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TurboTax offers a free filing option for some households.
While many people dread tax season, I find it to be an exciting time of year. I get a flurry of forms and documents telling me how much money I made over the course of a year, and I fill in the pieces of the puzzle that summarize an entire year's finances in one place.
But unlike my favorite 1,000-piece puzzle, the puzzle of my taxes comes together on my computer. And I don't do it alone. For the third year in a row, I'm using TurboTax for my taxes and suggest the same to many others.
TurboTax is the biggest and most popular tax preparation software, handling a solid 30% of electronic filings. Here's a look at how it works, what it costs, and if it could make sense for your tax needs.
TurboTax basics
TurboTax is made by Mountain View, California-based Intuit. Also the owner of financial apps Mint and QuickBooks, Intuit is a recognized name in financial software.
TurboTax offers online and desktop versions of its software, with different prices depending on your tax filing needs. More on the cost and features of each version below. You can also log in and work on your taxes with the TurboTax mobile app for Android and iOS devices.
TurboTax
The TurboTax Q&A makes it easy to add dependents and answer other important questions about your taxes.Like other tax programs, TurboTax is driven by a series of questions and answers about your household, income, and opportunities for deductions and credits. In addition to answering these questions, you'll need to add information from your employer, other income sources, and 1099, 1098, W-2, and other tax forms that may show up in your mailbox or inbox.
If you follow the directions and enter everything correctly, you should end up with accurate taxes just as if you went to a more expensive professional tax preparer.
TurboTax pricing
TurboTax online offers four versions depending on your unique tax needs. With all versions, you can start and enter your information for free. You only pay at the end when filing your federal and state tax returns. You can also buy desktop versions for Windows and Mac computers via CD or download.
TurboTax
Pricing from TurboTax.com. You don't pay for your tax prep until you file.
- Free Edition: $0. The Free Edition charges $0 for the most basic filing needs. It covers W-2 income, limited 1099 interest and dividends, and doesn't allow itemizing your deductions.
- Deluxe: $60 (currently on sale for $40). Intuit claims this is the most popular version of its software. It includes everything in the free edition plus the option to itemize your taxes and enter mortgage interest.
- Premier: $90 (currently on sale for $70). Investors, including rental property owners, will want TurboTax Premier. This version even allows you to auto-import your investment data directly from many popular banks and brokerages.
- Self-Employed: $120 (currently on sale for $90). If you own a business, including a side hustle, you'll want TurboTax Self-Employed. It covers credits and deductions related to businesses including rideshare drivers, freelancers, and other small businesses.
Extra costs and fees apply in these situations:
- State filing. If you live in one of the majority of states that require you to do state income taxes as well, you'll have to pay an additional $45 per state (currently on sale for $40 per state). If you lived or worked in more than one state, you may have to pay for multiple state returns.
- TurboTax Live. For a premium price, you can pay for instant, live access to a CPA around the clock during tax season. The additional charge varies based on the version of TurboTax you use.
Some households qualify for free filing: If you have an adjusted gross income (AGI) of $36,000 or less, you're a military household with an AGI of $69,000 or less, or you're a household that qualifies for the Earned Income Tax Credit (EITC), you can free file with TurboTax.
What you get with TurboTax
TurboTax packages up the things most people need to file their taxes. While some people with very complex or unique situations may do better with the direct assistance of a tax professional, the majority of tax situations are easily covered by TurboTax.
- Guidance for important tax forms. TurboTax tells you what you need to enter to do your taxes based on your unique circumstances. Get step-by-step guidance and directions for most tax forms.
- Mobile version. Work on your taxes on the mobile or web versions, or switch back and forth. This isn't available for the desktop version.
- Easy tax form import and upload. Import many tax forms directly from banks and investment companies. With the mobile app, you can take a photo and upload supported forms.
- Detailed help resources. Help and support resources that answer most questions about your taxes with simple and easy-to-follow advice.
- Option to upgrade for live support. Pay extra and you can talk to a tax professional at any time in just a few clicks.
TurboTaxTurboTax does most of your state tax filing based on the information used for your federal income taxes.
Does TurboTax make sense for you?
For most tax situations, TurboTax does a great job of covering your needs. I'm a self-employed freelance writer with a mortgage, bank interest, investment accounts, and other complexities, but I feel confident doing my taxes myself with TurboTax.
Some people with simple taxes may find other options cheaper, and some people might just feel better paying someone to do their taxes for them. But if you are comfortable entering numbers from forms and navigating your way around the computer, TurboTax is the best choice for many tax filers. Myself included.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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