This review of Turbo Tax is going to be a little different from all the others out there. I’m not going to bore you to death listing every possible Turbo Tax feature when everyone else is already doing that. If that’s what you want you can see all of that right on the Turbo Tax site here. Instead, I’ll tell you why I use Turbo Tax myself and why I’ll never use anything else to do my taxes.
Why You Should Use Turbo Tax
Years ago I used to do my taxes by hand. I’d go to the post office and pick up hard copies of the 1040 forms and instructions and then go home and flip through the instruction booklet and fill out the forms myself. Then I’d make copies and mail everything in to the IRS.
Things were easier for me then because all I had to worry about was my salary, my wife’s salary, and a little bit of interest income. We didn’t own a house, so no mortgage interest or property tax deductions to take, and we had no kids or investments outside of our 401k accounts. We pretty much just took the standard deduction every year and since our tax return was so simple it just didn’t make sense to pay for an accountant or software program to do it for us.
But as our finances got more complicated with a house, kids, investments, and a side business, we needed an easier way to get our taxes done. I didn’t feel like paying an accountant to do the job when I knew I could do it myself, so about six years ago I started using Turbo tax to file our taxes.
If your finances are really simple, you don’t own a house, or have income outside of your day job, and you’re just taking the standard deduction instead of itemizing your deductions…you can probably do without Turbo tax and do your taxes by hand. But if you don’t feel comfortable doing your taxes by hand and don’t want to pay and arm and a leg for an accountant to do them for you, Turbo Tax is the ideal solution.
Benefits of Using Turbo Tax
Rather than list every possible Turbo Tax feature like others do, I’m just going to share my favorites.
Interview Style Questionnaire
Filling out your tax returns is not exactly fun, but Turbo Tax takes away much of the pain with a user-friendly, interview style questionnaire designed to maximize your tax refund. Rather than reading through countless pages of IRS instruction manuals that sound more like mumbo jumbo, you just answer a series of questions and let the software do its magic.
Turbo Tax is intuitive and it knows what the next question should be based on your answers. For example, in the Income section it will ask you if you have any income related to a rental property. If you answer “Yes” it will continue asking a series of questions to gather more details and complete necessary forms. If you answer “No” it will bypass those questions and skip to the next section.
By making your way through the questions in order you can be sure you don’t miss anything and you’ll get the largest tax refund possible.
Import Your Previous Year’s Return
The first time you use Turbo Tax to file your tax return you’ll need to start from scratch. But in future years you can eliminate many of the early questions and get right down to business. This is because the software imports your previous tax return and auto-fills as much of the return as possible. For example, you won’t need to enter names, SSNs, addresses, dependents, filing status, etc. (unless of course something has changed since the previous year). That is a huge time-saver and it will help you finish much faster.
Electronic, Super Fast Refund
Once you complete your tax return and realize you’re due to get a refund you’ll want to get it as quickly as possible. With electronic submission the government will get your return and process it in no time. This year, I only had to wait eight days (including weekends) before my tax refund was automatically deposited into my bank account.
Which Version is for You
Depending on how complicated your tax return, you have five different versions of Turbo Tax to choose from. Here’s a quick run down on each…
This version is only for people with the simplest of tax returns. If you are taking the standard deduction and you can file using the 1040EZ form, the free version should be good for you. But if you can deduct mortgage interest, property taxes, or a slew of other deductions, you’ll need to upgrade to a different version.
This version goes a bit further and allows you to itemize deductions and use common schedules such as A, B, SE, H and R. You can also import your Turbo Tax return from last year to save the time and effort of re-entering everything manually. Plus you can save copies of your return so you can refer to it later.
The deluxe edition comes with everything the basic edition does, plus some extra bells and whistles. The Deduction Maximizer walks you through over 350 tax deductions and credits to make sure you get the largest refund possible. The “Its Deductible” tool helps you accurately value your charitable contributions so you get the biggest deduction. And the Audit Risk Meter analyzes your return and calculates your risk of an IRS audit.
This version includes everything featured in the Deluxe version, but it also includes added guidance for investment sales including stocks, bonds, mutual funds, and employer stock plans. It helps you track your investment’s cost basis and calculate gains and losses on your investments.
The Premier edition is also perfect for landlords as it helps you uncover more than 20 deductions related to rental properties. It will also help you decide which depreciation method will get you the biggest deduction and guide you through deducting points, tracking costs, and maximizing deductions related to refinancing.
Home and Business Edition
For freelancers, independent contractors, and small business owners who need to file a Schedule C, the Home and Business edition is your best choice. It contains an entire section dedicated to self-employment and business income. The software walks you through the process and guides you on what expenses you can or can not deduct. It covers everything from start up costs to mileage deductions to the home office deduction.
Amazon Gift Card Bonus
If you use the Deluxe, Premier, or Home and Business version of Turbo Tax you can get a 10 percent bonus when you elect to receive some or all of your tax return in the form of an Amazon gift card. For example, a $1,000 tax refund transforms into an $1,100 gift card when you choose the bonus option. That’s perfect for anyone looking to use some of their tax refund for a new TV or Kindle Fire. Of course there are smarter things to do with your tax return, but if you already have a purchase in mind taking advantage of the bonus can save you some money.
I’ve been using Turbo Tax since 2009 and I love it. It has an easy to use interface and I’m a big fan of the interview styl questions it asks to determine what kind of deductions and credits you’re eligible for. The fact that I can import my previous year’s return to save time is a big plus for me.
Even if you’re not 100 percent convinced Turbo Tax is for you, you can take it for a free test drive. You don’t have to pay a dime until you’re ready to submit your return, so why not give it a shot? Click here to get started and see how big a tax refund you’ll get.