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Which Version of TurboTax Do I Need?

Tall Clovers is a former legal and finance professional and small business owner.

Consider your lifestyle when deciding which version of TurboTax software suits your needs best; also consider how much you want to pay for convenience.

Consider your lifestyle when deciding which version of TurboTax software suits your needs best; also consider how much you want to pay for convenience.

Which TurboTax Is Right for Me?

Intuit's TurboTax tax preparation programs are incredibly user-friendly, and most regard them as money well spent. They walk the user through an interview process that asks you questions and, depending on how you answer, guides you to the next section. You simply fill in the appropriate answers.

TurboTax then double-checks the information you have entered, and voila, your tax return is complete. It's not a stressful experience. I tried the competition, H&R Block's Tax Cut, once and found it far less user-friendly.

I have used the Basic, Deluxe, Premier, and Home & Business versions over the years, based on what was going on in my life, and have been equally satisfied with each version.

But sometimes, the biggest challenge is figuring out which TurboTax version you need. The last thing you want to have happen (aside from an audit) is to purchase a version without all the features you actually need to successfully and easily file your tax return.

If that happens, you can upgrade along the way, but that can be more costly. As such, it's better to figure out which TurboTax version fits your needs best at the start and purchase that version from the beginning. Having said that, there is a chance you can actually file with TurboTax for free!

If you have very basic tax needs and are able to file a simple tax return, you may actually be able to file utilizing the TurboTax Free Edition. Yes, free!! This is different from the IRS Free File Program. Both TurboTax and H&R Block have elected not to renew their participation in the IRS Free File Program after participating for 20 years.

As such, TurboTax has created its own Free Edition. If your return is simple, by all means, use this program. However, your return must be filed by 2/15. It appears that TurboTax may be retiring this program altogether after this date.

As mentioned previously, it can be difficult to figure out which version of TurboTax you need before you begin your return. So let's review what features are included in each version so you get the most value for your money and your "best tax preparing experience," or at least your "least painful" one.

Which TurboTax Version Meets Your Needs?

So let's talk figure out which version of TurboTax best fits your needs.

First, we will review the versions available for purchase in boxes as a CD or download, and then about the slightly different versions available for online use only.

Compare TurboTax Versions: Basic, Deluxe, Premier, and Home & Business

Each version of TurboTax adds a tier of features to the next cheapest version, based on your tax preparation needs. There are four basic tiers. As I said, I have used all four of these, at different stages of my life, and found them all well worth it. I found them much easier to use than H. R. Block's TaxCut software, for example.

TurboTax CD/Download Versions

I am speaking here of the four CD/Download versions that both TurboTax and Amazon sell, which let you install Turbotax on your computer using a CD or download. Either version will update itself online after installing.

  1. The Basic Edition fit my needs when my income was from W-2s and interest on savings (back when banks paid interest) and my deductions were few and straightforward. Poof! Taxes done! Available on Amazon for about $30. This is the cheapest version of TurboTax that you can get on a CD, but TurboTax also has two free online versions (see below).
  2. We used the Deluxe Edition later when our kids were older and we had more different kinds of deductions. It has all the features of Basic, plus Deduction Maximizer, a feature that searches for over 350 different deductions and credits, and ItsDeductible, which will help you accurately value charitable donated items. It includes many tax forms, but not Schedule D. Note: TurboTax Deluxe can be purchased with one state download included. This does not, however, include the cost to e-file the state return.
  3. Turbotax recommends the Premier Edition, which has all the features of Deluxe plus more tools to deal with investments and rental property, to people who have stocks and bonds or rental income. It calculates losses and gains on stocks, bonds, mutual funds and employee stock plans, and calculates rental property income, expenses, and refinancing issues. The program can upload information directly from many brokers, quickly and accurately, which is incredibly convenient.
  4. Intuit recommends TurboTax Home & Business for the self-employed. It guides users through completion of Schedule C and maximizes deductions for your home office, vehicle, and other business costs. It includes a simple way to enter income and expenses. It creates W-2 and 1099 forms for your employees and contractors. And it walks you through start-up costs new businesses can deduct.

