TurboTax Review – Intuitive and Thorough
No one likes paying income taxes, and even fewer people enjoy preparing them. It’s bad enough that you have to pay money to the government, but having to spend hours of your time preparing your taxes yourself or hundreds of dollars having them prepared for you by a professional just adds to the misery. Fortunately, there are a number of software solutions on the market that make it easy to prepare your taxes at home, with a minimum amount of trouble and time. Among those products, the most popular is Intuit TurboTax, a product that was first developed in the mid-1980s. Over the years, the software’s user interface has been refined, and the abilities of the software have been expanded. There are now four versions of the software – a free version (Federal returns only), a Deluxe version, a Premier version, and a Home & Business version. In addition, users may purchase the software for use either online or off, depending on their needs. Read on for our full TurboTax review
TurboTax Review – The Pros
Intuitive design – TurboTax is a product that was designed from the ground up to do one thing only and to do it well. Because of this, the product has a clean, intuitive user interface, and it has been designed to make the process of completing your tax return fairly painless, as the software will guide you through the process on a step by step basis.
Good Resources – TurboTax offers a number of resources to help you if you find yourself in a quandary. The software contains a good, easy to use knowledgebase, a glossary of terms and a few video tutorials. You also have access to the online TurboTax community, which has answers to thousands of questions and you may ask questions of your own if the information you need isn’t available.
Work as you like – TurboTax will guide you through your return on a step by step basis, but you’re not required to do it that way. You’re free to skip around if you like and work on sections in any order you please.
Audit Risk Detection – No one wants an audit, and TurboTax is aware of a number of potential “flags” that might inspire the IRS to audit you. When these situations are encountered, the software will mark them and provide you with guidance to help you correct potential problems in order to avoid being audited.
Good Deduction Discovery – TurboTax does a good job of identifying potential income tax deductions that you may not have known about, potentially saving you money. These include deductions related to home ownership, small businesses, charitable donations, rental property and more. This feature varies depending on the version of the software.
Telephone guidance – You can also speak with someone at TurboTax over the phone if you have a problem with either the software or the use of it, as the company has both software technicians and tax preparers at hand to help you with any problems that may arise.
Buy the version you need – There are four versions of TurboTax available, either for online use or for download. The company has a helpful chart on their Website to help you determine which of the versions is best suited to your needs. The most basic of these is the Free Federal Edition, which allows you to prepare your Federal tax return at no charge (but not your state return; that does require buying a separate product.) The free edition is quite limited in scope, and offers little besides the ability to import your W2 information and file the return electronically.
The Deluxe Edition is more comprehensive, and allows for itemized deductions, mortgage deductions, charitable deductions, 1099 income, and access to your previously filed returns.
The Premier Edition includes all of the above, but also has the ability to handle sales of stocks, bonds or mutual funds, automatic calculation of cost basis (Schedule D), and the ability to handle income and deductions for rental property.
The Home & Business Edition adds the ability to handle small business income and expense reporting, tax deductions and depreciation, and prepares both personal and small business taxes.
All in all, TurboTax offers a product for just about anyone, and in an easy to use format, either online or off. There’s plenty of help and resources available and even the free version gives you the ability to file electronically.
Cons of TurboTax
No TurboTax review would be complete without listing the drawbacks of the product. This product, like any piece of software, isn’t perfect, and it’s not without its flaws. The Federal Free Edition is quite limited in abilities and scope. Unlike competitors, such as H&R Block, TurboTax has no retail locations, so you can’t walk into your local storefront and get help in person. Other tax software solutions are less expensive, particularly when you consider the add-on cost of buying additional software for filing your state income tax.
Perhaps the biggest drawback to using TurboTax is that the software is only as smart as you are. While the software is designed to help you maximize your income tax deductions, it’s a tax preparation program; it doesn’t know anything about tax strategy. Tax strategy is where you’re going to save money because American tax law often allows you to take advantage of deductions in ways that TurboTax simply doesn’t know about. For example – the IRS allows you a number of different ways to calculate the percentage of your home that you’re using for a small business, but TurboTax uses only one. What if using another method could save you money? TurboTax could probably make use of that information, but only if you knew about it in the first place. That’s the problem with both TurboTax and any other tax preparation software. It’s smart, but it’s not clairvoyant and that is where it’s going to cost you money to use it.
What you need instead is a way to become aware of the sorts of breaks, deductions and alternatives that TurboTax doesn’t know about that could potentially save you thousands of dollars every year on your taxes.
TurboTax is a good program and it’s affordably priced. But you need to realize that the modest cost of the software could be more than offset when you have to pay hundreds or even thousands of dollars in additional taxes because you didn’t take deductions that TurboTax didn’t even know about. That’s our TurboTax review in a nutshell.