Thursday, January 21, 2016

TurboTax 2015 Review

This year, the Intuit software adds some great new features. As always, it’s available in multiple versions at several price points, and it’s a functional, step-by-step software just about anyone can use.

New Features for 2015

TurboTax has long been one of the best-known tax-filing software companies on the internet. Since it already does a great job, it doesn’t change much from year to year. However, Intuit has introduced a few useful new features recently, including:
  • An App: As more and more Americans move from traditional desktop and laptop computers to mobile, online software companies follow suit. TurboTax is now available on a mobile app that allows you to file your taxes on your phone.
  • Affordable Care Act: TurboTax always seems to be up-to-date on the latest tax laws, and that’s no different with the Affordable Care Act and the related tax issues. You’ll find all your health insurance forms built right into this year’s software.
  • Benefit Assist: TurboTax will automatically assess whether or not you qualify for additional government benefits, such as Medicaid, Food Stamps, discounted utilities, and healthcare discounts.
Along with these recent features, I always find that TurboTax includes all the latest information I need to know for filing my taxes. And if I have questions, they have a great help center with up-to-date information on the deductions, schedules, and other issues I need to know about.

The Levels

As with most tax services, TurboTax comes with several different levels of service, depending on your needs. Some taxes are more complex to file than others, so you’ll pay more for these services. Not sure what you need? Here are the basic levels TurboTax is offering in 2016:

Absolute Zero

Your taxes have to be pretty simple to qualify for this level with TurboTax, but it’s an excellent deal. You can file both your federal and state income taxes for free as long as you meet the following qualifications:
  • Made less than $100,000 in 2015
  • Don’t own a home or rental property
  • Didn’t sell any investments
  • Don’t own a business or have 1099 income
  • Don’t have any major medical expenses
Of course, this is very basic. However, if you meet these qualifications, this product will cover everything you need.

Deluxe

This is the most common option for TurboTax customers. If you don’t meet the qualifications for the Absolute Zero deal, chances are likely you’ll fall into this category.
Besides basic forms, this option includes Schedule A which allows you to file for various deductions and credits – including the mortgage and property tax deductions. If you qualify for the Earned Income Credit, child and dependent card credits, and other common deductions and credits, this is likely the best option for your needs.
If you’re a freelancer or 1099 contractor, you may be able to get by with the Deluxe option. It allows for filing 1099-MISC forms and simple expenses, including standard vehicle mileage, cell phone expenses, and miscellaneous expenses under $100. Deluxe does not, however, cover deductions for a home office, meals, entertainment, legal and professional fees, or many other common business deductions.
In the past, I’ve had to use the Home & Business version of TurboTax because I’ve taken a home office and other business deductions. It costs a bit more, but I needed the help. However, this year my freelance work has moved from center-stage to side gig, so I’ll take very few deductions – allowing me to use TurboTax Deluxe, instead.
One thing to note: You can always start out with a cheaper version of TurboTax and  bump yourself up later if you need to. If the version you start using doesn’t have all the features you need, you can upgrade to the next version. Since you don’t pay until you actually hit “file,” this isn’t an issue.
Right now, the Deluxe option is $34.99, though the regular price is $54.99. File early to take advantage of the discount price!

Premier

If you’ve followed Dough Roller’s advice and invested heavily this year, TurboTax Premier may be the software you need. This option covers everything included in Deluxe, but it also covers Schedules D and E.
Schedule D is used for stocks, bonds, ESPPs, and other investment income. This schedule in TurboTax automatically imports investment income, including cost basis, which makes your tax filing life much simpler.
Schedule E is used to record income and expenses related to rental properties. If you’re a landlord, this is the option you want.
Premier is currently priced at $54.99, but is regularly $79.99.

Home & Business

TurboTax ReviewIf you run a larger business or have employees, you’re out of luck with TurboTax and most other tax filing software. You’ll need a real accountant to make sure your taxes are filed properly. But for a small business owner or sole proprietor, the Home & Business version may include everything you need.
This version includes everything in the Premier version, and adds Schedule C, where you report self-employment and small business income and expenses. This schedule will work even if you have relatively large expenses or are dealing with asset depreciation. The asset depreciation function is especially nice, as I found when using this version of TurboTax the last few years to depreciate some of the tech I use for freelancing.
The regular price of TurboTax Home & Business is $104.99, but you can get it for $79.99 right now.

Additional Benefits

Each level of TurboTax gives you access to additional tax forms, custom prompts, and fill-in-the-blanks to assist you in filing those forms. But all versions also come with additional benefits, including:
  • W-2 Auto Fill: If you work for a relatively large employer, chances are that TurboTax can find your W-2 information for you automatically. This doesn’t work with every employer, but it is handy for some.
  • E-File: E-filing keeps you out of the super-long post office line in early April, and may get you a refund faster, too. Typically, you can e-file both your federal and state taxes, though filing state taxes may cost more.
  • 24/7 Access: TurboTax gives you access to your tax forms all the time online. This is handy if you want to fill them out a bit at a time, rather than in one sitting. It also makes it easy to print off additional copies of your tax returns if you’re buying a home or filling out other major paperwork in the coming years.
Additional benefits for the paid levels of TurboTax include:
  • ExplainWhy: These pop-ups within the TurboTax software show you “why” certain things are the way they are when you file your taxes.
  • My Analysis and Advice: This service will analyze your tax history for the year and will explain how you can take steps to maximize your tax refund in the coming year.
  • Tax Experts: With the paid levels of TurboTax’s software, you can talk to a tax expert through chat at any time. This can be helpful if you have a more interesting question that isn’t answered in the robust community forums on the TurboTax site.

A Walk Through

One thing I’ve always liked about using TurboTax is its interface. It’s clean and easy to use, plus it walks you through each part the process step-by-step. For me, TurboTax has always provided the right level of support without being too in-my-face with tips, tricks, and tutorials.
For instance, if you sit down to do your taxes all at once, you can walk through each step of the process in the order TurboTax gives it to you. It’s intuitive and makes sense. For me, though, I often take steps out of order – filing various W-2s and 1099s as they come in. It’s easy to skip around to the steps you want to work on, and TurboTax won’t let you file without at least checking on each step.

The Bottom Line

The bottom line here is that TurboTax has managed to come up with a great, user-friendly tax-filing software yet again. With the various levels of service available, it can work for nearly anyone.
Not sure which level you need? Start with the most basic option and work your way up as needed. Since you don’t pay until you actually file, you can always upgrade. Downgrading is often more difficult, though, so it’s best to start with a more affordable option than you think you need. That way, you don’t wind up accidentally paying for services you don’t really need.
As always, be sure you follow each step in the process and have TurboTax double check for holes you forgot to fill out. And if you have questions, ask. Get help from the support available through TurboTax, or take your taxes to a professional who will file them in person if things get really complicated. It’s better to pay a bit more to file your taxes on the front end than it is to risk a gross overpayment or an audit!