The chart below illustrates how the features increase on each TurboTax version.

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Read More From Toughnickel

More detailed chart comparing features of five boxed CD/download versions for the 2021 TurboTax versions

More detailed chart comparing features of five boxed CD/download versions for the 2021 TurboTax versions

Tips for Choosing a Version of TurboTax

Here's a summary of my advice, based on information in TurboTax's forums and FAQs and Amazon product forums.

  • If you want easy, effortless filing and don't mind paying for it, follow Intuit's advice about which version to choose.
  • If you have very minimal tax filing needs and can file a simple tax return, you can file for free with the TurboTax Free File. Just remember, in order to take advantage of this program, you must complete your return and file on or before 2/15/22.
  • If you have deductions, such as those associated with owning a home or costs associated with your job, TurboTax Deluxe (either with or without state filing) will fit your needs.
  • If you have rental property and/or deductions related to stocks and investments, you should use either TurboTax Premier or Home & Business.
  • If you are self-employed, are a contractor, or have a home business, you should not use anything less than TurboTax Home & Business. It maximizes your home deductions.
  • If you are self-employed, you don't have to use the Home & Business Version; you can use the TurboTax Deluxe Version (PC/Mac Disc or Download). It includes Schedules C and SE, which you can fill out in Forms Mode and mail. Using Home & Business is a "recommendation" of Intuit's, not a "requirement." However, it might be easier to start out with TurboTax Home & Business and avoid any potential upgrade requirements you might encounter.
  • In general, if you want to use a cheaper version than Intuit recommends for your tax lifestyle, stay away from the online versions and instead use the CD/download versions. This way, you can print out the forms you need and file them on paper, though this waives a guarantee and prevents e-filing.

2021 TurboTax Products Available as Download or CD

Sources: Intuit website on CD and Downloadable Products, Amazon

VersionIntuit recommends it for:FeaturesSuggested Retail PricePrice (on Amazon March 2022)State returns

Basic

Employment income, a few deductions

Child tax credits, earned income credit. Does not include form 1040, only 1040A and 1040 EZ

49.99

29.99

Filling out and e-filing state return is an extra fee.

Deluxe

Homeowners and people who want to deduct charitable or medical expenses

Everything Basic does, plus more than 350 deductions and credits and a tool to check the value of charitable donations. Does not include Schedule D (investments)

49.99 (Federal Only), 59.99 (Federal and State)

29.99 (Federal Only), or 39.99 (Federal and State)

Free download of one state return (if box includes it), but e-filing state returns is an extra fee.

Premier

People who sold investments or have rental income

Everything Deluxe does, plus tools to calculate losses or gains from stocks, bonds, mutual funds, and employee stock plans.

89.99

69.99

As above

Home & Business

Self-employed people and small business owners

Premier, with help completing Schedule C for business owners.

99.99

79.99

As above

TurboTax Versions for Online Use

You can use TurboTax without buying a CD or download by using an online version. All the software and all your information is stored on Intuit's server, though you are encouraged to save a pdf of your return. The same four tiers exist though they have some different names.

  • As with the CD, Basic is for simple tax filings and includes e-filing.
  • As with the CD, Deluxe includes added features relating to deductions.
  • As with the CD, Premier includes features in Deluxe plus features relating to rental properties and investments.
  • As with the CD, Self-Employed includes features in Deluxe plus support for self-employment income (schedules C and SE are not available in cheaper online versions).
  • As with the CD, Home & Business has added features related to self-employment and home deductions.
  • An added tier, "TurboTax Live," includes real-time handholding and review from a certified expert.

Extra Conveniences Available, Often for a Fee

Some, perhaps all, versions of TurboTax can import your data from the prior year's TurboTax, Quicken, Quickbooks, or other tax preparation software. Importing this data saves you from having to input it and avoids errors.

