I’ve used TurboTax to file my taxes for the past several years. As a freelancer with a day job, my taxes are more complicated than most. But I’m still able to file them on my own with Intuit’s software. It adds some great new features every year, and it’s always available in multiple versions, each with its own price point. With the step-by-step software, it’s easy to file your taxes without missing anything.
New Features for 2016
This year hasn’t brought tons of new features to the already full-featured TurboTax software. Last year, the company rolled on an app that allows users to file on a smartphone or tablet. They also added an Affordable Care Act module to let you easily file your up-to-date health insurance information.
The major new feature for TurboTax this year is actually a completely new software option: TurboTax Self-Employed. The Self-Employed option replaces TurboTax’s Home & Business option. It’s built with 1099 contractors in mind, but may work for any sole proprietor with a relatively streamlined business. Self-Employed makes it easier to follow all the rules for business taxes, while getting the deductions you’re entitled to.
We’ll talk more about this new version of TurboTax in our breakdown of each version of the software. But for now, know that if you’re a 1099 contractor, whether full-time or part-time, this may be the best tax software around for your particular needs.
Another feature included with certain version of TurboTax is called My Analysis and Advice. It’s basically a service that will give you personalized tips for saving on your taxes next year.
As always, you can count on TurboTax to include the latest tax laws and information. It’s constantly being updated to ensure that you file your taxes properly, and get any money back that’s due to you.
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 2017:
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.
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 care 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 paid extra for the Home & Business version, which allowed for a home office deduction and other complications. The past two years, though, my freelance work has become the side gig to my W-2 day job. Because of this, I used TurboTax Deluxe last year. It saved me a bit of money, and worked perfectly for my needs.
Deluxe now offers the My Analysis and Advice option, which will analyze your tax return and give you ways to save on your 2017 taxes.
You should know that you don’t have to determine ahead of time which version of TurboTax to use. You can start out on Deluxe, for instance, but if you find that it doesn’t include deductions for which you qualify, you can bump yourself to Home & Business later. You don’t pay until you actually file your taxes, so jumping up isn’t a problem.
In fact, it’s easier to upgrade mid-filing than it is to downgrade. So if you’re waffling between Deluxe and Premier, consider starting out on Deluxe, and then jump up later if you need it.
Right now, the Deluxe option is $34.99, though the regular price is $54.99. File early to take advantage of the discount price!
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 $89.99, but is regularly $99.99.
If 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 Self-Employed version may include everything you need.
This version includes everything in the Premier version, and adds Schedule C, where you report self-employment as well as 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.
A new feature for this version is special guidance for new businesses. Brand new businesses can claim a loss for a set amount of time after starting up. The Self-Employed option will walk you through this and other considerations for your new business.
The regular price of TurboTax Home & Business is $114.99, but you can get it for $89.99 right now.
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.
This year, the interface of the Self-Employed version, which I’m using, looks a bit the same as last year’s with the tabs on top of the scree, like this:
This holds true for the individual sections, too. Here’s what the personal section looks like this year:
As I noted before, the software will walk you through every single step, or allow you to explore on your own. It’ll give you this option each time you log in to start a new session.
If you’re filing a little at a time, you might start by exploring on your own. Fill in information for the forms that you have. Then when you’re ready to complete your filing, let the software walk you through everything to ensure you aren’t missing any critical information or potential deductions.
One of the best parts about using TurboTax multiple years in a row is that it will import much of your information from prior years. For instance, I won’t have to fill out much personal information this year. I’ll just double check it and call it done.
TurboTax will also allow you to pull in information from W-2 and 1099 forms, if they match the last year’s forms. If your employer or contract clients stayed the same, TurboTax will pull in the employer name and EIN. Then it’ll walk you through filling in the information from those W-2s or 1099s.
If you work for a participating employer, TurboTax can automatically pull in actual financial information from your W-2s. Again, this is a nice time- saving step. If you can’t find the information, it’ll tell you which box to look at on each tax form page. Then, the software will guide you through questions to fill out each part of your taxes.
Sometimes, TurboTax preempts issues in the language of the questions. To be thorough, they have to be sure to ask everything, even some questions that seem silly or irrelevant, like this one:
I like that they clarify the issue at stake as part of the question, since it does seem silly to ask if my four-year-old is self-supporting.
Now, we’ll look at a few of the interesting additions for this year, including healthcare.
Items of Note
Since every American is supposed to have been insured in 2016, you’ll need to fill out information about your healthcare using this part of the form. This year’s health insurance form looks the same as last year’s:
If you answer that one or more family members was insured for only part of the year, it’ll ask which months you were insured. You just click the boxes to mark the months you were insured:
Then, the interface will tell you whether or not you will owe a penalty for not being insured.
Curious about what kind of deductions you might be looking at this year? Check out the free TurboTax TaxCaster. This is different from last year’s deduction estimator, which appeared at the beginning of the deductions screen. The TaxCaster is a really detailed estimate that includes information about potential deductions to give you an idea of what you might get back or owe. At the end of the sequence, the TaxCaster will tell you which TurboTax edition will likely work best for you.
If you decide to walk through deductions on your own, you’ll see a screen like this. In fact, any time you choose to walk through the steps on your own, you’ll come to a similar screen that will let you pick and choose which topics you want to deal with.
Once you’re done with your taxes, you can run an audit check. It’ll basically tell you the likelihood that you’ll be audited, based on red flags in your filing.
What happens if you are audited?
You can get some free help from TurboTax support, including information on notices, letters to write, and what to do next. The Audit Support Center includes lots of information for a DIY approach to handling an IRS audit.
This year, TurboTax is offering an add-on service called MAX. This optional service, which costs an extra $59.99, includes several features:
- Audit Defense: This gives you a dedicated team to handle an audit if this should happen to you. Your return for 2016 is covered for as long as it can possibly be audited.
- Tax Identity Restoration: If someone files with your SSN to get a refund before you have a chance to file, an Identity Restoration Specialist will help you get your identity restored and your refund back to your bank account.
- Identity Theft Monitoring: Tax season is prime time for identity theft. If TurboTax finds suspicious activity related to your identity online, you’ll be notified. And you’ll get a dedicated specialist to help you take the steps to protect your identity.
- Priority Care: You’ll get bumped to the top of the line when you call to ask any tax-related questions.
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!