Filing your taxes online is becoming easier, faster and more affordable each year. In this TurboTax Review for 2020, we’ll outline Turbotax’s latest programs, pricing and share what’s new with TurboTax.
If you’re considering filing your tax return online this year, check out the details of TurboTax. TurboTax has been helping people file taxes online since the mid-1980s.
While most of TurboTax’s features are very attractive, the fact remains that they’re one of the most expensive online filing options available. However, the company has years of tax filing experience. So they are an option worth considering.
Table of Contents
- How TurboTax Works
- TurboTax Features and Benefits
- TurboTax Plans and Pricing
- TurboTax Pros and Cons
How TurboTax Works
TurboTax makes online filing of your tax return super easy. Your job is to fill out the online questions they ask during the tax filing process. Their job is to put the numbers together.
You’ll start by answering basic questions such as your name, address and social security number. From there, you’ll be asked specific questions about your income and the type of job you work. TurboTax can work for you whether you have a W-2 job or are self-employed.
The system will also ask you questions about dependents you might have, charitable deductions or any other tax-related information. When you finish answering all of the items, TurboTax will review it just to double-check for accuracy.
TurboTax will give you information on how to fix items or what it thinks might be wrong if there are any perceived errors or potential errors. Also, the program provides you suggestions on how to lower your tax burden further.
For instance, it might suggest opening or adding to an IRA, or increasing charitable deductions.
TurboTax has programs that allow you to fill out your tax return entirely on your own. Or they’ve got Certified Public Accountants, Tax Lawyers and Enrolled Agents standing by to help you.
After you finish filling out your return using the TurboTax system, TurboTax sends it to the IRS or your state’s Department of Revenue. And it will give you instructions as to waiting for your return or paying if you own additional tax monies.
TurboTax Features and Benefits
There are several features and benefits to the Turbotax software program. Here are some of the most popular features and benefits of Turbotax.
TurboTax comes with program guarantees to ensure you get accurate help. The 100% Accurate Calculations Guarantee ensures that if you pay a state or federal penalty due to a TurboTax calculation error, TurboTax will reimburse you for the penalty plus interest due.
The Maximum Refund Guarantee promises that if you receive a larger refund or smaller tax due from another tax preparation method, you’ll get a refund of what you paid for TurboTax. If you use TurboTax Free, you’ll get a $30 refund.
Audit Support and Representation
TurboTax has two levels of audit support with their services. Audit support offers guidance if you receive an audit notice from the IRS.
This service doesn’t provide for representation during an audit, but it will help you understand and prepare for any questions the IRS has for you.
TurboTax also has an Audit Representation package. Audit Defense is available for $44.95 when you purchase the MAX program through TurboTax.
Note that you do need to purchase this add-on before you file your return. However, the service remains available for the entire length of time your return is eligible for audit.
MAX Add-On Program
The MAX add-on program I mentioned above offers four benefits.
Lifetime Full Audit Representation
When you purchase the MAX add-on, TurboTax gives you a lifetime promise to defend you for the length of time your return is eligible for audit.
You need to purchase the MAX add-on each year that you file.
Full Identity Restoration
MAX includes expert restoration services if you are ever a victim of identity theft. This service works to recover both your identity and the identity of any joint filers on your returns.
Identity Theft Monitoring
MAX also provides for identity theft monitoring. Identity theft experts keep an eye on your online identity and notify you quickly if any suspicious activity occurs.
Identity Loss Insurance
The TurboTax MAX feature provides insurance coverage due to losses related to identity theft. That includes legal fees and any other financial harm you might experience in the case of identity theft.
This feature puts you in place for a shorter wait time should you need help while filing your taxes.
MAX is the ultimate add-on for tax filing and identity protection, should you feel you need it.
Multi-State Filing Option
All TurboTax plans come with a multi-state filing option. This feature can be great if you have multiple states you need to file taxes in, whether it’s because you’re working in several states or have rental properties in various states.
You can add the multi-state filing option to any TurboTax package for just $44.99
Mobile App Feature
TurboTax has apps for both Android and Apple, meaning you can use the program along with your mobile devices.
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Online Community Support
TurboTax has a healthy online forum community where you can ask questions of other TurboTax users. Also, they’ve got a blog that shares articles on a variety of tax subjects.
TurboTax has a small discount for military members, offering $5 off all plans.
If you use Quickbooks to manage your money or your business, you’ll find it extra easy to do your taxes with TurboTax. Quickbooks software information can be directly imported into your TurboTax filing program since Intuit owns both programs.
Pay Via Your Refund
TurboTax also has a feature that lets you pay for your TurboTax filing plan with proceeds from your refund. However, there is a $39.99 fee for using this feature.
TurboTax Plans and Pricing
TurboTax has four different plans for users to choose from. Here’s a summary of what each one contains.
