Table of Contents
- What’s New for 2022
- Why Use TurboTax to Prepare Your Taxes?
- Three Ways to Do Your Taxes with TurboTax
- TurboTax Online Editions:
- TurboTax Military Discount
- TurboTax Free Edition – Best for Simple Tax Returns
- TurboTax Deluxe – Best for Maximizing Deductions
- TurboTax Premier – Best for Investors & Landlords
- TurboTax Self-Employed – Best for Small Business Owners & Freelancers
- TurboTax® Live – Best for Those Who Need a Helping Hand
- Should You Use TurboTax to Prepare Your Income Taxes this Year?
TurboTax is the most popular tax preparation software on the market. I use this software myself and recommend it highly. The service is easy to use, even if you’ve never used tax preparation software in the past.
They ask questions – in plain English – and all you need to do is gather your tax documents and input the required information. Sometimes you don’t even need to do that. TurboTax can often import information from online sources, making tax preparation even easier.
What’s more, TurboTax offers a solution for everyone, for those who prefer to DIY your taxes, TurboTax Live, which offers unlimited assistance with your tax return, and a new Full Service option.
What’s New for 2022
TurboTax offers a variety of DIY software solutions that cover almost any tax situation. In addition, you can go for a more complete solution, with TurboTax Full Service, a new option available this year.
With TurboTax Full Service, you can upload digital copies of all of your tax documents, receipts, and other forms and a tax professional will handle all the details of your return. This is more expensive than the DIY tax software version, but very competitively priced compared to hiring a local tax professional or a similar service from a big box tax preparation company.
Why Use TurboTax to Prepare Your Taxes?
No tax knowledge is required. TurboTax is an extremely user-friendly program. It will ask you all of the necessary questions, and all you need to do is input the information. You don’t have to know anything about preparing taxes whatsoever. TurboTax has a large volume of tax preparation resources, including live-support on the premium versions.
100% Accuracy Guarantee. TurboTax runs thousands of error checks and then double-checks your tax return before you file. If you receive an IRS or state penalty or interest charge because of a TurboTax calculation error, TurboTax will pay the cost.
Audit Support Guarantee. This guarantee applies to every TurboTax return. It entitles you to free one-on-one audit guidance from a trained tax professional. They’ll help you learn what to expect, and how to prepare for the audit. If need be, you’ll even have access to their Audit Defense program, which will provide you with full-service audit representation.
QuickBooks interface. TurboTax and QuickBooks are both products of Intuit, so you can import information directly from QuickBooks into TurboTax. This will enable you to prepare for income tax filing all year long if you are a QuickBooks user. It will simplify documentation collection, and make tax preparation much easier for the self-employed.
Search for over 350 tax deductions. The federal income tax code is incredibly complicated. There are hundreds of tax deductions, and even seasoned tax professionals struggle with knowing them all. But TurboTax will help you to find any you’re entitled to.
Electronic Filing will help you get your refund faster. Filing your tax return electronically is faster, safer, and more accurate than filing your tax return on a paper form. And since the IRS computers can process electronic returns more quickly, you should receive your tax refund faster (if you are owed money by the IRS).
There’s also the TurboTax Military Discount:
Three Ways to Do Your Taxes with TurboTax
Do it Yourself Software
TurboTax’s claim to fame is the easy-to-use software that makes it easy for just about anyone to quickly and accurately file their tax return. There are several options to choose from, starting with the Free Edition, followed by Deluxe, Premier, and Self-Employed. Each subsequent version adds new features, offering a more complete tax solution for more advanced tax returns. More details are covered below.
TurboTax Live – Get Unlimited Assistance with Your tax Return
TurboTax® Live is a program that offers live assistance by a CPA or an enrolled agent (EA). With this version, you prepare your tax return the same way you would with the other TurboTax versions. But you’ll have a tax specialist available and live to help you with any complications.
Once your tax return is done, it will be reviewed by a CPA or EA, who will make any necessary changes prior to filing. That will ensure that your tax return is done right, and includes every deduction you’re entitled to.
TurboTax Full Service
As mentioned above in the “New for 2022” section, TurboTax Full Service is the solution for those who prefer to hand off their taxes to a trusted tax professional. It’s the equivalent of dropping off a shoebox full of forms and receipts and receiving a finished tax return in a reasonable timeframe at a reasonable price.
TurboTax Online Editions:
| Plan | Free | Deluxe | Premier | Self-Employed |
|---|---|---|---|---|
| Best For | W-2 Income, Earned Income Tax Credit (EIC), Child Tax Credits | Mortgage and Property Tax Deductions, Donations, HSA Contributions, Child Care Expenses | Investment Income, Real Estate Investors, Cryptocurrencies | Self-employed, Independent Contractors, Freelancers, Small Business Owners, and Gig Workers |
| Federal Cost | $0 | |||
| State Cost | $0 | per state |
per state |
per state |
| TurboTax Live (Federal) | $79 $0 | $119 | $169 | $199 |
| TurboTax Live (State) | $0 | per state |
per state |
per state |
| START NOW |
START NOW |
START NOW |
START NOW |
TurboTax Military Discount
The TurboTax military discount allows all enlisted active duty military members and reservists to file their 2021 federal and state taxes FREE with the TurboTax Military discount.
This offer is only available to enlisted members and is not available for commissioned officers, warrant officers, veterans, and retirees. This applies only to the Free Edition, Deluxe, Premier, and Self-Employed versions of TurboTax. Not valid for TurboTax Live, Full Service, or TurboTax CD/Download products.
