TurboTax from Intuit, Inc., makes preparing federal and state taxes less painful and time-consuming, among its other benefits.

The prices are fair -- from free to about a hundred bucks -- and between the time and stress they'll save, and the legitimate deductions they're likely to help find and calculate, you're bound to come out ahead of the game.

The 2008 version includes some new features; once I take the product out for a spin, I'll add some notes on this year's version below.

Issue"> TechRevu TurboTax Home & Business Federal + State + eFile 2008
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TurboTax Home & Business Federal + State + eFile 2008
Review by Daniel P. Dern
Intuit, Inc. CD-ROM  ISBN/ITEM#: B001GL8UP4
Date: 25 February 2009 List Price $99.95 Amazon US / Amazon UK

Links: TurboTax Home & Business / Amazon Link / Show Official Info /

TurboTax from Intuit, Inc., makes preparing federal and state taxes less painful and time-consuming, among its other benefits.

The prices are fair -- from free to about a hundred bucks -- and between the time and stress they'll save, and the legitimate deductions they're likely to help find and calculate, you're bound to come out ahead of the game.

The 2008 version includes some new features; once I take the product out for a spin, I'll add some notes on this year's version below.

Make Your Tax Prep Less Taxing

TurboTax from Intuit, Inc., makes preparing federal and state taxes less painful and time-consuming, among its other benefits.

TurboTax collects your data through "intake interviews," and fills out tax forms based on this information. It's way easier, faster and more accurate than doing it by hand and calculator (which I used to do), or even than by using government-provided field-writable PDFs (which I also used to do).

The prices are fair -- from free to about a hundred bucks -- and between the time and stress they'll save, and the legitimate deductions they're likely to help find and calculate, you're bound to come out ahead of the game.

And the Desktop versions (which you can either download or buy on CD) let you do up to five e-files at no extra charge... and prepare and (print) file an unlimited number of federal returns.

If you're cash-frugal and have an extra hour or three, the online versions appear to let you calculate for free, making you pay only when you want to print or e-file (i.e., presumably, you could download PDFs from the government, and copy-and-paste, or retype, into their forms... but losing the chance to (easily) do revisions).

I started using TurboTax Home & Business two years ago (see towards the bottom of my "Tech Faves & Knaves for 2007" in my Trying Technology blog), and while there was some learning curve and a few things I didn't care for, it was a great improvement over doing without (and also better, in my opinion, than its competition, H&R Block Tax Cut Pro).

TurboTax comes in a mix of online and CD/Download products (available for Windows and for Mac OS X 10.4+)) in a range of prices and versions.

The TurboTax Online (http://turbotax.intuit.com/) products are:

  • basic free (for "1040EZ and simple returns")
  • Deluxe ("Maximize Your Deductions"), $29.95
  • Premier ("Investments & Rental Property"), $49.95
  • Home & Business ("Personal & Business in One"), $74.95
  • Business ("Corporations, Partnerships & LLCs") $109.95.

(All these include free federal e-filing; doing a state tax costs more.) (For a features comparison, see Compare TurboTax Online Tax Software.)

TurboTax Personal Taxes products include Online and TurboTax Desktop (CD/Download) for 2008.

The CD/Download versions cost a little more than the online ones .. but, among other things, as noted above, they will prepare and file unlimited federal returns (e.g., also for other people), including five (5) federal efiles. The CD/Download products are:

  • Basic, $29.95
  • Deluxe, $59.95
  • Premier, $89.95
  • Home & Business (for Self-Employment and Personal Taxes), good for * sole proprietors, consultants, 1099 contractors, and single-member LLCs; $99.95. This one can also generate W-2 and 1099 forms, useful if you've got employees (or contractors).

All the Personal CD/download products also include one state tax prep.

There's also a TurboTax Business (good for S Corporations, C Corporations, Partnerships, and multi-member LLCs), $109.95, (Federal only; State additional).

I'm self-employed, with no contractors or employees, filing a Schedule C, so the one I'd use would be TurboTax Home & Business

Other reasons to use tax-preparation software besides reducing your time and errors include:

  • No need to hunt for and download forms.
  • It's the easy road to online filing -- this year, it's included as part of the price -- which a) avoids the line at the post office, b) avoids your return getting lost or mislaid in the mail, c) gets it to the government faster, which, if you're expecting a refund, can d) lead to getting a refund faster.
  • Simplifies state filing. Turbo Tax offers both federal and state software, so once you've got one done, you can (if you pony up the money) be done with your state taxes more easily.

I've been happy with previous years' versions. Not 100%, it took a few tries to apply some changes in places. I'd expect to be able to simply go into the actual form within the program, make a change, and have that ripple through, but it wasn't always that simple (or it was, but it wasn't obvious how to do it).

