Which Version of TurboTax Do I Need?

Updated on April 16, 2018
Tall Clovers profile image

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.

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 make less than $33,000 a year, or make in this neighborhood and have children, by all means use the online "TurboTax Freedom Edition" (not TurboTax Free Edition), because it has many powerful features for free.
  • If you are self-employed and make less than $33,000 a year, absolutely use TurboTax Freedom Edition. You can't afford $75-120 for the Home & Business Version.
  • If you are self-employed, do not use any online version of TurboTax cheaper than Home & Business.
  • If you are self-employed and make more than $33,000, you don't have to use the Home & Business Version; you can use the Deluxe Version (CD/download only, not online). 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."
  • In general, if you make more than $33,000 a year and want to use a cheaper version than Intuit recommends for your tax lifestyle, stay away from the online versions; use the CD/download versions. You can print out the forms you need and file them on paper, though this waives a guarantee and prevents e-filing.
  • If you make more than $33,000, but you don't have income from businesses, rentals, or complex investments and you don’t itemize deductions, you can use TurboTax Free Edition online (not Freedom Edition), but expect to be encouraged constantly to pay for additional services, including anything related to your state return(s).

Incredibly User-Friendly, If You Follow Their Recommendations and Pay for Convenience

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 you can't be sure you need the extra features you pay for in the higher-level versions. Even self-employed people, and others with more than basic tax needs, may be able to get away with a cheaper version than what Intuit recommends. People who make less than $33,000 or thereabouts can use the non-publicized online "TurboTax Freedom Edition" even if they are self-employed or use extra schedules. Many with higher income but simple taxes can use the totally different online "TurboTax Free Edition," though it isn't as friendly as paid versions, because it begs you to upgrade to higher versions, and charges you for downloading your past information, for advice, and for preparing state returns. In fact, all versions but Freedom Edition charge you for e-filing state returns.

The trouble is, it is difficult to say for sure, before you start your return, what version you will need, and difficult to say whether you need to obey the prompts to upgrade that you get when doing the online versions. This difficulty, some say, benefits Intuit but makes your decision more difficult.

Which TurboTax Version Meets Your Needs?

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

Four Tiers of Features: 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.
  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.

See the chart below for the way TurboTax adds features to increasingly expensive versions.

Chart comparing features of four boxed CD/download versions of TurboTax
Chart comparing features of four boxed CD/download versions of TurboTax | Source

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.

  • Basic on CD is replaced online by the Freedom Edition and the Free Edition, both free, although they have some differences.
  • As with the CD, Deluxe includes added features relating to deductions.
  • As with the CD, Premier includes features in Deluxe plus features relating to 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).
  • An added tier, "TurboTax Live," includes real-time handholding 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 having to input it and avoids errors. But TurboTax Free Version will NOT import this data unless you pay an additional $30 for the PLUS package.

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 childrens' 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.

TurboTax Products Available as Download or CD in 2017

Version
Intuit recommends it for:
Features
Price (from Intuit)
Price (on Amazon 4/2018)
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
30
Filling out and filing a state return costs extra (19.99 per state to e-file, which goes up to 24.99 in March) A charge to download a state return.
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)
79.99
35
Free download of one state return (if box includes it), but e-filing state returns costs extra except in NY, and extra states cost extra.
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.
109.99
65
As above
Home & Business
Self-employed people and small business owners
Premier, with help completing Schedule C for business owners.
119.99
75
As above
Sources: Intuit website on CD and Downloadable Products, Amazon

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

TurboTax Programs Available Online in 2017

Version Name
Price
Intuit Recommends it for:
Limitations
State Returns
Support
TurboTax Freedom Edition
free
Intuit does not publicize it.
Income must be less than $33,000 (66,000 for military users) or user must be eligible for the Earned Income Credit
“All state returns are completely free.”
 
TurboTax Free Edition
free
Employed people, renters, people with dependents
Forms 1040A, EZ only; does not support 1040. No automatic access to past filing info unless you pay extra for the PLUS package.
Pay extra for state return(s)
Pay extra for access to a “TurboTax specialist."
Deluxe Edition
59.99
Homeowners and people who want charitable or medical deductions. Imports investment info.
Does NOT support Schedules C, D, SE, even in Forms Mode
Pay extra for state return(s)
Free access to a “TurboTax specialist."
Premier
79.99
People with rental property and investments
 
Pay extra for state return(s)
Free access to a Turbo Tax Specialist
Self-Employed
119.99
People who are self-employed or own a business
 
Pay extra for state return(s)
Free access to a Turbo Tax Specialist
TurboTax Live
179.99
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

Two Free Versions? How Can That Be?

As Samantha Sharp explains in Forbes, there are two free versions of TurboTax: Freedom Edition, which is part of the Federal Free File program, and Free Edition which is not. Intuit does not advertise or publicize the Freedom Edition; they leave that up to the IRS. Which is a shame, because it has a lot of features to offer to low-income users that are truly free, unlike the Free Edition which charges for them. It offers free state filing, and many forms that aren't available in Free Edition.

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 this 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.

Questions & Answers

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      • profile image

        Sam 2 months ago

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

      • profile image

        LAH 12 months ago

        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

      • profile image

        DoktorThomas 13 months ago

        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

      • profile image

        f brustman 14 months ago

        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.

      • profile image

        John 15 months ago

        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?

      • profile image

        JRS 15 months ago

        Which version provides forms for NOL carryforward

      • Tall Clovers profile image
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        Tall Clovers 2 years ago from Southern California

        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

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        Mike 2 years ago

        Anybody else feel like TurboTax is paying for this article?

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