For the past several years, TurboTax has impressed us with its clear language and simple step-by-step tax prep, and Intuit's offering for the 2010 tax year is no exception. The software continues to offer a straightforward and streamlined interface with a few feature improvements worth noting. Sure, you'll pay a little more for TurboTax than its competitors, but its ease of use could make it worth it for some.
The first thing we want to point out is that TurboTax comes in four versions--Basic, Deluxe, Premier, and Home & Business--each of which offer both an online prep option or a software download. All of the online apps let you start and e-file for free, while the downloads cost a bit more but include more than a single e-file. (See our note at the end of this review for help with choosing between the two.) The eight options range in price from $19.95 to $99.95 and offer some diversity in features, but the overall user experience is largely the same, which is why this review encapsulates all the versions available. We will call out some key differences as we go along.
Installation and setup
If you elect to go the desktop install route, expect TurboTax to take the standard 10 to 15 minutes to install, scan for updates, and download those updates before you can get started. If you're filling out your taxes online, you'll need to only wait for a secure connection to go ahead with the online product; also, expect to accept some terms & conditions on the first round ("their lawyers made them do it" is the amusing text accompaniment). Also as with most tax prep competitors, TurboTax can import previous year's returns from a variety of courses, and provides forms for filing amendments and extensions.
Features and interface
One noteworthy update for 2010 is the addition of many more importing options. As before, any prior year tax return in PDF format is accepted. Intuit has also added support for W-2 importing from more than 250,000 employers (though not ours, sadly) as well as other financial forms--1099-INT, for example--from more than 300 financial institutions, banks and credit unions. Further, TurboTax has teamed up with Mint.com this year to allow automatic calculation of interest income for users who connect their accounts.
TurboTax also carries over some useful features from the previous year, such as the capability to flag a page to return to later, for instance, if you need to look up a Social Security number, but aren't ready to interrupt your work flow to get up and find it. These flags came in handy, especially in the desktop version where they're visible at all times.
Further, TurboTax takes extra steps to ensure no errors are made on your return by offering error reporting as you go. You can ignore the error flag, of course, but tending to potential problems as they arise in the interview process can make the final error check smoother and shorter. A useful questionnaire at the beginning of the interview also helps to ensure that your filing status is set correctly and that you are presented with all the appropriate fields throughout the process.
As with the previous year, TurboTax 2010 has a visually appealing interface, with a top menu module that clearly lays out the steps ahead and those you've completed. All is not roses, however. For instance, the summary screen that appears after you finish each segment is pretty obtrusive. Having to scroll down the increasingly long list of modules you've already completed just to move on interrupts work flow on the desktop and online. (We appreciate being able to revisit sections of the tax interview, but TurboTax could just as easily add a button at the top of the summary page or use a drop-down list to fit this recurring section summary sheet on one page.) Also, we found that skipping unnecessary sections isn't as straightforward as with other tax prep software we've used.
The capability to import forms has long been a TurboTax hallmark. The program can grab W-2 details from employers using participating payroll processors, investment information from banks and brokerages like Charles Schwab and data from programs like Quicken, Quickbooks, or another program that uses the TXF format. As mentioned before, the sheer number of supported institutions is impressive. H&R Block's app can now do this too, though TurboTax continues to import forms from far more financial institutions, making it ultimately more effective for a greater number of taxpayers.
When deciding among TurboTax's various levels of tax prep, there are a couple other features to consider. While the free or Basic version is more than suitable for users with one form of income, minimal investments, and a few interest write-offs, those with more complicated filing needs may need to upgrade. For instance, the Deluxe version is a better option for those who experienced major life changes (buying a home, getting married, changing jobs) over the past year, since it includes extra tools and functionality for maximizing related deductions. Likewise, Premier is the version to go with if you have a rental property or a wide variety of investments, and Home & Business will provide extra guidance for those who are self-employed.
Help and support
TurboTax's peer-driven Live Community continues to supplement the FAQs, help files, and videos. The online version also gives you a few other options for support, such as contacting TurboTax or a tax expert directly. Of course, the latter doesn't come free.
Help from the pros will cost you. Live tax advice is available from 7 a.m. to 7 p.m. PST on weekdays. It costs $30 for the first 20 minutes of phone time, and $20 for each additional 20-minute block. In addition, for $40, a real person can comb your review for mistakes. While those with more complicated cases may see value in this, TurboTax's self-service prep software should be good enough on its own to obviate the need for additional eyeballs.
In case of an audit, TurboTax's free downloadable audit support center is a well-designed guide to the four audit types, and includes some templates you can send to the IRS. Or, you can pay Intuit about $40 to represent you if Uncle Sam looks askance. One-on-one audit assistance comes free with H&R Block's already cheaper application, though Intuit claims that the vast majority of audited taxpayers receive the same letter and will do fine with TurboTax's audit wizard.
TurboTax certainly isn't the cheapest option, but it remains the clearest-worded interview with the most broadly beneficial tax-info importing abilities. Its bundled tools make it worth the extra cost for those who don't anticipate needing personalized help.
A note on online versus desktop prep: While there's no rule, we tend to think of online tax prep as ideal for those filing individually--it's sometimes less pricey for singletons and stores your encrypted return on the provider's server. Linux users may also prefer online prep, since most makers of tax software don't program downloads for the Linux platform. Desktop prep may be better suited for families, who can file up to five Federal e-files as part of a single software license, or for those who would rather store their data locally on their computers.