The 2008 version includes some new or improved features -- Intuit flags them, in product summary pages like this one with "New" or "Improved," but I'm not immediately seeing any summary "What's New" links.

Trying Turbo Tax Home & Business Federal + State 2008

I've installed and tried a copy of Turbo Tax Home & Business Federal + State 2008 -- the best choice for anybody who's filing a Schedule C -- here's some thoughts.

(Note: My tests were done using dummy data -- roughly reflecting my own figures as a self-employed person filing a Schedule C, working from home, with, for better or worse, no investments to complicate matters. My tests did not include the e-filing part, but I've used this feature in the past, and it worked fine then.)

Obviously, to calculate your taxes and fill out your forms, TurboTax needs your data. The program is sophisticated enough to take data Intuit's own Quicken or QuickBooks, or .txf (Tax Exchange Format) files from other programs.

TurboTax also gives you the option of putting data directly into the tax forms, or "interviewing" you for the data, and then sorting and entering your entries into the correct forms and lines. It's not an absolute either/or; you can go in directly to the forms at any point, and put an entry in (which, if I recall correctly, was a lot harder or didn't work as well in previous versions).

TurboTax is flexible enough to let you skip fields during the data entry process, and fill them in later. (I tried it as a tester, not using any real data.) It's very good about showing what you've done, what's about to happen next, and giving you access to examples, help, the forms themselves, and other resources.

If you're used to doing your taxes by hand, meaning plugging the numbers into hardcopy or to the IRS's form-fillable PDF forms, there's some things worth knowing ahead of time about how TurboTax wants its information. This applies not just to business record-keeping, but also to personal-side information like medical expenses and charitable donations.

Even if you're not planning to use TurboTax until next year, this is a good time to learn about this... and modify your record-keeping accordingly:

  • TurboTax's categorizing and detail-tracking may be more granular than what you've been doing. For example, for medical deductions, TurboTax wants you to separately summarize things like doctors/dentists, prescriptions, lab fees, and eyeglasses.

    Ditto charities -- have good records.

  • 1099's versus cash received. You should have received a Form 1099 from anybody you received more than $600 from. In principle, this makes it simple to tell TurboTax what you earned... but a) this means you have to track per-client revenues, so you can add up any that you don't get 1099's from.

    A potentially bigger nuisance -- suppose one or more clients send out checks during the end of the tax year, e.g., December 27, but they don't arrive until the following year, say, January 3. You might prefer to consider it as revenues for the new year, but then your 1099 reporting is at odds with what you're claiming. (Or suppose the check gets lost, or you're away from December 25 through mid-January?)

  • If you've done a Schedule C before, you're probably already keeping your expense records in a way that easily matches up with the Schedule C line items, e.g. ADVERTISING, CAR & TRUCK EXPENSES, INSURANCE, etc. TurboTax breaks this down a little finer in some spots; it's worth doing a test run (or looking for a dummy run-through, which I'm sure Intuit offers), so you know how to categorize and track your expenses as they come in. TurboTax uses different categories than I'd been for many years; I'm still tweaking my record-keeping categories.

Two minor criticisms/cavils:

  • TurboTax Help automatically invokes Microsoft Internet Explorer, rather than turning to whatever browser is already open, or to my computer's default browser (here, FireFox). Tsk.

  • While TurboTax does revise the final result amount due (which it displays top and center, as you go) when you make a change, it doesn't retain the previous figure, e.g. [ WAS: NOW:]. There may be times you want to keep an eye on this, to see the impact of changes and corrections.

  • No "Undo" keystroke -- You can go back and change anything, through the appropriate screen or form, but there's no keystrokes equivalent to the Control-Z in Microsoft Word.

In addition to built-in help, TurboTax lets users join, and query, its LiveCommunity. These answers aren't necessarily accurate, much less guaranteed to have any legal standing if you cite them as your basis for a decision, but they can be a good start. Intuit also offers one-click access to pay to have a professional review your return, before it's filed.

All in all, TurboTax helps minimize the time and pain of preparing and submitting tax forms, eliminates many opportunities for calculation and form-filling errors, and helps you identify legitimate deductions or other things that avoid your paying more taxes than you should. Especially since almost every version of TurboTax includes one or more free online filings, the odds are you'll save more money than you spend, not even counting the value of the time you'll save.

If you're feeling frugal, it looks like you can use many of the online versions, without having to pay until you print or file... you'd have to copy the information, and then fill it in to the forms yourself, but at least you'd have gotten the right numbers less painfully. But again, it's worth buying the product.

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