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To make filing taxes for individuals easier, a lot of applications have been launched in the past, along with more services on offer by accountants. While accountants do everything for you for a fee, the tax filing software enables you to complete the process all by yourself, guiding you every step of the way.
TurboTax is among the most highly rated tax filing software in the market, currently. It was developed by Chipsoft, which was later acquired by Intuit and rebranded as Intuit Consumer Tax Group. Available for both state and federal tax filings online, it comes in different versions like TurboTax Deluxe, TurboTax Premier, etc.
TurboTax is a boon for people who feel at sea when it comes to tax filings. It handholds the user through the process, providing them with a step-by-step guide. It has a reputation for precise and correct calculations and offers a return guarantee in case of any discrepancy with the IRS.
Let’s take a look at some of the comprehensive features provided by TurboTax.
- Searches over 350 tax deductions and credits to make sure the user receives the maximum refund.
- Automatically imports your W-2, 1099-INT and 1099-DIV information.
- A comprehensive final review before the submission of the return.
- Cloud hosted and mobile facility to access the software on-the-go.
- Users can file state as well as federal taxes online.
- The user can take a photo of the form from their mobiles and the entire information will be recorded by the software.
- ItsDeductible, a feature that lets you calculate the deductible of donated items; this feature is only for paid users though.
- 24 x 7 support available from the TurboTax team.
- Uses an interview process — questions on career, your donations and expenses — to make users comfortable about the process and gather all the information.
- Guarantees maximum returns and offers a full refund on your purchase if you find higher refund through some other source.
- Automatic import of previous year’s tax return.
- There is an option to get access to a CPA by paying more, under TurboTax Live version.
TurboTax has been rated highly by over a million users, including small-sized firms and individual tax filers. Here’s why it is considered to be one of the easiest and the best options available for filing tax returns online.
- You can import your W-2 forms automatically to the software by clicking a picture.
- TurboTax offers its users the option to use it on-the-go through its mobile and cloud solutions.
- Extremely user friendly with a step-by-step guide to filing tax returns throughout the process for novices.
- It allows its paid users to keep track of their expenses year long through its expense tracker feature and ability to store receipts from your mobile phone.
- SmartLook allows you to get access to an expert and have a video call with him where he guides you through the areas of your return that need attention.
- The users have an option to pay for the software out of the tax refund they’ll receive if any.
- Guaranteed maximum and fastest refunds among all other tax filing methods in the market.
- The software allows you to opt for Audit Defense in case you get audited by the IRS, wherein it grants you a complete package of a tax professional who will defend you.
- An all-inclusive solution for filers who need guidance at all stages; it’s interview process and live chat support, along with a banner on the top that tracks your progress makes sure that you are never lost during the entire process.
- The software is always up to date with the latest changes in the tax laws and constantly updates itself after the IRS releases the tax announcements for the year.
- The calculations are completely accurate due to multiple error checks and a comprehensive final review before ultimately filing the tax return. In case of any error in the computation of the return and a penalty imposed on the user henceforth, TurboTax takes full responsibility for refunding the damages imposed.
- The software has the feature to import your previous year’s tax returns, which help you file your taxes in the current year.
For tax filers, the most basic question that arises while filing the return is whether to do it themselves using an online software like TurboTax or hire a professional accountant and handover the entire work to him.
Hiring a CPA has its own benefits, the most prominent being that you don’t need to do anything on your own. You simply hand over your financial information and forms to the accountant and the rest is taken care of. However, the services of a CPA can definitely be a lot more expensive than using TurboTax and therefore, is generally recommended for people who have a high annual income or whose tax situation is too complicated for self-filing.
Here’s when you should go for hiring a professional accountant over doing your own taxes:
- You are self-employed with multiple sources of income, for example, multiple rental properties, freelancing with numerous clients, etc.
- You have absolutely no idea about how to file your tax returns and you have never done it before. It is best to consult a professional who can sit down with you and explain the nuances of tax filing.
