The largest player in the industry, TurboTax is consistently rated one of the best in terms of usability. However, prices can skyrocket if you have a complicated tax situation. The Free File edition includes free federal and state filing but has an income limit of $31,000 ($60,000 for active military).
- Adjusted gross income of $31,000 or less, or
- $60,000 or less for active military, or
- Eligible for the Earned Income Tax Credit
- Supports all common forms
- Free state e-filing
TurboTax Federal Free Edition Requirements
- Taxable income of $100,000 or less
- Must file 1040A or 1040EZ
- Must take standard deduction
TurboTax is the leader in the tax prep software industry, and for good reason. Its online products score high in nearly every category, and it's unusual to find an expert review that doesn't place TurboTax first in terms of quality. PC Mag commends the user interface, navigation, and top-level support but dings the cost of TurboTax Deluxe. Personal finance blog The Simple Dollar considers TurboTax products to be the most intuitive and reliable, an assessment generally shared by The Wirecutter, whose TurboTax review goes on to say that the interview-like format is akin to working with a paid tax preparer.
There are several editions of TurboTax, but the underlying software and features are the same. We focused on the two least expensive options: Free File and the Federal Free Edition.
The Federal Free Edition, open to anyone with taxable income less than $100,000, includes free federal e-filing and is backed with a 100 percent accuracy guarantee. Audit support, which provides access to a tax professional who can answer questions and tell you how to prepare and what to expect, is free. Audit Defense (an extra $39.99) provides an audit representative, but some reviews indicate it may not be worth it. Users who have tax or technical questions can turn to the online guides or chat support; a paid upgrade is required to speak with a tax professional on the phone. To use this free version, your return must be simple -- i.e., you will file a 1040A or 1040EZ. There is no opportunity to include itemized deductions or miscellaneous income. E-filing a state tax return cost $27.99 at the time of writing; up until Feb. 16, it was free (and the software was marketed as Absolute Zero).
The Free File version (alternately called TurboTax All Free and TurboTax Freedom Edition) is an option for households with adjusted gross income up to $31,000 or eligible for the Earned Income Tax Credit. This tax prep package supports more complex tax situations, includes free state e-filing, and comes with the guarantees and support included in other versions. The strict requirements, however, limit its usability.
We read many user reviews that groan about filling out all the templates with the expectation that filing through the Federal Free Edition will be free, only to discover that extra charges apply. Of course, after doing all the work it's tempting to just pay and be done with it. A Turbo Tax review at Amazon from several years ago sums up users' dilemma: The product is excellent, but the pricing structure is suspect. Indeed, users have railed against TurboTax Deluxe (starting at $34.99, plus $36.99 for a state e-file*). Previously this package let filers include capital gains and other tax schedules, but that's no longer the case. To calm the waters, parent company Intuit has offered a $25 credit to some users who were caught off guard by the change.
While TurboTax isn't the cheapest tax software around, reviewers note that it sure beats paying a tax professional. But if your situation is a bit more complex, and you don't meet the Free File requirements, try a competitive product that supports more tax schedules and has a lower fee for state filing. Even if you live in a state without personal income tax, there are better, less expensive tax software products.
*Prices subject to change.