Pros: VERY easy to use, doesn't cost anything to try it, no installations
Cons: Have to be online, no visible forms means a bit of "blind trust"
Update for 2002:
This year, I opted to continue my relationship with TurboTax and use them as my online preparation service again. While a few things have changed - not necessarily for the better - the main program and service is as good as ever, easily allowing me to whiz through this year's return even with four W-2's to mess with. While I will leave the bulk of the review from last year intact because of little change to the main body of the service, let me update you on the changes that have taken place.
First of all, TurboTax is once again offering the free preparation and printing/filing service if your Adjusted Gross Income is less than $25,000. While the filing fees aren't tremendous (and they certainly beat paying an accountant or real-person prep service), every penny saved is another penny I can put in the "buy a new car because hubby wrecked the old one" fund.
However, this year, those who are planning to use the free service MUST go through a different start page than the standard http://www.quicken.com/taxes/ page. To access the free service, you must now use http://www.quicken.com/freedom/ as your start page each and every time you log in to your account with TurboTax. The way the site words it, it makes it sound like if you log out and fail to use the correct start page next time you come back, you will not be eligible for free filing. I do not know how strict this is, as I never tested it - I was a good girl who used the right start page each time.
Starting your return is a little more complicated this year as they have placed in a lot more "ad" screens. While these look like normal TurboTax page screens, they are really pushing the extra services this year - TurboTax premium and other financial services. I got really tired of having to click "No Thanks" about a half dozen times before I got to the actual software screens. I do understand why they've done it, it's like asking "do you want fries with that?", the service provider must try to sell his service, but it was very annoying.
Filling out my form this year was even more of a breeze than last year, since my account was held in their servers and all they had to do was pull up my old information and fill in a lot of the blanks for me. All of our personal information was in place, as well as previous employers, so that saved me a lot of typing. Deleting an old employer that was no longer applicable was easy, and adding in new employers was just as easy.
I did run into one problem with entering W-2's this year. Unless you know for sure that your employer is utilizing online W-2 uploading, don't even bother with trying to use it on TurboTax's site. If you try to dowload your W-2 and it is not available, you end up playing virtual ring-around-the-rosie on the website, trying to get back to the correct starting screen for entering a new W-2. This was poor site design - even simple sites easily redirect you back to starting screens when you are not eligible to use a particular service.
My final complaint is that twice when I tried to log in to TurboTax, the site was completely down. I don't know if it was the site itself, or if it was just overwhelmed with other people using it, but I couldn't get in for quite some time, thwarting me when I had my latest W-2 in hand, ready to enter it and see the numbers jump some more.
Other than those four complaints, TurboTax was just as enjoyable to use this year as last. Even better in some ways, for two reasons. First of all, The IRS is allowing "Self Selected PINs" this year, which totally eliminates the need to provide signed and dated printouts to the IRS, if you want to choose that option. (You can still print and file the signature papers if you prefer.) A good thing, since my printer is currently out of ink! I didn't have to mail in anything. And this year, I got my confirmation of acceptance by the IRS in only 24 hours, whereas last year's return took 48 hours to accept. TurboTax has also added an email notification service that will let you know when you have an answer about your return. The email itself does not tell you, you will have to log in to the site, but it beats logging in every few hours to check. My money should be direct deposited into my bank account in 10-16 days. Most likely only 10, as that is all that it has taken the last two years that I have e-filed.
If I could take off a half-star for the minor annoyances I had to put up with, I probably would this year. But since I can't, and since the software and the service themselves are absolutely wonderful, I won't deduct anything. Just be aware that you will have to put up with a few new things this year, but once you get past them, the old familiar look and feel is there, and you'll get through just fine.
This year's printing/filing fees are as follows:
Form 1040EZ Federal - $9.95 (after 4/1, goes to $12.95)
State EZ Form - $4.95
Form 1040 Federal - $19.95 (after 4/1, goes to $29.95)
State Long Form - $12.95
TurboTax Premium 1040 - $29.95 (after 4/1, goes to $39.95)
TurboTax Premium State Long Form - $12.95
Review from 2001:
Ahhh, the dreaded tax season is on us once again. At least, it's dreaded for most people! (I'm one of the lucky ones - I get back more than we put in because of those two cute little deductions running around named Sean and Erin.) 3 years ago, it really was dreaded for me because I had a small business to account for and I didn't know where to begin with regards to properly filing our taxes. That was the first year that I purchased Turbo Tax, at Sam's Club for about $20 as I recall.
I found it easy to use, very intuitive and chock full of help screens, so I purchased it again last year because I still had that business mess to deal with. This year, no business, so I was going to tackle it alone as I used to do. However, I'd been hearing little rumors here and there about on-line tax preparation services that will handle and file your taxes for free, so I thought I'd give it a try. Went to Google.com (a search engine) and typed in "free tax preparation" and Turbo Tax For The Web was the first name to pop up.
Okay, this looks good, I'm familiar with the basic setup of the program already, let's see what they have to offer. It turns out that you can prepare either your 1040 or your 1040EZ, right on-line in a secure site, plus many of the states are linked in to do your prep and filing from there, too! Here is basically what you will find along your tax journey:
To begin, TT will ask you a few simple questions to determine whether you will need to file a regular 1040 or a 1040EZ. If you end up having to pay at the end of your tax preparation session, the rates vary for those two forms.
Next, you will be asked to register so that your information will stay on-line, easy for you to access at any time. Remember, if you share a computer or are using a public access computer (such as at the library) you will need to log out every time so no one can access your records! Every time you log back in, you will be automatically taken back to exactly where you left off, just like with the software version; however, you may jump to any point along the way as needed.
