One of the top-rated tax calculation software on the market, TurboTax, has been the talk of the town for some time now. Here’s our attempt to explain how much TurboTax is, what the features of the different versions are, and everything else you need to know about using TurboTax in 2023!
Tax burdens are becoming more difficult with growing salaries, improvements in financial literacy, ventures into small home-grown side businesses, and increasing investments of individuals. With taxation already being a rather complicated matter, to begin with, the need for tax calculation and tax return filing software was an obvious must for the market. And on that note, let’s dive right into understanding the market-favorite taxation software TurboTax!
What Is TurboTax?
One of the most popular tax software on the market today, TurboTax is a seamlessly easy-to-use software that helps prepare your tax return in just a few minutes. Often used as the comparison benchmark of all tax software on the market, TurboTax not only prepares taxpayer returns of all income levels but also does so at a fraction of the cost!
Consider this your DIY tax return preparation software; your accountant on your laptop!
How Does TurboTax Work?
One of the biggest reasons the masses love TurboTax and rate it so highly is because of its extremely simple and easy-to-use interface. The software developers at TurboTax have nailed the intuitive user experience—the moment you purchase and launch the software, you’ll be asked a few simple questions and it’s just an easy ride from there!
The software essentially breaks down each section of your tax return sequentially: general information, tax filing status, income, deductions, and credits. Once all the information has been filled in, TurboTax may suggest how to lower your tax liability and if there are any errors or missing information. After all the information is reviewed by the user, TurboTax e-files your return and allows you to save and print copies for recordkeeping.
Once the return is successfully accepted by the IRS (within a day or two or even within minutes in some cases), TurboTax sends you a confirmation e-mail notification and enables a “Where’s my refund” tool to track the tax returns.
Is TurboTax Safe To Use?
TurboTax is one of the safest tax software in the marketplace, promising its users to get them the largest tax refund that’s legally possible. Additionally, it also has an accuracy guarantee that can protect you in the event a mistake is made on your return.
Turbo Tax: Features
Now that we have established that TurboTax is one of the most popular, safest, most recommended, and easiest tax software, let’s look at some of its popular features.
Here are some of the top TurboTax features that make this tax software stand apart in the crowd:
- Accuracy Guarantee: The website clearly states: “If you pay an IRS or state penalty or interest because of a TurboTax calculation error, we’ll pay you the penalty and interest.”
- Audit Support Guarantee and Representation: Unlike most tax software, TurboTax offers an audit support guarantee, as well as, representation. You will be entitled to free one-on-one audit guidance from a trained tax professional as a part of the audit support guarantee. The free-of-cost service does not entitle you to representation but only for ‘help’ and problem explanation. For audit representation by a tax professional, on the other hand, you will have to purchase ‘Audit Defense’ (available when you purchase the MAX Defend & Restore plan) at an additional $44.99
- QuickBooks-Integrated Interface: If you already use QuickBooks, you can just import information directly from QuickBooks into TurboTax to have a more simplified tax documentation collection and tax preparation. This makes the job even easier, especially if you are self-employed or have rental real estate.
- TurboTax Military Discount: As their token of respect and support to those defending the country, TurboTax also offers a small discount for members of the military.
- Refer a Friend: If somebody signs up on TurboTax with your referral code, you’ll get a $25 gift card to your choice of 30+ retailers when they complete their taxes. The referred friend, additionally, gets 20% off for the plan they purchase.
TurboTax Plans & Prices: How Much is it to Do Your Taxes with TurboTax?
TurboTax comes in 5 different options and versions, each version a little different from the other and suited for particular tax situations. Listed below are all five TurboTax plans explained in detail with their respective prices.
It must be noted all prices given are online purchase prices. The CD/download product purchases may vary.
1) TurboTax Free
As the name suggests, the free version of TurboTax is a no-cost plan free on three fronts: $0 federal, $0 state, and $0 to file. The catch here is that this plan is feasible only for the simplest of returns: Form m 1040 without any additional schedules.
The free plan entails W-2 income, limited interest, dividend income, claiming the standard deduction, child tax credits, and filing for the earned income tax credit. Anything outside of these options will have to be paid for.
TurboTax Free Plan Features
- Instant Filing: If you are employed by one of the 1 million employers on board with TurboTax, you can just import your W2 information and input it directly as TurboTax also lets you download your W2 from your smartphone. Take a picture of the form and the software will take care of everything else!
- Year-Round Support: TurboTax offers 24/7 customer support with all the tax-related information you could ever need-even as a beginner! If you’re still unsure, you can also just reach out to their specialists and get instant online answers.
- Accuracy Check: Once you submit your return, TurboTax does a comprehensive review to cross-verify that your information and calculations are accurate, and that none of the fields are missing in your returns.
2) TurboTax Deluxe
The most popular paid plan of TurboTax, TurboTax Deluxe lets you begin the filing process for free but needs to be paid for when you file. It is essentially designed to e-file Form 1040, including itemized deductions and incomes over $100,000; excluding those who are self-employed or have rental properties.
TurboTax Deluxe Plan Features
Apart from the features listed for the Turbotax free edition, TurboTax Deluxe offers the following additional features:
- Deduction Finder: The software can search through more than 350 tax deductions and credits to get you the maximum refund.
- One-On-One, On-Demand Help: TurboTax Deluxe offers one-on-one specialist help and guidance to help you find answers to all of your tax-related queries or doubts.
- 50% Done In One Click: For pre-existing TurboTax users, the necessary information can be automatically transferred to the new year’s tax return which helps save so much time and energy.
How Much Is TurboTax Deluxe?
TurboTax Deluxe can be purchased at $60. There is an additional charge of $50 to complete and file the state tax return.
