TurboTax review: Filling tax forms is not that hard

I mentioned before, in my post about the cost-effective tax preparation, that I intend to use TurboTax to file my taxes. Well, that’s exactly what I did.

I used TurboTax Premier Federal + e-File + State 2010 version, and here’s my review on it.

First – what’s included. The software comes on a CD, and you can install it on a Windows or Mac OS X machine. I installed it on a Windows XP machine, and the installation went very smoothly, without any problem. Right after the installation was done, the program downloaded the updates from the TurboTax server, so I was sure it is up to date.

Note of caution, though. Although I started filling my taxes early February, the best time for it would be right about now – mid-March. The reason is that the tax software developers (and this is true not only for TurboTax, but also for the competitor’s H&R Block At Home as well) have still some of the lesser used forms to implement and bugs to fix. I for example encountered a bug with the IRA Rollover report in the TurboTax software, which was fixed about a week after I started filling the forms for the first time. You have until mid-April to fill the forms – don’t rush, wait till all the updates are out there.

Another reason to wait a bit is the software price. Early purchasers pay the most, but now, mid-March, the software is available with a lot of discounts (at Amazon they offer 25% off).

User Interface: I’m impressed. I compared to the H&R software,  and the difference is eminent. The interface is smooth, easy to look at, and very clear. The integration with the community site (on the right side of the screen) is very helpful. The bookmarking feature (“flags”) is very useful if you want to mark a place to come back to.  Errors are clearly marked.

Ease of use: Well, it’s easy. Really. They advertise it as “GPS” of the tax software, and it is actually a very good metaphor. The program has the “Easy Guide” feature which guides you through all the topics and asks questions that help you fill in the data (that’s called “interview”). You can choose not to use the “Easy Guide” and fill the fields directly, and still have the benefit of the clear descriptions, guidance and the ,excellent user interface. You can switch to the “Easy Guide” at any stage and for any topic and field, even if you don’t use it for other fields, which is very comfortable. It is advised for more complicated topics, especially the schedules (Schedule A used for itemizing deductions, Schedule B used for the interest and dividends income, and Schedule D for your capital gains calculations).

For me, one of the benefits of TurboTax over H&R Block At Home is the fact that you don’t have to fill all the fields. It’s very comfortable, especially if you’re doing “mock” reports, like me. What does it mean? It means that if you don’t want to fill the address right now – you don’t have to (H&R software requires it), you can leave the SSN empty up until the minute you file, etc.

Data Import: That’s a very useful feature. You can import your reports from the previous years (if you used a tax software to make them, either H&R Block At Home or TurboTax), and that will save you the need to retype your personal info (unless it changed). More interestingly, you can import your financial and tax forms from the form providers. I imported my 1098 from the mortgage bank directly into the software, my W2 from the employer, my 1099 forms, etc. The list of TurboTax partners is very extensive, and importing the forms directly into the program saves you the time and effort of typing the data, and also saves you from making mistakes while typing.

Unfortunately not all the form providers are partners, and there may still be forms you’ll have to enter manually – but even so, importing saves you the effort for those you can import.

Flexibility: here, H&R Block At Home has an advantage. TurboTax have four different programs for different levels of tax reporting:

  • TurboTax Basic – For people who only need to file the simplest tax return forms, with no schedules. Good for people who only have W2, 1099-INT and 1098 forms (salaries, interest income and mortgages).
  • TurboTax Deluxe – Includes all the functionality of the Basic version, and also includes 1 state tax return, and deductions and credits maximizer (feature that verifies that you claim all the deductions and credits you’re entitle for). It also includes the “Audit Risk Meter” – a feature that allows estimating the chances of audit for your return. Note, that some returns are chosen for audit randomly, so you can always be audited. But the Audit Risk Meter checks for the known potential audit triggers, which may add additional risk of being audited. This is what most people who don’t have stock investments actually need.
  • TurboTax Premier – Includes all the functionality of the Deluxe version (including 1 state tax return), and adds to it the functions needed for capital gains reports, rental property income and expenses and a 401(k) calculator to help you improve your retirement savings, without reducing your take-home income. This is the version that people with stocks, employee stock plans, mutual funds, etc need. Also, people who own rental property would probably use this version.
  • TurboTax Home & Business – This version includes all the Premier features, and adds to them all the forms needed for a sole proprietorship. Self-employed persons will need this version, and it also includes 1 free state return.

All the versions include up to 5 free federal e-files, for state returns e-files are available (for select states) for additional fee of $19.95.

The competitors, H&R Block At Home, have only three layers: “Basic”, “Deluxe” and “Premium”.

They slightly overlap, but roughly it can be said that H&R Basic matches the feature set of TurboTax Basic, H&R Deluxe matches the features of turboTax Priemier (excluding the rental income and expenses), and H&R Premium matches TurboTax Home & Business. H&R software is generally cheaper.

In the next post I’ll cover the review of the filling and filing process and the refunds.

Your Little Advisor

This entry was posted in Reviews, Software, Taxes - General and tagged , , , . Bookmark the permalink.

2 Responses to TurboTax review: Filling tax forms is not that hard

  1. Pingback: TurboTax Review – part 2 - The Little Advisor

  2. bryan says:

    Excellent review of TurboTax and all of the different features offered in the verions. I would also add that TurboTax has very good customer support with online help via chat and email. I included this feature in my review on my website but I would really like to mention your review on my website if you don’t mind?

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