Some, perhaps all, versions of TurboTax also allow you to import your W-2 and 1099 data from over 100,000 companies.

The Premier version automatically imports your investment information from participating companies.

Although the software is super simple to use, if you need to speak with a tax professional, each version of TurboTax allows you to call one, in some cases for a fee.

The CD/Download versions allow you to fill out five returns as long as the software stays on the same computer, so you could do your children's or relatives' returns as part of your purchase. Each CD/Download version above the Basic level will allow you to create a state return for free, but you will have to pay extra to e-file a state return or to do returns for additional states.

With all TurboTax versions, if the IRS notifies you of an audit, TurboTax then lets you talk to a tax professional of some kind for free; this is the Audit Support Guarantee. Also—though you can only get this protection by paying extra at the time that you file—you can purchase Audit Defense, where a tax professional will represent you if you are audited.

There is an Accurate Calculation Guarantee, but it is voided if you enter information on forms on your own without the guidance of TurboTax's interface.

Summary of Features of CD/Download and Online Versions of TurboTax

See the two tables below. This information comes from forums on Intuit's and Amazon's websites.

In addition, there is a "TurboTax Business Version" available as a CD and download. It is for corporate, partnership and LLC tax filings, not individual taxes.

TurboTax Programs Available Online in 2021

Version NamePrice (on Amazon as of March 2022)Intuit Recommends it for:LimitationsState ReturnsSupport

TurboTax Free Edition

free

Intuit does not publicize it.

Only for very simple returns.

“All state returns are completely free.”

TurboTax Basic

29.99

Basic Tax Return, includes e-filing

Basic tax filing, simple returns

Pay extra for state return(s)

Deluxe Edition

$39.90 (state additional), $49.99 (Federal and State)

Homeowners and people who want charitable or medical deductions. Imports investment info.

Does NOT support Schedules C, D, even in Forms Mode

Pay extra for state return(s) unless included

Free access to a “TurboTax specialist."

Premier

$69.99 (Federal and State)

People with rental property and investments

Pay extra for state return(s) unless included

Free access to a Turbo Tax Specialist

Home & Business

$79.99 (Federal and State)

People who are self-employed or own a business

Pay extra for state return(s) unless included

Free access to a Turbo Tax Specialist

TurboTax Live

Varies

People whose "live[s] have changed" or who want expert assistance

Pay extra for state return(s)

Free access to assistance from a CPA/EA and a TurboTax Specialist

Are You Paying More Than You Need to for Peace of Mind?

The dark side, if there is one, of these multiple offerings from TurboTax is that you never know if you are paying more than you need to for these helpful services. The object of doing tax returns, is, of course, to save money, not just to reduce anxiety. You end up paying a lot of money if you purchase peace of mind in every way that TurboTax recommends you do.

Amazon user "JWINK" says, about last year's Deluxe edition:

I still have some of the same gripes that I have had for a long time with TT or rather Intuit’s business practices. I think they intentionally create confusion with their multiple versions and efforts to get you to upgrade to a more expensive version, which in a lot of cases is not needed.

Very often, when you use TurboTax software, you are prompted to spend more money for something you may or may not need, or didn't think you'd have to pay for: upgrades to the next most expensive version, e-filing a state return, retrieving past information, or buying packages for help or advice. Instead of navigating the wilderness of federal tax regulations, sometimes you feel you are navigating the wilderness of Intuit's assessment of its customers' willingness to pay.

It's very hard to tell beforehand exactly what the package you are buying allows you to do, even if you read through Intuit's FAQS and its responses to customer critiques on product pages on Amazon.

Even though many say the downloaded/CD (not the online) version of the Deluxe version of TurboTax can handle investments and self-employment forms, Intuit says that if you switch into Forms Mode rather than walkthrough mode to fill out those forms, you negate your accuracy guarantee and (perhaps more important) take away the convenience and speed of e-filing.

