Comprehensive tax preparation with an exceptional user experience
Intuit’s TurboTax family of personal tax preparation software and services has a history of excellence that goes back more than 25 years. This year’s product line continues that tradition. Always known for an outstanding user experience, TurboTax packs a lot of substance as well as style. It offers thorough coverage of tax topics in an easy-to-follow interview format, and its support is top-notch as well. While it’s the most expensive option among our eight contenders, it’s also the best, and it wins our Editor’s Choice award for the 2020 tax year. Longtime users will notice this year’s versions move you through the 1040 a little differently—and more effectively—than before. Intuit is constantly refining TurboTax to make the experience as fast, friendly, and comprehensive as possible. These new versions now include proactive COVID guidance to help you with related issues like unemployment and stimulus payments. And they’ve upped the number of tax deductions and credits the online solutions search for, to more than 400. The company has also introduced TurboTax Live Full Service. This matches you with a dedicated tax expert who prepares your return based on the tax documents you upload. H&R Block has a similar service. How Much Does TurboTax Cost? TurboTax’s prices for federal returns have remained the same for the 2020 tax year, though the cost of state returns has gone up $5, to $50 each. The company is once again offering its Free Edition (free federal and state for 1040 filers; includes support for the W-2 form, the Earned Income Credit (EIC), and child tax credits). New this year: Through February 21, 2121, you can get an expert review of your return through TurboTax Live Basic at no cost. TurboTax Deluxe costs $60 for federal taxes. It adds the Schedule A, so you can determine whether you’ll itemize or take this year’s standard deduction. You’ll need TurboTax Premier ($90 for federal taxes) if you have to report on investment income and rental property. This version has been improved for 2020 to meet the more sophisticated needs of investors. TurboTax Self-Employed ($120 federal) lets you record income and expenses on a Schedule C and includes special guidance and features for self-employed individuals—along with a year’s subscription to QuickBooks Self-Employed. For more on details on taxes and self-employment, you can read Did You Work for Uber, Lyft, or DoorDash Last Year? Here’s What It Means for Your Taxes. The TurboTax family remains the most expensive among the sites we’ve reviewed. FreeTax USA and Credit Karma Tax are still totally free for federal filing (FreeTaxUSA charges $12.95 for state), though they lack a lot of the usability and support that makes TurboTax so exceptional. H&R Block, which has traditionally been TurboTax’s closest competitor, charges $49.99 for its Deluxe Online version ($36.99 per state filing). TaxAct has reduced its prices this year. Its Deluxe version is $24.95, but you’ll pay $44.95 per state filed. For more on paying your taxes without paying anything (including with TurboTax), you can read E-Filing Your Taxes for Free: Are You Eligible? Intuit says that its early prices are subject to change. Many tax websites, including TurboTax, start the season at lower prices than they finish it. This is a good reason not to be a last-minute e-filer. Our reviews are based on list prices rather than deal pricing, which is subject to change as the tax season progresses. Increases usually occur in March. TurboTax Live and Full Service TurboTax Live is a slightly different animal, one that Intuit introduced three years ago. This service lets you connect with a tax expert via video chat. These tax professionals can then see your screen if you allow it and do a line-by-line review of your return. You can communicate with them all year long, so they can help with tax planning during the offseason. TurboTax Live Deluxe costs $120 ($55 per state filing). Though TurboTax Live is a standalone offering, you can add it on even if you’ve already started preparing your taxes using any product in the TurboTax line (at different prices for each). H&R Block offers a similar service that allows you to communicate year-round with a CPA, EA, or Block tax expert. Don’t want to go the DIY route? TurboTax Live Full Service ($200 for the Deluxe version and $55 state) is another option. You upload your tax documents to a secure location and let a tax expert or CPA prepare your return. He or she will go over it with you when it’s done and answer any questions, then sign and file your return. Tax advice is available year round. Here, too, H&R Block provides a similar option Like the online tax prep websites themselves, H&R Block’s virtual professional services are less expensive than those offered by TurboTax. A Familiar Format Many personal tax preparation services still use a format similar to the one Intuit introduced for its desktop software products in 1993. And with good reason: It works beautifully, saving time, easing frustration, and dramatically reducing errors. Instead of shifting your attention between the Form 1040, related forms and schedules, IRS instructions, and third-party reference books, you go through the tax preparation screens one at a time in a logical order. TurboTax injects some personality into its lengthy online interview. TurboTax originated this trend of using a wizard-based approach to tax preparation, though it has evolved substantially over the years. The service alternates between stepping you through a Q&A and displaying a list of available tax topics. You provide an answer, click a button to advance to the next screen, and keep answering and clicking until the service says you’re done. Next, it combs through your return, lets you fix any problems, and helps you file or print the finished product after you pay for your federal (and state, if needed) returns. All this time, you never have to look at an IRS form or schedule, because TurboTax and its competitors complete them for you in the background. What you do see is expert help in the form of simply worded explanations of tax concepts throughout the process. TurboTax offers multiple help resources on its screens and has incorporated tax law changes from 2020. A Unique Personality Every tax preparation service has a personality of its own, made up of a combination of its tone, user interface, and skill at guiding you through its wizard without causing confusion. TurboTax’s personality is on display from the start, even before you start filling in dollar amounts.