The first step in preparing your forms will be entering all of your personal data. This will be your name, address, Social Security number, etc. You will also enter all information for your spouse, should you have one, and all dependents. If you have any questions at any time along the way, you will find basic related help questions posted on the right side of the screen; just click and you'll be taken to that topic. (I did have one question later on in the form that I couldn't find in the TT help topics; for that I had to turn to the bulletin boards on Ask.com. If you're still not sure, be sure to consult a qualified tax consultant.)
Crunching the numbers:
Of course, just as you would when sitting down with paper and pen to do your taxes, you need to have all of your W2's, receipts, interest forms, mortgage forms, etc. already compiled and with you if you want the easiest time of preparing your taxes. If you don't have it all yet, don't worry - don't forget, you can go back at any time and everything is saved for you.
You'll start out with, of course, your income. (This is why it's called income tax, folks.) TT takes you through one segment at a time, filling out a few boxes at a time so that you don't get lost or confused. Step by step, TT will get you to copy out all of the information on every W2 you have to file, as well as any 1099's or other miscellaneous income statements. Again, if you ever have any questions, you will find the help topics on the right side of the page.
After the W2's, I'm a little fuzzy about the order that everything is typed in (I shoulda taken notes, huh?), but TT will take you through every question there is to ask about your financial status for the tax year - capital gains, IRA's, investments, rental property, overseas monies, you name it, it covers it. The average person, like me, is going to get very familiar with the "No" button at this point.
Then you get to fill in all of your deduction information. At first, you may choose to itemize or take a standard deduction - if you know your itemized deductions will not be more than the standard, you can skip this portion. I wasn't sure, so I went ahead and filled it all out - it wasn't more, but it wasn't that big of a deal. TT will ask you about your medical deductions, charitable contributions, mortgage interest and all of that sort of stuff.
Of course, your children are part of the deduction section, and this is the part I just love! TT checks to make sure that your children lived with you for more than 1/2 of the year (unless they're newborns) and that nobody else is claiming them, etc. Then they question you to see if you qualify for the Earned Income Credit. All figures are handled automatically behind the scenes, so if your numbers are right for certain credits, TT knows it without you having to check. If you qualify, you will be so informed, and you'll get to see your numbers magically jump up or down in the top right corner of the screen. Just keep an eye up there as you proceed, and you'll see it say, "Refund of $____" or "You owe $____"
I have to say, I just love Turbo Tax! The whole process is so easy and simple, anyone can do it as long as they're not in too complicated of a tax situation. Since I haven't won on Who Wants To Be A Millionare lately, I don't have to worry about that. The forms are laid out in a straight-line, easy to comprehend process that guides you through, a little at a time. If you ever come across a piece of information that you had overlooked, you can just go back and plug it in and TT handles everything automatically - no need to start over or white-out half of your paper form and recalculate everything yourself!
Finishing up and filing:
Once your federal tax return is finished, TT will take you through a sort of "internal audit" checking for mistakes and red flags. If nothing shows up, your cleared for take-off, so to speak. They will also ask you if you would like to do a tax review for the next year, checking for new deductions you might be overlooking, to print out a new W4 for your employer, or several other nonessential options.
Once you get through everything you want to look at, TT offers you the option of printing, printing and filing, or heading on over to your state tax form. To fill out your state tax form, you will need your returns from last year to fill out some of the paperwork (it's a security measure) and since for some reason I couldn't lay my hands on those copies, I had to forego using TT for my state taxes. I'm sure that the state tax forms are just as simple to fill out, assuming you live in a state that utilizes the electronic filing system. One note about state taxes - you must file a federal form in order to file a state form. They will not let you do just your state form by itself.
The actual electronic filing is very simple and can be handled two ways. If you received a special electronic filing number from the IRS, and you have a copy of your last year's return, you're set for totally paperless filing! If you don't have one or the other of those, you can still file electronically, you'll just need to file one piece of paper along with the appropriate W2 forms to go with it. You still have to spend a stamp, but it sure beats all that form-filling! Of course, you will want to print a copy of your forms for your own personal records at home.
Once you've filed your form, you will get a confirmation number, and you will need to check back in 24-28 hours to make sure that your forms were accepted for electronic filing. If you chose to have your refund deposited to your bank account, you will also get an estimated time of delivery; I have always received mine on the day they estimated for me.
If you choose not to e-file, you can choose to print all your forms instead. This prints up every form that you need, with all the numbers in place. Just sign, date, and send it off as normal. You will still have to pay the fee, even if you want to print instead of e-file.
Now, here comes the best part of all - if your adjusted gross income is under $25,000, you can print or file your taxes absolutely FREE! Yep! While the normal charges range from $6.95 to $14.95, (before April 1st, more after the 1st) if your income comes in under the limit, you get to use this service totally, 100% free. It's some sort of philanthropic endeavor on their part, and I for one am sincerely appreciative of it.
Overall, I think this is just about one of the best things going in the tax department. While I did not sit down and compare the Web version with the software version, most if not all of the same pieces are there, with the exception of being able to look at a picture of the actual tax forms. (This is a feature in the software version so that you can look at the actual forms, making changes there if you need to.) I know why the actual forms aren't present in the Web version, though - if they were, people could use the service, copy down the forms onto paper to file and never pay anything to Turbo Tax!
I'm no financial expert. There may be a better way, if you pay outlandish sums of money to a personal accountant or the H&R Block guys, but for the average American taxpayer, I don't think there is a better way. And the great thing about Turbo Tax For The Web is this - if you don't like their software or forms, you can just quit, go away, and you've never wasted a penny! Now tell me where else are you going to find a deal like that!