By Jay Garmon
TurboTaxis the headline star in the tax preparation software world, but is its reputation a product of great performance, or simply great marketing? We break it down in this review.
First, a word about my tax return, which I will be using to test-run TurboTax and a few other tax preparation Web apps. In , I received unemployment pay, did freelance work, started a new job for an out-of-state employer, paid down a student loan, had a child in daycare, bought one house and sold another, and maintained a home office as a primary workplace. In short, mine is not a simple tax profile, and if these tax apps can handle what I throw at them without making me want to tear my eyeballs out, they should be able to stand up to the typical taxpayer pretty easily.
Also of note, I used TurboTax last year to prepare our household taxes, so I was able to import my previous year’s tax return directly — an option not directly available (or functional) with other tax prep apps.
Like TaxActand TaxCut, TurboTax online lets you calculate a return without paying for anything or creating an account, but you can’t save your work until you create a profile, and you can’t file or print a return without creating an account and paying the filing fee. I selected the $29.95 TurboTax Deluxe (plus state) online and signed in with my existing account.
Since TurboTax is made by Intuit — the same outfit that brings you the excellent but upsell-ridden Quicken— it should come as no surprise that TurboTax has more than a few screens that prompt you to buy additional services or products. This begins almost immediately with a prompt to pay $14.95 for additional on-call tax prep assistance, a fee that is requested beforeyou even begin filing a return. Once I declined that, I was required to review the system requirements for TurboTax — it said that Chrome wasn’t a supported browser, but I had no trouble using it — and agree to the TurboTax license terms.
The EULA screen was the first hint that TurboTax has gotten much cleaner and easier since last year: The license agreement screen includes the caveat our lawyers made us do it. The advisories and instructions found throughout TurboTax are written in a simple, human, friendly voice that really made a surprising difference in the pain of filing a return.
From there, TurboTax automatically imported my 2008 return from its records, which at this point largely consisted of drawing in the names, dates of birth, and social security numbers of me, my wife, and my daughter. New users would simply have entered this information manually. This is when the return began.
INTERFACE AND EASE OF USE
TurboTax has a very simple interface that is almost too idiot-proof. It uses the same Interview metaphor as its competitors, but with two key areas of excellence. First, TurboTax does a great job of explaining what area of your return it is dealing with, both in terms of the particular IRS form and section (Like Jay’s W-2, box 1) and your life (Jay’s Income from Wages). Second, TurboTax has far and away the best explanatory pop-up windows of any tax prep software I’ve yet seen.
In most cases, you can choose from a very obvious checklist of options, and then TurboTax unlocks the appropriate questionnaire and meticulously walks you through it. You can follow the path that TurboTax lays out for you by selecting the Guide Me option at the beginning of every section — and review your entries by using the Back and Continue buttons at the bottom of every screen — or you can skip around to your satisfaction by selecting the Explore option.
Data entry, where required, is simple and straightforward. Form fields follow the same order and labeling conventions as those found on your physical tax documents. All of which is par for the course with every tax prep system I’ve reviewed, but TurboTax goes an extra mile thanks to Intuit’s other products. Quicken users will recognize the income data entry conventions. ItsDeductible users will find the charitable donation interface — the best I found in any tax product — surprisingly robust and user-friendly.
The downside of this hand-holding? TurboTax takes a bit longer to create a return, as all the checking and rechecking eat time and can start to feel repetitive towards the end of the process.
TurboTax really impressed me with its refinement. Both TaxAct and TaxCut offered to import my employer W-2s from our online payroll service, but only TurboTax got the functionality to work. That’s the Quicken auto-import functionality paying dividends in TurboTax.
TurboTax was also the only product to handle my two-home-offices-in-the-same-year issue with anything approaching ease. It still took a bit of finagling to communicate which set of utilities and mortgage interests applied to which home office, but TurboTax at least made it possible to enter these figures explicitly. The competitors seemed stymied by the fact that I could even havetwo home offices in the same year.
The price of all that Quicken integration is that you are reminded over and over how much easier your return would be if you simply used Quicken to track finances and directly import data. I counted at least half a dozen Quicken or related upsells, and when it was time to discuss filing my return, a Quicken-branded Visa gift card was one of the payment options. Seriously. There were also upsells for a review of your return by a tax professional, for upgrades to more expensive versions of TurboTax, and for retaining the services of an audit counselor should the IRS decide to ream you.
All of these appeared beforemy return received its audit risk assessment, and before TurboTax let it be known that if I owed any additional taxes or penalties, the company would pay them. Essentially, Intuit proudly stands behind their tax prep product, but before they tell you that, they want you to know you can pay them to be extrasure.
On the flipside, TurboTax offers some robust and simple direct deposit (and direct debit) options to get your return ultra-fast and ultra-easy. This level of polish was evident throughout the product, but it was especially nice to see it applied to getting me paid.
According to TurboTax, I am due $972 dollars from the federal government and I owe $135 to the Commonwealth of Kentucky. It cost me $66.90 to determine this, $29.95 for my federal and a pricey $39.95 for my state return. That’s the most expensive state return filing fee I’ve seen, and I got the sense TurboTax was discounting its federal product only to make it up on the state fee.
If I could describe TurboTax in one word, it would be polished. This is clearly a product that has been through some user testing, and all the features work well and stay out of your way. While the hour and 45 minutes I spent filing my return was slightly longer than my filing times in TaxCut or TaxAct, much of that was attributable to the extra, helpful screens that TurboTax surfaced to help me with my complex deductions.
Bottom line: TurboTax was the only product I’ve reviewed that helped me find enough itemized deductions to outpace the IRS standard deduction. Put simply, TurboTax found more tax loopholes for my benefit than anyone else, and when I compare the standard versus itemized deductions in TurboTax, the latter earned me an extra $180 on my federal return. The extra money TurboTax found for me more than made up for its extra cost. I bet you’ll have similar results.
You can also check out our Buyer’s Guide to find the best tax preparation softwarefor you.
- Very polished product
- Handles complex deductions
- Easy to import data
- Lots of built-in upsells
- Almost too helpful
- Expensive state fees
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