TurboTax comes in many different versions. It can be confusing to figure out which version of TurboTax to purchase. And then there is the decision as to whether to purchase the desktop version or the online version. Even with all these options, the right choice depends on the complexity of the user’s income tax return.
TurboTax Desktop vs. TurboTax Online
Desktop versions of TurboTax are supported in Windows XP, Windows Vista, Windows 7, Mac OS X 10.4 Tiger, Mac OS X 10.5 Leopard, Max OS X 10.6 Snow Leopard. Those without these operating systems can use the online version instead.
Intuit, the software company that makes TurboTax, allows customers to complete their tax returns online for free and pay for the software when their tax returns need to be printed or filed electronically. This means the online version allows users to try TurboTax for free with no obligation to purchase. Those who want the desktop version have to pay for the software upfront.
Desktop versions include five free federal e-files. All desktop versions other than TurboTax Basic include one free state version. The online version comes with the federal edition and one federal e-file. Both desktop and online users need to pay for state e-file. Those who use TurboTax online can add the state version for $34.95 ($27.95 for the free edition).
TurboTax Free Edition
TurboTax Free Edition is intended for very simple tax returns. It is available exclusively online. There are no income limits. Keep in mind that this version does not import data. All data must be typed in manually. Those who need to file a state tax return need to pay $27.95 for the state version.
This version is almost identical to the free edition with the following two exceptions:
- It is available on Windows and Mac, as well as online.
- Can import from W-2 forms, 1099 forms, previous TurboTax returns.
- Can import from financial software such as Quicken, QuickBooks, and Microsoft Money.
The cost of TurboTax Basic is $14.95 online while the desktop version costs $24.95.
Taxpayers who choose to itemize deductions instead of using the standard deduction need to upgrade to at least this version. TurboTax Deluxe also includes ItsDeductible, a tool for tracking charitable deductions as well as Deduction Maximizer, a tool for maximizing itemized deductions.
The online version of TurboTax Deluxe costs $29.95 while the desktop version costs $59.95.
TurboTax Premier is needed by taxpayers with investment income or rental income. This version handles stocks, bonds, options, mutual funds, 401k accounts, IRA accounts, and employee stock plans. The cost of TurboTax Premier is $49.95 for the online version while the desktop version costs $89.95.
TurboTax Home and Business
Those with self-employment income should look into buying this version. TurboTax Home and Business has extended Schedule C handling abilities to make it easy to input business expenses and claim deductions such as business travel and the home office deduction. TurboTax Home and Business online costs $74.95 while the desktop version costs $99.95.
All versions of TurboTax can be purchased from Intuit’s website as well as many other retailers such as Amazon.com, Walmart, and Costco. Keep in mind that Intuit intends to increase the price of the online version around the end of March.