Turbo Tax Online: Online Tax Software Review

TurbTax offers several versions of their tax software online. The most basic service (for those with extremely simple filing needs) is free and does include free electronic filing.

The version we will look closely at is the version most users are likely to need, the "Deluxe" edition. This version of the tax software currently costs $29.95 for the federal return. If you need to do a state tax return as well it will be an additional cost.

Getting Started

One of the biggest advantages to preparing your tax return with TurboTax Online is that there is no tax software to install on your computer. The website is compatible with most major browsers on both the PC and the Mac (including Internet Explorer, Firefox, and Safari). You simply create an account with the site, and start filling out your information. There is no upfront fee, so you can "try before you buy".

When entering your information, the program offers a nice time saver. Using your employer's id number, it can automatically import your W2 information. This is not available for all companies, but if your company participates, it's a big help.

The Deluxe version will also handle income sources beyond your W2. If you have profits from investments, multiple employers or other incomes this version of the tax software will take this information into account. The program uses a series of checklists and questions to step you through entering all the necessary information for your tax return. Most items have links to pop-up descriptions with helpful tips and additional information. These are usually well written and provide clear and concise guidance.

Once you have entered all the information required for your tax return, TurboTax Online offers tools to help you maximize deductions. The deduction maximer includes useful calculators for determining the exact to amount to record for some of the less straight forward deduction types. Once you have found all the deductions, you can use the audit risk analyzer to look for common audit flags. The analyzer shows a graphical meter that reflects your audit risk level, and advises how you can reduce it (if applicable).

Filing your tax return electronically is as simple as reviewing your information, printing copies of your documents and sending it on it's way. TurboTax Online will keep you updated on the status of your return and let you know when it has been accepted by the IRS.

After filing your first tax return with TurboTax Online, the site will remember your information for future years. All you will need to do next year is update anything that has changed, and provide income information for that year.

Payment Gotcha:

TurboTax Online offers to deduct the cost of your filing from your refund. This sounds like a great option, but it cost nearly thirty dollars extra!

TurboTax Online does not require payment until you are ready to file the return. If you think you have a simple tax return that will not require the aid of a tax professional, this is an easy and inexpensive option. If you get half way through your return and find you will need some additional help, you might get more for money by stopping and seeking out a live person. There are versions beyond the Deluxe versions for more complex returns, but they increase in cost and given that you will still be doing most of the work yourself, going to the local tax pro might be a better value for complicated tax returns.

Resources:
http://www.turbotax.com