3) TurboTax Premier
The TurboTax Premier version is designed for more complicated tax returns, the ones that typically include investments and rental properties. If you have investments in stocks, bonds, and employee stock plans, TurboTax Premier should be the version to sign up for.
TurboTax Premier Plan Features
Apart from the features listed for the TurboTax free edition and TurboTax Deluxe edition, TurboTax Premier offers the following additional features:
- Investment Import Information: Automatically import investment information from a huge bucket of financial institutions which makes it helpful for active stock traders.
- Finding Your Cost Basis: In just three easy steps you can discover the accurate purchase price for securities sold during the current financial year.
- Setting Up New Rental Properties: The software walks you through the process of setting up new properties, as well as, how to determine the fair market rent value on the property to set up rental property depreciation. This eventually helps get the maximum tax deduction possible.
- Cryptocurrency Transactions: TurboTax premier also accounts for the capital gains and losses of your cryptocurrency transactions.
How Much Is TurboTax Premier?
TurboTax Premier can be purchased at $90 for your Federal return and $50 for your state return.
4) TurboTax Self-Employed
TurboTax Self-Employed version, as it may be understood by the name, is the best pick for people who are self-employed or have a self-employment income. This category includes small business owners, freelancers, and independent contractors.
TurboTax Self-Employed Plan Features
The Self-Employed Edition comes with all the features of the Premier Edition, but adds the following specifically for businesses:
- Industry-Specific Deductions: Helps identify business deductions that may otherwise be missed out on. For example, expenses specific to real estate, rideshare, creative arts, performing arts, and construction.
- Automatic Mile Tracking: This lets you automatically track your mileage via your mobile phone, through a tool called “QuickBooks Self-Employed.”
- Vehicle Tax Deduction: This helps automatically determine the suitable option between standard mileage deduction or actual expenses for the maximum possible deduction on your vehicle expense.
- Ideal for Those Without A Payroll Service: Unlimited W2s and 1099s for both your employees and contractors.
- QBI Guidance: Offers Qualified Business Income deduction guidance.
How Much Is TurboTax Self-Employed?
The TurboTax Self-Employed version can be bought at $120 for filing Federal income taxes. Your state return will be an additional $50.
5) TurboTax Live Edition: The TurboTax Feature Update For 2023
TurboTax rolled out TurboTax Live, a feature that lets you interact with tax experts in real-time, should you have any tax-related questions or problems that need to be figured out by a professional. Returns of all the subscribers of TurboTax Live are also reviewed by a tax expert and tweaked wherever necessary by a CPA or EA on the behalf of the user.
If you are looking for an expert to file your taxes for you without having to leave home, TurboTax Live lets you do so via a licensed CPA or tax expert.
You can import your W-2s and other tax documents directly into TurboTax, so you don’t have to manually enter all of your information. You can also access the TurboTax TaxCaster to get an estimate of your taxes before you file. Plus, you can use the TurboTax Audit Support Center to get help if you’re ever audited.
Additionally, you can use the TurboTax TaxCaster to get an estimate of your taxes before you file. Plus, you can use the TurboTax Audit Support Center to get help if you’re ever audited. You can also access the TurboTax Refund Calculator to get an estimate of your refund before you file. Plus, you can use the TurboTax Deduction Finder to help you find deductions you may be eligible for.
TurboTax Live may seem irrelevant to some; but in fact, is one of the best and most sought-after features for the high-level tax preparation that is supervised by an expert in the domain.
TurboTax Live Plan Features
- Remote Return Access: A tax expert can access your return remotely and help answer your queries.
- Video Consultation: Tax experts can be consulted live via a video screen to speak with you directly for a special, personalized experience from the comfort of your home.
- CPA/ EA Review: Once the return has been completed, you can have a CPA or EA review your return to make sure it’s correct.
How Much Is TurboTax Live?
TurboTax charges an extra $60 to $80 over the specific edition that you have already signed up for. This means that if, for example, you’ve signed up for Premier at $90 for your Federal return, and $50 for your state return; you will need to pay an additional $60 to $80 to upgrade to TurboTax Live.
TurboTax Feature Update 2023
The TurboTax Feature Update for 2023 is an exciting development for taxpayers. This update will bring a number of new features to the popular tax preparation software, making it easier and more efficient for users to file their taxes.
The first major feature of the update is the ability to import data from other tax preparation software. This will allow users to quickly and easily transfer their tax information from other programs into TurboTax, saving them time and effort. Additionally, the update will include a new user interface that is designed to be more intuitive and user-friendly. This will make it easier for users to navigate the software and find the information they need.
Also, the software will now be able to automatically detect and fill out common tax forms, such as the 1040EZ and 1040A. This will save users time and effort, as they won’t have to manually enter the information. Additionally, the software will be able to detect and fill out state and local tax forms, making it easier for users to file their taxes in multiple states.
Finally, the software will now be able to detect and alert users to potential errors in their tax returns. Additionally, the software will be able to detect and alert users to potential fraud or identity theft. This will help protect users from potential financial losses due to tax fraud or identity theft.
Final Thoughts: Is Buying TurboTax Worth It?
If you are particular about your tax filing, are not equipped with the knowledge on how to do it, and are sick of covering the charges of a CPA year-on-year, TurboTax is your best choice. TurboTax is one of the most user-oriented software that also gives you the accessibility of getting in touch with a tax professional at a much lower price.
TurboTax is the best software for you if:
- You are someone who needs to file complicated taxes owing to significant investment activities or the ownership of a small business.
- You are looking to find yourself the most tax deductions.
- You are looking to file your taxes with professional help but online, from the comfort of your home.
On the flip side, TurboTax may not be the best option for you if:
- Are looking for the cheapest or the most economical software on the market.
- Do not have a complicated tax situation and have fairly simple returns to file.