A Critique of the TurboTax System

As TurboTax is improved, and more and more data about your investments and employment and education and history is effortlessly captured in its interface, you begin to wonder: what would it be like if this process was not only automated but free and available to everyone?

In some European countries, the government gathers this data on its own and "populates" tax forms with it. You just sign off on it, and that's how you file. The reason we don't have such a process here, according to Dylan Mathews of Vox, is that Intuit and H&R Block lobby hard against any move to simplify the federal tax process.

Mathews argues that if you give them money, you are ultimately making tax time harder for everyone, even though you are buying yourself a more pleasurable tax time experience. It's up to you.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

Questions & Answers

Question: Which edition of TurboTax helps with the sale of a home?

Answer: Depending on whether you have sold your own personal home or a rental, the sale might be treated differently. I found this video that might help answer your question. https://turbotax.intuit.com/tax-tips/home-ownershi...

Question: How many different returns can I prepare with Turbotax?

Answer: In accordance with IRS regulations, you can use the TurboTax software to e-file up to five (5) federal tax returns. You can prepare as many returns as you want, but only five can be e-filed. For returns with multiple states, you can e-file up to three (3) states per federal return; the rest must be paper-filed (which probably isn't a big deal, as many nonresident state returns can't be e-filed anyway). https://ttlc.intuit.com/questions/1901306-how-many...

Question: Is there a difference between the 2018 versions of TurboTax Home and Business and TurboTax Self Employed?

Answer: The TurboTax Self Employed version is only available as an online download, and includes free access to a TurboTax specialist.

© 2011 T Clovers

Comments

Dill on June 30, 2019:

Thanks for the information I could not get from turbo tax

Sam on February 12, 2018:

Please clarify, that the 5other returns you did for free were federal not state because there is an extra fee for state...

LAH on April 10, 2017:

TurboTax does not clearly disclose the total cost of filing a fed and state return, e-filing etc. Not fair at all. The gov't should provide the software as a service to the citizens. Instead they let TurboTax and their lobbyists rip off consumers. Shameful. #discloseyourfeesTurbotax

DoktorThomas on March 11, 2017:

Generally a nice review, but not anymore in depth than Intuit's inadequate description of its products.

Intuit is consumer unconscious and really sells a pig in a poke.

Having expressed my general dissatisfaction with the merely adequate nature of their products (I have begrudgingly used them for 15 years); unfortunately, there are no other reasonable alternatives despite what BlockHead might opine.

My issue with your view is the same as with Intuit's. Millions of people have S corporations, yet no one ever addresses which person tax software they should use. The 1120s business choice is clear. The personal one for S corporation owners remains a mystery every year.

I'd like to see them average the price and sell a one-size-fits-all, choose-as-you go product for personal taxes. But that would be too simple for even Intuit, which I am not. ©2017

f brustman on February 08, 2017:

I agree with Mike. It reads like one of their ads. Will TT Deluxe for 2017 handle federal 1040 sched. E? Last year's version did.

John on January 19, 2017:

Thanks for the article! I do have one question for you:

I have self-employed income (around $12,000) and also have job where I will receive a W2. Which version of TT do I need?

JRS on January 09, 2017:

Which version provides forms for NOL carryforward

T Clovers (author) from Southern California on January 22, 2016:

Hi Mike- I am the writer of this HubPage, a mother of 4, grandmother of 3 (with one more on the way), and currently babysitting as I write this response. Clearly, you could tell I am a big fan of TurboTax. However, I am in no way associated or affiliated with TurboTax. However, I did mention to my husband, just today, that we need to buy the Home and Business version this year because we started a Vintage Party Rental Business this past year. Seriously, its the easiest way to do your taxes...

Thank you for reading my HubPage! Happy Tax Return Season,

Tallclovers

Mike on January 22, 2016:

Anybody else feel like TurboTax is paying for this article?

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