TurboTax Free Edition – Best for Simple Tax Returns
$0 for federal, $0 for state, $0 to file. It’s the TurboTax free version, and it’s available only if you file 1040EZ or 1040A, which are the very simplest tax returns.
You will qualify for the TurboTax Free Edition if you have W-2 income, Earned Income Tax Credit (EIC) and child tax credits. If your situation is more complicated, you may need to purchase one of the other TurboTax versions.
The TurboTax Free Edition works like other TurboTax versions with basic tax preparation. It uses the same question and information input format. But you also have access to the following features:
- Snap. Tap. Done. This feature enables you to take a photo of your W-2s with your mobile device for automatic input. You may also be able to directly import your W-2 information if your employer is one of the more than 1 million companies that make their W-2s available online.
- If you used TurboTax last year, all of your information will automatically be transferred into the current year, simplifying tax preparation.
- Answers 24/7. TurboTax has a large database of tax-related information that you can access. You can also get online answers from TurboTax specialists or other customers.
CompleteCheck. TurboTax will run a comprehensive review of your return before you file to make sure that nothing gets missed.
In order to be eligible for TurboTax Free Edition, you must earn less than $100,000 from W-2 sources. It’s not for people who have business income or 1099 income. You’re also ineligible if you have any capital gains income, or need to file Schedule A for itemized deductions.
The free version does support common IRS schedules and forms, including Schedule B (interest and dividend income) and Schedule EIC (earned income credit).
TurboTax Deluxe – Best for Maximizing Deductions
The Deluxe package is the most popular TurboTax version. It’s for more complicated returns, including those with itemized deductions and incomes exceeding $100,000. However, it does not accommodate investments in rental property or self-employment.
It includes all of the features of the free version, plus the following:
- Start for free, and pay when you file.
- Deduction Finder. Search for more than 350 tax deductions and credits to maximize your refund.
- If you used TurboTax last year, all of your information will automatically be transferred into the current year, simplifying tax preparation.
- One-on-one help. A TurboTax specialist will provide customized answers to your questions and guide you by drawing on your screen.
- Your TurboTax fee can be paid out of your federal tax refund. A Refund Processing fee of $39.99 applies to this feature.
- Learn more at the TurboTax website.
TurboTax Premier – Best for Investors & Landlords
TurboTax Premier includes all of the features of the Free and Deluxe versions. It is specifically for those who have investments in rental property.
Features specific to the Premier version include:
- Covers stocks, bonds, employee stock plans, and other investment income.
- Automatically imports investment income – including cost basis – from thousands of participating financial institutions. If you’re an active trader, you’ll appreciate TurboTax Premier for this reason alone!
- Enables you to complete Schedule E to report income from rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc.
- Deducts expenses related to a mortgage refinance, including mortgage points and appraisal fees.
- Learn more at the TurboTax website.
TurboTax Self-Employed – Best for Small Business Owners & Freelancers
TurboTax Self-Employed has all of the features and benefits of the Free, Deluxe and Premier plans. It’s specifically for taxpayers who earn income from self-employment. That includes independent contractors, freelancers, and business owners.
Features specific to the Self-Employed version include:
- Providing guidance on industry-specific deductions for your particular business.
- Easy recording of expenses and mileage tracking through QuickBooks Self-Employed. The app also allows you to track business mileage from your mobile phone.*
- Help to determine your home office deduction and standard mileage versus actual expenses for your automobile usage.
- Identification of tax-deductible business startup expenses.
- Set-up depreciation on business asset purchases.
- Prepare and print unlimited W-2 and 1099 tax forms for your business employees and contractors.
- Learn more at the TurboTax website.
*QuickBooks Self-Employed also enables you to snap pictures of your business receipts using your mobile phone. You can store those receipts, and keep a permanent record of your business expenses as they occur.
TurboTax® Live – Best for Those Who Need a Helping Hand
Here’s your chance to fire your CPA!
TurboTax Live is like hiring a CPA to prepare your income taxes, but at just a fraction of the price. It offers all of the features of the other four TurboTax versions. But it also provides you with advice from a CPA or an enrolled agent (EA), both on-demand and for a final review. This makes it easy to ask questions about more complicated topics, such as the Alternative Minimum Tax.
You can quickly and easily connect to a tax expert, simply by clicking “Expert Help” in the program. You can get help with personal and work income, as well as complex tax situations.
On the final review of your return, TurboTax tax experts will make any necessary changes, and back your return with their 100% Accuracy Guarantee.
If your tax return is complicated, or if you feel that you lack sufficient understanding, TurboTax Live is the version for you. You’re performing the actual information input, but it’s like having a CPA working at your side as you do.
This version is also ideal for those who have complicated business tax situations, multiple rental real estate properties, or K-1 income from several partnerships or S corporations. A CPA will charge $1,000 or more to prepare some of these returns. But with TurboTax Live, you can get a similar level of service for under $200.
Should You Use TurboTax to Prepare Your Income Taxes this Year?
You can prepare your income taxes on TurboTax in less time than it takes to get your tax information together for a CPA. TurboTax will cost hundreds of dollars less than a CPA, and generate a similar result. This is a perfect platform for a tax novice. There’s absolutely nothing scary about this program, even if you’ve never prepared a return online before.
If you want a tax return that’s 100% accurate, and provides you with all of the deductions you’re entitled to, TurboTax is an excellent choice. If you’d like more information, or you’d like to sign up for the service, visit the TurboTax website.
The post TurboTax Review 2022 (2021 Tax Year) – Is TurboTax the Best DIY Tax Software? appeared first on Cash Money Life | Personal Finance, Investing, & Career.
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