- If your taxes are complicated and can’t be approached straightforwardly, it’s best to get a CPA onboard with whom you can discuss the criticalities and then file the returns.
- If you have the money to spare but no time, hiring an accountant is the best way to go. You hand over all the information to him and focus on your work while he does all your returns.
Hiring a CPA is a lot more expensive than using TurboTax and can cost you about $200 for an hour-long consultation. Here’s when you should opt for an easy-to-use software like TurboTax to file your tax returns:
- You have the basic knowledge of tax filing; while TurboTax is extremely user friendly and will guide you throughout the process, it definitely helps to have the basic understanding of taxation.
- If you have the time to do your own taxes, nothing’s better than using the online filing option since it will save you a lot of dollars.
- Your tax situation is fairly simple and does not involve any major complications that need to be dealt with by a professional.
- If you don’t want your financial information in the hands of an external party, doing your own taxes via TurboTax is the way to go, where you can control every aspect of your tax returns.
While hiring an accountant means that you have an expert to refer to, he will not be responsible for any discrepancies in the returns filed. In the end, if you have to face any backlash from the IRS due to errors in the computation, you’ll be responsible for the damages.
Using TurboTax exempts you from the responsibility of paying for any damages if imposed by the IRS since the software guarantees utter accuracy and also a full refund if it is unable to get you the maximum refund.
Hiring an accountant will always cost you a lot more. Therefore, it depends on your financial situation and how comfortable you are with your taxes whether you hire a CPA or opt for TurboTax.
Along with the free edition, TurboTax offer 4 more paid versions which users can opt for depending on what kind of assistance and professional situation they are in. Let’s take a look:
- TurboTax Free: The users don’t have to pay anything for federal taxes and for state taxes it charges $29.99. You can file your simple 1040EZ and 1040A through this edition. It transfers your federal information to the state filing and guarantees maximum refund with a step-by-step guide.
- TurboTax Deluxe: The Deluxe edition is used with an objective to maximize your tax returns as the software searches over 350 tax deductions to help you get the highest refund. It charges $59.99 for federal tax return and $39.99 for state returns. You also get the ItsDeductible feature in this edition which lets you compute the deduction on your donations, along with the SmartLook feature that gives you access to a professional on the team for any queries.
- TurboTax Premier: Priced at $79.99 for federal returns and $39.99 for the state, the Premier edition includes everything offered in the Deluxe version plus it covers your investment income and income for any rental property you own. It imports your investment information from over a thousand financial institutions and works with you to find your cost basis, providing with one-on-one assistance. You can also import your previous year’s tax returns from other portals to TurboTax.
- TurboTax Self-Employed: Priced at $119.99 for federal returns and an additional $39.99 for the state, this edition takes everything included in the Premier version and adds focus on personalized business and personal income. This is a preferred option for freelancers and sole proprietors since it searches for industry-specific deductions for you to maximize your refund. QuickBooks self-employed feature available for expense tracking all year-round.
- TurboTax Live: For individuals that want the best of both worlds, i.e, ease of filing online plus the guidance of an expert CPA, TurboTax Live is the edition to go for. Priced at $179.99 for federal returns and $39.99 for the state, this version includes everything offered in the self-employed version plus it offers the advice of an expert or a CPA on demand, along with a final review of the return by him for 100% accuracy. You can connect with your CPA at any time through your computer or mobile, where he can see your tax screen and guide you. It is best suited for individuals with complicated tax situations.
Looking at the features and the benefits offered by TurboTax, with a range of editions to choose from catering to every type of tax filer, it should be the preferred option for filing taxes.
Its user-friendly interface and the comprehensive guidance system in place makes it easy even for a beginner to quickly adapt to the process. It saves the extra money you’d otherwise pay to an accountant for a simple tax return.
Even if you want an expert onboard, the TurboTax Live version gives you the option, and at a lot lesser price. Therefore, TurboTax is definitely one of most easy-to-use softwares available in the market for filing tax returns, that guarantees complete accuracy with the maximum and fastest refund thanks to its extensive research on tax deductions.