TurboTax Free (Basic) Edition
TurboTax has a great new feature for 2020, where the Basic Free edition is concerned. This year, the TurboTax Free Edition is free for both state and federal return filing. You can use this program if you’re filing with a basic 1040 form.
You can only use this edition if you make under $100,000 in W-2 income. Earned income credit and child tax credits will work with this edition too. However, you can’t use this edition if you have any type of itemized deductions or need to add a Schedule A to your return.
TurboTax Deluxe is TurboTax’s most popular addition. It costs $60 to file your federal taxes and an additional $50 to file your state taxes with TurboTax Deluxe.
However, this version comes with many additional features. For instance, you can include mortgage and property deductions with this version.
And it comes with on-demand help from a tax specialist. Besides, the Deluxe version searches over 350 available deductions to help minimize your tax burden.
Know that if you have self-employed income or if you own rental real estate, you’ll have to use one of the next two versions we talk about here.
TurboTax Premier costs $90 to file your federal taxes and an additional $50 to file your state taxes. With this version, you can auto-import your investment income and tax data.
You can include investment data from stocks, bonds and ESPPs as well. Plus, you can allow for rental property income and deductions with this version. And that also includes depreciation schedules and fair market rental value estimation.
In addition, the Premier version will help you accurately account for cryptocurrency gains and losses. This version is likely best for those who own rental properties but don’t have other self-employment income. And it comes with on-demand tax expert help too.
TurboTax Self-Employed is meant for anyone with 1099 or other self-employed business income. If you have a business you run from home, this is the version for you.
The Self-Employed plan costs $120 to file federal taxes and an additional $50 to file your state taxes. It searches more than 400 tax deductions and credits to make sure you don’t miss important deductions.
You can use it for investment income and deductions, and real estate income and deductions as well. And it allows for easy 1099-MISC income import with your smartphone. This version has a host of industry-specific deductions meant for the self-employed and contractors.
And like the Deluxe and Premier versions, it comes with on-demand tax expert help.
TurboTax Live is a feature that Turbotax introduced a few years ago. This feature, which comes automatically with some programs and with others if you pay, is an added step of support as you file your tax returns.
With TurboTax Live, you have access to live support as you’re working on your taxes. Every TurboTax live support specialist has one of three educational designations:
- Certified Public Accountant
- Enrolled Agent
- Tax Attorney
And TurboTax Live experts have an average of 15 years of tax help experience, meaning you can be assured they know current tax laws.
When you use TurboTax Live, you can get answers to specific questions or help with certain sections of your return. Or you can have a TurboTax Live specialist look at your entire return.
TurboTax Live is available from 8 a.m. to 5 p.m. Pacific Time. Besides, you can submit a question in writing and get an answer within 24 hours.
TurboTax Live also comes with its own guarantee. If the IRS charges you a penalty because of an error a TurboTax Live agent made, TurboTax will reimburse you the cost of the penalty, along with any interest you have to pay.
TurboTax Live is available with all TurboTax versions. However, the plan prices are different if you want to include TurboTax Live. Here’s a summary of TurboTax plan prices, including the TurboTax live feature.
- TurboTax Basic with TurboTax Live: $80 for federal and $45 additional for state
- TurboTax Deluxe with TurboTax Live: $120 for federal and $55 additional for state
- TurboTax Premier with TurboTax Live: $170 for federal and $55 additional for state
- TurboTax Self-Employed with TurboTax Live: $200 for federal and $55 additional for state
You might want to consider the TurboTax with TurboTax Live programs if you aren’t comfortable navigating through your tax return without professional guidance.
TurboTax Pros and Cons
Here are some of the pros and cons based on our TurboTax Review.
- Easy-to-use navigation
- Quickbooks integration makes it extra convenient for Quickbooks users
- Professional tax experts available
- The step-by-step system is great even for complicated tax situations
- You can import a PDF of your last year’s return from another tax software program.
- Able to start your return for free with all of the programs
- Final price revealed at the completion
- Prices are higher than some other online tax filing options
One other “con” is that you won’t know exactly what you owe until you’ve completed your return. The reason TurboTax works this way is that there are extra features you might enable along the way as you file.
Therefore, saving your balance due until the end ensures you’re billed for any extra services you’ve used.
However, filling out your forms with TurboTax is always free. In other words, you don’t pay until you choose to complete and send the information to the appropriate tax authority.
TurboTax is rated a 3.2 out of 5 on Trustpilot as of this writing. However, there were only four reviews on the site. The Better Business Bureau gives TurboTax an A+ rating.
That said, they do offer completely free filing for both state and federal if you’ve got a simple tax situation and only need to file the 1040 basic form.
If you like the idea of filing your taxes online, using TurboTax is a great option. With a history of tax preparation going back 40+ years, TurboTax has plenty of experience in the tax filing arena.
Have you ever filed your taxes online? Have you ever used TurboTax? Feel free to share your experiences in the comments section.