What to Know About the Online Tax Filing Service

Tax season is pretty much nobody’s idea of fun.

Fortunately, there’s a wide range of digital DIY tax filing services available to help you get your paperwork right and file your taxes online without spending your entire refund on an accountant.

In this TurboTax review, we’re covering everything you need to know about its online filing services and tax software and how it stacks up to its competitors.

TurboTax: How Does It Work?

Perhaps the best-known of the digital filing options, TurboTax is the tax-focused baby of Intuit, the same company behind Mint and Quickbooks.

As such, it’s not surprising that TurboTax has a dazzling array of financial tools to help you during tax time as well as year round, regardless of your tax situation.

TurboTax offers both totally DIY filing options as well as an upgraded suite of DIY filing with live online help. You can also purchase its tax preparation software on CD or by download, which can help you save even more money. You pay a one-time fee and get up to five included federal filings, though you’ll likely still need to pay to file your state tax return.

Here’s what the pricing tiers look like at TurboTax. (These prices are current as of January 2021 and are subject to change.)

Free Edition

The TurboTax Free Edition is appropriate for filers with simple tax returns. It covers W-2 income, the Earned Income Tax Credit (EIC) and child tax credits. True to its name, it’s free — but few peoples’ taxes are truly basic, and this tier doesn’t cover as many filers as competitors’ free options.

Cost: $0

Deluxe

The TurboTax Deluxe edition includes everything the Free Edition does, plus mortgage and property tax deductions, charitable donations, student loan interest, education expenses and 1099-MISC income — i.e. earnings of an independent contractor like a freelance writer or Uber driver.

If freelance work is your sole source of income, you’ll be better off using the TurboTax Self-Employed edition, which is described below.

Cost: $40 for federal filing, plus $40 per state

Premier

TurboTax Premier includes everything you get in Deluxe, as well as coverage for tax deductions and credits for things like stock market and cryptocurrency investments, rental property income and refinancing deductions. It also has a feature that lets you auto-import your investment income reports.

Cost: $70 for federal filing, plus $40 per state

Self-Employed

TurboTax Self-Employed helps you prepare tax returns with personal and business income, so it’s a fit for freelancers, independent contractors and small business owners.

This edition includes a host of features specifically designed for freelancers, such as:

• Help finding deductions specific to your line of work.
• The ability to import 1099-MISC forms with a quick photo.
• Free access to Quickbooks Self Employed.
• Access to a year-round tax estimator after filing.

Cost: $90 for federal filing, plus $40 per state

TurboTax Live

For each of the products above, TurboTax lets you upgrade to TurboTax Live to get on-demand answers and a line-by-line review of your taxes by a tax expert — CPA or EA.

Cost: TurboTax Live comes in tiers similar to its DIY products:

• Basic costs $0, including free state filing.
• Deluxe costs $90, plus $50 for state filing.
• Premier costs $140, plus $50 for state filing.
• Self-Employed costs $170, plus $50 for state filing.

Features

No matter which tier works best for you — and there’s an easy, clickable questionnaire that helps you figure out the right product based on your tax situation — all TurboTax customers get access to a wide range of tools, guarantees and features.

Audit Support Guarantee

TurboTax guarantees the accuracy of your taxes and stands behind that promise with its Audit Support Guarantee, which grants you free access to the Audit Support Center.

If you’re audited by the IRS, you can access the support center to get free, live, one-on-one guidance with a tax professional, as well as year-round answers to your questions and assistance on what to expect and how to prepare. This service is not, however, a replacement for legal advice.

Money-Back Maximum Refund Guarantee

TurboTax guarantees you’ll get the biggest refund possible. If you tally up a larger refund (or similar tax liability) with another tax preparation service, TurboTax will refund your fee (or pay you $30 if you used the Free edition).

Mobile Apps for Apple and Android

TurboTax lets you file from your smartphone or tablet with popular and highly rated apps for both Android and iOS. You can use the app to track charitable donations and deductible expenses throughout the year.

Refund Advance

If you need your money post-haste, TurboTax offers a refund advance of up to $3,000 of your expected federal tax refund with 0% interest and $0 loan fees. To be eligible, your expected refund must be at least $500.

If you’re eligible, you’ll get the funds within as little as three hours of the IRS accepting your tax return, loaded onto a Visa debit card. You’ll get the virtual card info, so you can spend online right away, and the physical card should come in the mail in five to 10 business days.

Once the IRS processes your federal return, your remaining refund amount will be loaded onto the same debit card. You don’t have the option to receive the rest of your refund in another form (e.g. direct deposited into your savings account).

Pay-With-My-Refund Options

TurboTax lets you pay your product and filing fees with your federal tax refund, meaning you never see an out-of-pocket cost for the service. There is, however, an additional fee for this option; most users report a charge of $39.99, though this price is subject to change.

Fees

To prepare and file your tax returns through TurboTax, you’ll pay a fee for the filing program or software, plus additional fees to file your state return. Here’s how that looks:

• DIY online filing: Free to $90, depending on tier.

• State filing fees: Additional $0 for free filing, $40 per state for paid DIY tiers, $50 per state for paid Live tiers.

• TurboTax Live: Free to $170, depending on tier.

If you owe taxes after you file, you can pay through TurboTax’s payment processor via credit card or debit card for a convenience fee.

TurboTax also helps you pay via direct debit from your bank account for free. This is an option not all competitors offer; with other tax services, you’d have to go directly to the IRS to pay this way.

TurboTax: Pros and Cons

Now that we’ve laid out the basics of TurboTax’s features, what’s the verdict on its performance? Like all financial products and services, there are both pros and cons to using TurboTax.

Pros

• Affordable: TurboTax’s tiers clock in at a lower price than similar tiers from competitors — though its free DIY service doesn’t cover as many filers as other options.

• Ease of use: Filing with TurboTax is pretty comprehensive and user friendly, according to user reviews. Its technology simplifies the process — for example, you can automatically populate your tax forms by snapping photos of your W-2s.

• Comprehensive: The company has a product available for just about every filer, no matter your income or tax situation, or how hands-on or hands-off you want to be.

• Customer service: TurboTax offers lots of support, including links to extensive support topics as well as a community forum that lets you interact with other filers and tax experts in real time.

Cons

• Overwhelming user experience: All those options mean TurboTax is super customizable. But sifting through them can feel kind of overwhelming. Its homepage tries to guide you to the right products based on your tax situation, but those can be confusing and make it tough to get an overview of products if you’re a comparison shopper.

• Lack of transparency: Your total TurboTax fees aren’t totally clear until you actually go through the tax prep process. That could mean wasted time if you end up wanting to find a cheaper option.

• No physical locations: TurboTax doesn’t offer in-person, brick-and-mortar offices like H&R Block. If face-to-face, personalized service is important to you, this isn’t your best option.

Who Is TurboTax Best For?

When it comes right down to it, most online tax preparation services are more alike than they are different.

TurboTax may be best for someone who wants custom tax help without going into an office and dealing with a live person. It’s also a good option if you’re looking for a truly fee-free line of advance tax credit so you can access your money ASAP.

Remember, you can always file for free, if you’re eligible, through the IRS portal. This service is available to filers who earned $72,000 or less (in 2020), and the page also links to free fillable forms for earners at all levels.

Still comparison shopping? Check out our reviews of H&R Block and TaxAct before you make a decision.

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