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 rivals and usually bests the competition. The IRS has not made all finalized forms available at this writing, so we were unable to test some tax topics. Stlll, we jumped at the chance to take an early look at last year’s Editors’ Choice winner for tax software. We’ll come back to this preview and update it and add a rating once we have access to final code, but so far it looks excellent.
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 had a similar service for years.
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 if you have a simple return.
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.
The TurboTax family remains the most expensive among the sites we’ve reviewed. FreeTax USA and Credit Karma Tax are still totally free for state and federal filing, 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.
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 is a slightly different animal, one that Intuit introduced three years ago. This service lets you connect with a CPA or EA (Enrolled Agent) 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. H&R Block offers a similar service (price unavailable at this writing) that allows you to communicate year-round with a CPA, EA, or Block tax expert.
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’s evolved quite a bit 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. It takes a conversational and friendly tone. You may like this friendliness, especially if you’re nervous about your taxes or this is your first time using a tax prep site. Other users may just want to get on with it. In any case, the extra chumminess isn’t overdone, nor will it slow you down (usually).
Getting Started With TurboTax
Once you create an account or sign in with an existing one, TurboTax helps you select the correct version for your 2020 taxes. It displays several life situations that might affect taxes (such as owning a home, having children, selling stock, or paying off student loans) and recommends the best solution for you. Once you’ve entered the site, it asks how you did your taxes last year and helps you import that data from TurboTax or another personal tax preparation website. Then it once again asks you to indicate what life situations apply to you.
You answer TurboTax’s questions by entering data in blank fields or selecting from drop-down lists of options.
If you’re using TurboTax for the first time, you have to provide answers to the site’s questions about your personal background, including your address, Social Security number, and occupation, along with several other queries. You can also just scan the bar code on your driver’s license to get that basic data entered. If you’ve used TurboTax before, this information will be entered automatically. When you come to issues that may be confusing, like filing status and dependents, TurboTax Deluxe asks questions and provides extra guidance, just as sites like TaxSlayer do. As you finish, you see a summary of your personal information. The service also asks whether you want to subscribe to MAX Defend and Restore, which includes full audit representation, help with identity theft monitoring and identity restoration, and priority care, for $50 for the year’s taxes.
At this point, you’re ready to move on to the real meat of the site—entering your income, identifying your deductions and credits, and taking care of other tax-related situations. You can import your W-2 if your employer supports this or snap a photo to have your details transferred to the site. Sometimes you click through a series of questions, while other times you need to complete blank fields on a form.
A Clean, Lean Look
TurboTax has pared down its user interface considerably over the years. It looks great, yet still provides access to the tools you need. A vertical toolbar on the left side of the screen divides the site into My Info, Federal, State, Review, and File. There are links to other tax tools here, including an outline of the site’s content and a searchable alphabetical list of tax forms and schedules. You can also click here to flag a page that requires attention later. This link is also available on the main screen, similar to the bookmarks in TaxAct Deluxe. I expected to see these featured more prominently since they’re important tools, and since the site’s primary navigation tools are minimal. As it is, you have to click the Tax Tools link at the bottom of the left vertical pane and then click the barely visible Tools button beneath it.
The bulk of the screen is reserved for the site’s actual data-gathering questions and answers. Two icons (Search and Help) in the upper-right corner open a pane that slides over from the right side of the screen and does not obstruct your view of the current page. More on those later. There’s also a link that opens a screen containing information about upgrading to TurboTax Deluxe Live. TurboTax Deluxe makes much better use of screen space than Jackson Hewitt does.
Providing the Details
The path TurboTax Deluxe takes is similar to one you would take if you were working your way through the IRS Form 1040. It first asks about income, then deductions and credits, then other tax situations. As you move into the income section, it first asks you several questions about income you might have–some of which would kick you into a more expensive version of TurboTax. You just answer Yes or No to the queries on this page. Then it displays a list of all the income topics that might apply to you. If you think anything is missing, you can ask to see the whole list, including Wages and Salaries, Unemployment, and Interest and Dividends. Click the Start button next to one of these (like Other Common Income), and a multiscreen wizard opens that provides more information, asks questions, and provides blank fields or multiple-choice lists for your answers.
The main sections of TurboTax have home pages that display the tax topics contained there.
When you’re finished with one income type, you click Done to go back to the income list. The Start button next to the topic you just completed changes to Edit/Add, which allows you to go back and make changes. Once you’ve visited all the entries there, you can click Wrap up Income to move on.
The other two main sections of TurboTax (Deductions & Credits, Other Tax Situations) work the same way. If you make your way through your tax return sequentially, answering all the questions posed, you shouldn’t get lost (even if you have to use the Back button occasionally). You can always use the toolbar at the top of the screen or the Topic List if you have to return to a faraway section you already visited, though TurboTax’s site outline is not as detailed as FreeTaxUSA’s.
