Best Tax Software Values for 2020
Value Ranking: 3 of 9
Pros: Superior navigation and help features; imports most W-2s and 1099s
Cons: Free edition is extremely limited, and upgrades are expensive
TurboTax excels in providing smooth navigation and loads of support. Explanations are clear and TurboTax goes the extra mile in pointing out tax breaks you might overlook. TurboTax will import data from more than 150 million W-2s and will also import information from hundreds of financial institutions, which saves time and reduces the potential for error.
For an additional charge (an extra $50 for Deluxe; $70 for Premier), users can have a certified public accountant review their return and point out any deductions they may have missed. But unless you have a complex return or are a really nervous filer, this seems unnecessary, since the program does such a good job of highlighting tax breaks and alerting you to possible errors. TurboTax provides clear and understandable answers to questions, as well as videos and live help from a large community of users.
All of these bells and whistles come at a cost, though. TurboTax offers a free version to taxpayers who have W-2 income and claim the standard deduction, but even someone with a seemingly straightforward return can quickly become ineligible. For example, our fictional single filer was required to upgrade to Deluxe in order to deduct interest on a student loan.
If our single taxpayer had self-employment income, even if it’s just a side gig, he would probably need to upgrade to TurboTax Self-Employed ($90 federal/$40 state). However, if he had self-employment income but no deductible expenses, he could use TurboTax Deluxe.
It’s worth noting that our single filer would be eligible to prepare and e-file his federal tax return for free through IRS Free File, which is available to any taxpayer with 2019 income of $69,000 or less. Even better, he could use the TurboTax Free File offering, which is available to anyone with adjusted gross income of $39,000 or less, even if they have more complex returns (private tax prep companies that participate in Free File are permitted to create their own criteria).
Meanwhile, our hypothetical married couple would need to use TurboTax Premier because they had investment income in 2019. On the plus side, though, the program did a nice job of explaining why they’re better off itemizing, and also provided easy-to-understand explanations of credits for child care costs and deductions for contributions to their IRAs.
SEE ALSO: Best States for Low Taxes: All 50 States Ranked