Wednesday, December 18, 2013's TurboTax Review

William Perez for writes:  TurboTax handles simple tax returns quickly and easily and provides added features for those purchasing a premium version of the software product.
I like TurboTax's ability to import data, which can cut down on data entry. However, TurboTax can import W-2s and 1099s only from participating employers and financial institutions. TurboTax Online also lets you import some data from Mint and ItsDeductible (both are owned by Intuit).

TurboTax provides extra guidance for common tax topics

TurboTax's step-by-step interview questions were usually clear, appropriate, and not too overwhelming. TurboTax does ask a lot of questions before you get to data entry screen, which can make navigating through the interview modules somewhat time-consuming if you are trying to revise a specific input. For major tax issues, such as picking the right filing status or figuring out if you can claim a dependent, TurboTax offers EasyGuides to go through all the details.
Both the online and desktop versions of TurboTax feature context-sensitive help. You'll find general overviews of specific tax topics by clicking on "More info" links. And TurboTax also highlights help questions in Live Community module on the right-hand of the screen.
The Premier version of TurboTax adds additional guidance for investments, such as figuring out cost basis for stocks and reporting for stock options and employee stock purchases. If you need to set up business assets, TurboTax offers a step-by-step approach to depreciation.
Intuit includes the ItsDeductible software for calculating the fair market value of items donated to charity in Deluxe and higher versions of TurboTax. Premier and Home & Business versions feature extra help in calculating your cost basis in stocks and mutual funds, which is a common situation many people need help in figuring out. Premier and Home & Business also include my favorite feature: a 401(k) Maximizer for figuring out how much you can contribute to a 401(k) retirement plan without decreasing your net paycheck.

Still hard to find some modules in TurboTax

As in previous years, TurboTax sports a clean and uncluttered interface, which I think will help people stay focused on the preparing their tax returns with a minimum of distraction. However, I still have trouble finding specific data entry screens. For example, the "Explore on My Own" link under the Deductions & Credits tab will bring up a fairly complete list of deductions, credits, and payments. Whereas the "Guide Me Through" button will guide you step-by-step through the most popular deductions and skip over less popular areas of the tax form. The same is true in the income areas of the software. Just be aware that there are multiple ways to find the same data entry module.
Some modules are placed next the the income they go with. For example, retirement plan deductions for self-employed persons and located with the business income module (under the income tab instead of under the deductions tab). If you cannot find an particular data entry item, you may need to search around for it.
This year, TurboTax introduces a new "flags" feature. You can use this to bookmark a particular screen so you can re-visit that section later.

TurboTax Could Be More Helpful When it Comes to Maximizing IRAs

I did run into some issues when working on with a hypothetical tax return in TurboTax. TurboTax alerted me that contributions to a Traditional IRA would be nondeductible (a somewhat common situation encountered by people who are already covered by a retirement plan at work). Although TurboTax alerted me to this situation, the software didn't offer any options, such as to consider a Roth IRA instead. When I navigated back to change to a Roth IRA, TurboTax alerted me that I wasn't eligible for a Roth IRA either, but didn't offer suggestions regarding the maximum amount I could contribute without incurring penalties. This is exactly the sort of situation that I feel software should be able to optimize and find the right fit.

TurboTax Product Versions and Prices

Desktop software versions:
  • TurboTax Basic ($39.95 federal only + $39.95 state. Up to five e-file federal returns included. State e-file is an extra $19.95.)
  • TurboTax Deluxe ($69.95 federal + $36.95 state. Up to five e-file federal returns included.)
  • TurboTax Premier ($99.95 federal + $36.95 state. Up to five e-file federal returns included.)
  • TurboTax Home and Business ($109.95 federal + $36.95 state. Up to five e-file federal returns included.)
Desktop software is compatible with Windows XP SP2+, Vista, and Windows 7; and with Mac OS X 10.4+
Online software versions:
  • TurboTax Free (free federal + $27.95 state)
  • TurboTax Basic ($34.95 federal + $36.95 state)
  • TurboTax Deluxe ($59.95 federal + $36.95 state)
  • TurboTax Premier ($74.95 federal + $36.95 state)
  • TurboTax Home and Business ($99.95 federal + $36.95 state)
All the online software versions include one free electronic filing of your federal return. Compatible with the following Web browsers: Firefox 3+, Internet Explorer 8+, Safari 4+ (Mac only). Adobe's Flash 9+ and Acrobat Reader 7+ also required. Unlike the desktop versions, the price of an online state return includes free electronic filing.
The online versions of TurboTax are available directly on the TurboTax Web site.

The Free Version of TurboTax includes Helpful Features

Price: Free, including federal e-file
Adding a state tax return costs $27.95, including state e-file
Out the door pricing for 1 federal, 1 state, and e-file: $27.95

TurboTax Free Edition is a Web-based tax preparation program. The free version contains some guidance for basic tax situations (such as help in figuring out your filing status and dependents) and includes context-sensitive questions and answers from Intuit's Live Community message board. At various points, TurboTax Free Edition will ask if you want the program to "Guide Me" to select the right answer for a tax question, for example in helping to decide if someone is your dependent or in figuring out the right filing status to use.
The free edition of TurboTax has a Federal Review and error-checking utility. These features helps to identify data entry errors and other items that may need to be double-checked for filing your return. TurboTax's error-check highlighted data entry fields for which I had forgotten to enter information.
The free version of TurboTax does not provide easy-to-use W-4 calculator to help you accurately adjusting your paycheck withholding, nor does it provide access to data input screens for capital gains and self-employment income.

Some Tax Forms are Not Included in the Free Version

The free edition of TurboTax does not provide access to the following common tax forms and schedules: Schedules C (for self-employment), Schedule D (for capital gains), Schedule E (for rental property and income reported via Schedules K-1), and Schedule F (for farm income). By contrast, the free standard edition of TaxACT provides access to all these schedules.

Preparing a Simple Return in TurboTax can be Relatively Quick

I prepared a fairly straightforward tax return with one W-2, one dependents, and various tax credits. Using TurboTax Free Edition took me slightly longer than using TaxCut or TaxACT, but I also went through several of the Guide Me interviews (which were not provided in the other two software programs). So even though TurboTax took me longer to finish my return, I feel the tax preparation process was more thorough.

Browser Compatibility

TurboTax Free Edition is available only as a Web-based software application. The TurboTax web site is compatible with the following Web browsers: Firefox 3+, Internet Explorer 8+, Safari 4+ (Mac only). Adobe's Flash 9+ and Acrobat Reader 7+ also required.

More About TurboTax

Additional reviews and information about TurboTax can be found on the Guide to Financial Software:


Post a Comment