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 2011 tax year is no exception. Whether you're an experienced taxpayer or you're fairly new to the system, TurboTax can help you file.
The first thing I should point out is that TurboTax comes in four versions--Basic, Deluxe, Premier, and Home & Business--each of which offers both an online prep option or a software download. All of the online apps let you start a single e-file for free, while the downloads cost a bit more but come bundled with more than one e-file.
Features and interface By far the best thing about TurboTax 2011 is its simplicity. From its cleaner interface and more-straightforward language to its addition of a new unemployment section, TurboTax has clearly incorporated user feedback in its design.
If you're new to the program, the first thing you'll notice is that TurboTax doesn't let you interact with the actual tax form--which is good. Rather, it poses questions in plain user-friendly language, then, it populates the proper forms for you, behind the scenes. And if there are any redundant questions between the federal and state forms, TurboTax will automatically duplicate your answers appropriately. This way, no one gets confused by the hypertechnical IRS jargon that's typically found on these forms.
To further minimize human error, TurboTax lets you import your W-2 and 1099 forms directly from your employer or payroll provider, so you don't have to input your wages by hand. It can also grab investment information from banks like Charles Schwab as well as programs like Quickbooks and Mint.com. While other tax software suites also import financial information, the sheer number of institutions supported by TurboTax is certainly impressive.
While TurboTax's interface is just as clean as ever, one noteworthy addition is its new refund monitor, which sits at the top of the screen and keeps a running count of both your federal and state tax refunds. As you answer your interview questions, the figures change, and, of course, the more deductions you list, the higher the figures can potentially move. While I won't say it made doing my taxes "fun," I will say it made me want to plow through my interview questions quickly and accurately.
As for deciding among TurboTax's various levels of tax prep, there are a few features to consider. While the free or Basic version is more than suitable for people 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 One thing I particularly love about TurboTax is its Help Center, which always sits conveniently on the right side of the screen. More than your typical search-based Help Centers, TurboTax's offers an FAQ as well as access to TurboTax's live community of users, many of whom have probably asked or answered questions similar to yours. On top of that, TurboTax now offers live tax advice from experts for free. This is a big change from previous versions, which charged extra fees for live professional help, on top of the price of the program. What's more, live expert hours have been extended to between 5 a.m and 9 p.m. PT, seven days a week.
Finally, TurboTax even conducts an audit risk analysis before you file, in case any sections of your form raise red flags.
Bottom line With only one included federal e-file (five for the download version) and an additional fee for state filing, TurboTax certainly isn't the cheapest tax software out there. However, it does offer the most clearly worded interview and the most comprehensive help and support of all the options I've seen. Plus, you can actually go through the entire Web-based version for free, and pay only if you decide to follow through and file. Overall, I highly recommend TurboTax to all users, especially those who feel less than comfortable with the tax-filing process.
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.