Turbo Tax – What Is It?

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ProsCons
Automatic input of last year’s detailsFree only for those who make below $69,000
Attempt to make fax filling funProcess less intuitive than other services
Well-organized software Possibility of missing deductions and/or overdeducting
Helpful, clear list of required formsWill have to conduct your own tax research for unknown topics and questions
Automatic calculations inputted into tax file

If you’re living in the United States of America and it’s coming up to tax season, you might be feeling under stress. As US citizens have to calculate how much they owe the state themselves, it’s a high-stakes tightrope walk through complex bureaucracy. But there are plenty of software systems out there that promise to make the process much, much easier. We’ve covered a few examples of the competition so far, but one of the most well-known examples of these software systems is Turbo Tax. We’ve broken down what might make a customer hesitate to put their money behind Turbo Tax, as well as what makes the software filing system irreplaceable.

While Turbo Tax has turned out to be one of the most expensive software filing programs on the market, it is the most popular one. Its free version allows you to file the 1040 form but not schedules 1, 2 or 3, that is, the forms you would need to report business income, alimony, deductible student loan interest, certain retirement contributions, alternative minimum tax, the credit for dependent care expenses, the Lifetime Learning Credit or the Saver’s Credit. Users also will not be able to claim any tax credits or deductions apart from the standard deduction, the earned income tax credit or the child tax credit. As such, a huge swathe of tax situations will require the paid tier. Beyond this, the live basic version will cost $80 for federal taxes and $50 for state taxes. With this version, users gain on-demand video access to a tax pro for help, advice and a final review. Meanwhile, the deluxe version costs $60 for federal taxes, or $120 for the live version, as well as $50 for state taxes or $55 for the live version.

This version lets you itemize and claim several other tax deductions and tax credits. You can file a Schedule C for business income (but not expenses). You can’t report capital gains or rental income, that is, income that requires Schedules D and E. One step up from this is the premier version. This will cost users $90 for federal taxes, or $170 for the live version, and $50 for state taxes, or $55 for the live version. The only difference between this and the deluxe edition is the ability to report investments and rental income through Schedules D and E and K-1 forms. Finally, the self-employed version costs $120 for federal taxes, or $200 for the live version, as well as $50 for state taxes or $55 for the live version. This offers everything in the previous version plus support for the home office deduction, extra deduction help and special expense-tracking features for freelancers, independent contractors and side-hustlers. This also comes with a one-year subscription to QuickBooks Self-Employed, a useful accounting system for freelancers. This is far more expensive than many of its competitors, and Turbo Tax has intentionally set up the free version to be unhelpful to most of its potential customers. As such we can’t recommend this on the basis of price.

However, Turbo Tax’s software is some of the best on the market. It ensures security by requiring two-factor authentication via a confirmation code sent to users’ phones. Once users get into filing their taxes, Turbo Tax provides a wide range of options to fill in details. If you have a PDF of last year’s returns, it provides an option to automatically enter concurrent details like your name and date of birth. There’s also a manual option, though, so no worries if you don’t have this. It starts out with a questionnaire that’s simple to answer, then generates a list of forms you’ll need from this, being highly helpful for those who struggle with organization. Utilizing interactive card-based website design, the website also finds an original, interesting way to help you input otherwise dull details. It also stands out from the competition by attempting to brighten up users’ experience of filing taxes through puns, empathetic acknowledgment of the difficulties of filing taxes and showing users the faces of real customer support agents. It features a side banner that keeps track of whichever section the user is currently in, whether it’s My Info, Federal, State, Review, or File. However, there’s no percentage-based tracker of where the user is in the process of filing their taxes, which would have been useful to help the user through. Yet its use of inbuilt calculators is unparalleled. Not only do you not have to use a calculator outside the software program, but the calculator will automatically input several computations based on your answers to the introductory questionnaire. While these calculations can be overridden by users at any time, it’s still a highly impressive timesaver. It’s clear that Turbo Tax’s creators are working to ensure any user, no matter how unfamiliar they are to the tax system or with software systems like this, can easily file their taxes digitally.

While Turbo Tax’s fees are quite astronomical when compared to the competition, its software system backs its prices up. Unless your tax situation is relatively simple, you’ll need to move into the paid tiers almost immediately. These paid tiers have prices that are seriously hiked up compared to competitors like TaxAct and E-file. However, their software system is sleek and runs extremely well. It’s easy to navigate, giving users a clear list of forms they need almost immediately through a questionnaire that’s intuitive to use. You can select an automatic input of last year’s details, seriously saving you some time, and the calculator will even provide automatic numeric totals if you want it to. It’s really helpful if your tax situation is more complicated than most, working to provide newbies to tech or the tax system with a user-friendly, comprehensive experience. And the puns are nothing to dismiss.

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