TurboTax encourages you to provide more thorough documentation than competing sites, such as Credit Karma Tax; this could be a lifesaver if you’re ever audited. When you enter charitable donations, for example, it asks you to select things such as the type, the recipient, amount, and frequency.
Understandable Help From Intuit
There was one advantage to using the actual IRS instructions when you prepared your taxes in the old days: They were comprehensive. They may have been difficult to understand if you weren’t a tax preparer, but the answer to your question was in there, somewhere.
Personal tax preparation websites couldn’t be expected to be so all encompassing. They’d collapse under the considerable weight of the tax code. But the explanatory content on these sites has been rewritten so many times and expanded over the years that it’s usually easy to understand. TurboTax does an especially good job here, in terms of both clarity and accessibility and liveliness. It often provides brief, simple explanations of tax topics as it asks its questions. Many words and phrases are hyperlinks that open windows containing additional detail. Often, there’s a question mark or Learn More link that opens context-sensitive help in the right vertical pane. Sometimes, TurboTax even guesses at a question you might have and provides related FAQs. Competing sites work similarly, but TurboTax and H&R Block Deluxe are the best at this.
When you click the question mark link at the top of a page, the TurboTax Assistant opens in that pane. This is an innovative, interactive tool that allows you to enter a question and see links to corresponding FAQs and other site-related information. It converses with you in a friendly manner and walks you through your query until you’re satisfied. H&R Block Deluxe has a similar tool. You can also call phone support (Spanish-speaking representatives are available).
Though the TurboTax Assistant works well, I found it faster and often more helpful to click the Search link and enter a phrase or question. Besides providing a link to the relevant data-entry page in TurboTax, the vertical pane that opens displays articles and FAQs that can answer your question. Much of this content comes from Intuit itself, but some of the responses come from TurboTax’s online community. This means that you may get an answer from Intuit staff, or you may see a reply that came from a non-professional who was visiting the community. In some cases, these clutter up the list of search results, which doesn’t happen in H&R Block Deluxe. These Q&As now reside within TurboTax itself instead of on a linked website, which I was happy to see.
TurboTax’s ExplainWhy feature tells you how a specific answer was calculated.
There’s another help feature that I like a lot. On many pages throughout the site, you’ll sometimes see the phrase “ExplainWhy” after you’ve completed a section. Click it, and TurboTax explains briefly what led up to a particular answer, based specifically on your situation.
Checking Your Work
When you’ve come to the end of your data-entry chores, TurboTax Deluxe’s final review, CompleteCheck, examines your return for accuracy. If it finds any errors, it helps you correct them. TurboTax Deluxe also transfers pertinent data into your state return and tell you about any additional entries you need to make there. Finally, you can pay and file.
Many Security Layers
Intuit’s Tax Return App follows the same Q&A that the browser-based version does, offering help along the way.
TurboTax security specialists work with the IRS and state revenue departments to prevent fraud. This dedicated staff is constantly monitoring the site and performing internal checks and external tests. Stored data is always encrypted, as is your return when it’s transmitted to the IRS and state agencies. The site supports multifactor authentication and Touch ID on its smartphone app. You can see a history of your logins and the devices used to access your account, and you’re always notified of any unusual activity on your account, like a password change, payment method update, or login from a new device.
Taxes on the Go
This interactive help tool is available on TurboTax’s mobile apps, too.
It’s hard to imagine that you could prepare and file your income taxes from your smartphone, but TurboTax and competitors like H&R Block make that possible. The TurboTax Return App is available for both iOS and Android. The apps offer the same tax topics that are available on the browser-based version, so you can prepare and file even a complex return using them.
Intuit offers two other mobile apps. You can enter a few details about your life to get an estimate of your tax refund by using TaxCaster. ItsDeductible is a tool you can use all year to record your charitable donations. At tax time, you can sync that data with TurboTax.
Clearly there’s a lot to like in the latest version of TurboTax, the service that was our top choice last year. That said, it’s not finalized yet, nor have we finished looking at the competition. TurboTax is certainly looking better than ever this year, but other services try to improve their offerings every year, too. There’s always the chance that a top competitor like H&R Block or TaxAct or even a slightly darker horse like TaxSlayer could surge into the lead. Check back here in a few weeks to see our final, rated review.
While you’re thinking about your own money, you should read our coverage of the best personal finance software, and if you run a small business you might take a look at our overview of the best accounting software.
Intuit TurboTax Deluxe 2021 (Tax Year 2020)
The Bottom Line
TurboTax Deluxe offers thorough explorations of tax forms and schedules and an outstanding user experience to new and returning taxpayers. Its tax interview and help system are both improved this year.
Intuit TurboTax Deluxe 2021 (Tax Year 2020) Specs
|Imports Competitors’ Returns||Yes|
|All Major IRS Forms and Schedules||No|
|Comprehensive Navigational Outline||No|
|Phone Support for Tax Topics||Yes|
|Hyperlinked Help In Interview||Yes|
|Searchable Help Database||Yes|