit, and Child Tax Credit.
Bringing together the same features and benefits of TurboTax Premier and TurboTax Self-Employed, TurboTax Premium is for investors, rental property owners, freelancers, gig workers, and the self-employed to seamlessly and accurately report income.
- Easy filing
- Find industry-specific deductions
- Personalized tips to maximize your tax outcome
- Higher price point
- Searches 500 deductions and credits
- Covers rental property income and tax deductions
- Great for stocks, crypto, bonds, ESPPs and more
My experience using TurboTax
I’ve been using TurboTax to prepare my tax return and several others for the past few years. Having used professional-grade tax software, TurboTax stacks up as being comparable in capabilities, but a good bit more user friendly.
You don’t need to have any experience preparing taxes, because the program will guide you through the entire process. Even on the most complicated returns, you’ll have access to everything you need to get the job done.
TurboTax is just one step short of having a tax expert prepare your tax return. And in fact, if you add the TurboTax Live Assisted feature to your plan, you’ll have live access to a tax expert to help you prepare your return. The main difference is that it will cost hundreds less than you’ll pay for an independent tax expert.
100% Accurate Calculation Guarantee
If you pay a penalty to the IRS or your state due to a TurboTax error, TurboTax will pay both the penalty and interest.
With each edition, there is an additional option for preparing and filing your state tax return. Paid versions start at an extra $54 per state.
Audit Support Guarantee
Each TurboTax return entitles you to free one-on-one audit guidance from a trained tax professional. They won’t represent you in the audit, but they can explain the issue and help you prepare for it.
If you need direct representation, you can purchase TurboTax’s Audit Defense feature. It will be like having a tax professional in your corner. Audit Defense is available at an additional cost. This service is provided by a third party service called “TaxAudit”. You can learn more about the service here.
If you’re a QuickBooks user you can import information directly from QuickBooks into TurboTax. It will simplify both documentation collection and tax preparation, particularly if you’re self-employed or have rental real estate.
TurboTax military benefit
TurboTax Online offers free filing options for enlisted, active duty military and reserve members.
Who is TurboTax good for?
Those with somewhat complicated taxes
TurboTax will work best for taxpayers who have a tax situation that ranges between moderately complicated and very complicated.
The Premium version is specifically designed to help those with significant investment activities or small businesses.
Those looking to work with professionals while still filing online
Each version of TurboTax also offers premium upgrades that can be critical to someone with a more complicated tax situation. The Audit Defense program gives you representation in the event of an IRS audit.
Then there’s TurboTax Live Assisted, which enables you to work directly with a tax expert. You can start doing your tax return on your own, but if you reach a point where you realize you can’t go any further, the services of a tax professional are available to help you complete your return. The remote access that the tax professional will have will be the equivalent of having that person working right across the table from you.
Who isn’t TurboTax good for?
Those looking for the cheapest software
TurboTax isn’t the least expensive tax preparation software. For example, TaxSlayer offers some cheaper options.
TurboTax vs. competitors
TaxAct, Liberty Tax, and H&R Block each offer their software at lower prices. Each also has similar features to what’s offered by TurboTax, but TurboTax seems to be a bit more advanced in each of its services.
Here are some brief bulleted summaries of the differences between TurboTax and six competitors.
Cash App Taxes, the new and rebranded version of Credit Karma Tax, has a unique competitive niche. It’s the rare online tax service that lets you file simple and complex returns for free — no paid tiers and no surprise fees.
- Free for multiple tax forms and schedules
- Great mobile app access
- Simple interface, layout, and navigation
- Limited customer support
- No multiple state returns
- Free version: Yes (state included)
- Paid plans: N/A
- Customer support: Phone or in-app chat support Mon-Fri, 9 a.m to 7 p.m.
TaxSlayer is a great option for anyone who doesn’t need all the bells and whistles that other tax software programs offer. There’s a free version for simple returns and for military members. Plus, there’s plenty of support for paid versions.
- Good user experience
- Helpful tools
- Great customer service
- Poor email support
- Limited tax education resources
- Mixed support options
- Free version: Yes (state included)
- Paid plans: Classic: $34.95; Premium: $54.95; Self-Employed: $64.95; State: additional $39.95
- Customer support: Email, chat, and phone support (hours vary by season)
Liberty Tax Online
- Free version: No free version
- Paid plans: Basic: $55.95; Deluxe: $75.95; Premium: $95.95; State: additional $36.95
- Customer support: In-office, phone, or email support
- Free version: For simple tax returns (includes state)
- Paid plans: Deluxe: $55; Premium: $75; Self-Employed: $110; State: additional $37
- Customer support: Chat, phone, and brick-and-mortar branch support (hours vary by season)
- Free version: For federal tax returns ($39.95 per state filed)
- Paid plans: Deluxe: $24.95; Premier: $34.95; Self-Employed: $64.95; State: additional $44.99
- Customer support: Phone support (hours vary by season)
- Free version: Free federal returns, $29.99 for state
- Paid plans: Deluxe: $27.99; Premier: $49.99; State: $29.99
- Customer support: Support over email. Paid versions include phone and online support
TurboTax is the most popular tax software, likely because it has so many different options, and can deal with even the most complicated tax situations.
People who are self-employed, or have rental real estate income obviously have complicated returns. The software is also incredibly easy to use, and there are abundant resources for any questions you have.
The levels of support and direct assistance with TurboTax are unmatched among tax preparation software packages.
If TurboTax has a weakness, it’s in its cost. It’s one of the pricier services, which may not be the best option for those with very simple returns, and very limited funds. But for everyone else, TurboTax sets the industry standard.
If you’d like to get more information, or you’d like to order one of the four TurboTax editions, check out TurboTax.