I have in-depth experience filing my corporate and personal taxes with TurboTax for over 20 years. So I'll show you what version you need.
What Happens When You Use TurboTax?
I've used TurboTax for over 20 years for my business and personal taxes. As a result, I've come to know all their products. So I can guide you with what's required for your situation.
One of the most remarkable things I discovered when I started using TurboTax is that I became much more aware of my finances and where my money was going.
For many years I had an accountant do my taxes, and I was left in the dark about my finances I could have been improving them if I had been more involved.
After my accountant retired and I started using TurboTax, I discovered crucial details about my finances that my accountant never brought to my attention. As a result, I became savvier with my financial management.
What You'll Get From This Review
We'll begin with a review of all the advantages of using TurboTax. That will help you compare it to having your accountant file for you.
Then, I’ll compare three TurboTax versions for individuals and two versions for small businesses, so you can quickly determine which one you need.
What's New for Tax Year 2022 (Due in April 2023)?
The Inflation Reduction Act of 2022 affects your taxes in many ways. For example:
- The new rules create tax implications when using peer-to-peer payment apps such as PayPal and Venmo to make mobile money transfers. You need to report all business income received in these apps.
- Beginning in 2022, if you receive over $600 in an online payment app, the platform will send Form 1099-K to you and the IRS.
- The “Clean Vehicle Credit” has been affected. Under the new law, if you purchased an electric vehicle after August 17, 2022, you can only claim the tax deduction if it was assembled in North America.
- The new law extends the credit for EV charging stations you put in your home for another ten years until January 1, 2033.
- In addition, you may take a credit of up to 30% for energy-saving items like windows, doors, skylights, and solar panels.
There are many details involved with all these changes, and TurboTax will always be up to date to accurately file your taxes.
TurboTax Doesn't Miss a Thing
I found that TurboTax guides me, asking for the required information so that I file my taxes with the correct information in the legally most beneficial way.
Good accounting software keeps track of everything and carries the necessary data forward from one year to the next. TurboTax does this, so you don't need to keep track of your prior year's information. And while you're preparing your taxes, it will remind you if you forgot anything.
Correct Forms and Schedules
The IRS eliminated Forms 1040EZ and 1040A, and Form 1040 now consolidates the three types of returns into a single form.
You never have to think about which IRS forms to use. For example, if you are over 65, it would use form 1040-SR, the proper return for Seniors.
IRS Schedules are just as easy. Itemized deductions will be included on Schedule A for taxpayers who have deductions such as home mortgage interest and property taxes.
Six new schedules were introduced recently for less common items. TurboTax determines if you need these schedules and easily guides you through them.
It will ask you if you have a home, so it knows to take deductions on your real estate property tax and mortgage interest. It gets easier as time goes on because it will remember to ask for your property data each year.
It will ask if someone died, so it files inheritance income properly. It knows when this is tax-free and will give you the most advantage.
It even gives you the proper deductions for the sales tax you spent throughout the year. There’s a quick, easy way to calculate this even if you didn’t keep records. TurboTax helps with that.
If you invest in the stock market, it keeps track of your capital gains and losses. And it carries it all forward year to year, so you never miss anything.
Health Care Compliance
Ever since the 2014 tax year, all the forms for the Affordable Care Act have been included to help you properly file your Obamacare entitlements.
The IRS requires you to report Bitcoin or other cryptocurrency transactions. The first question on Form 1040 asks if you acquired a financial interest in any virtual currency. You do have to report all these transactions, and the firms that allow you to trade cryptocurrency need to report your activity to the IRS.
Many banks, and even PayPal, offer the ability to use cryptocurrency for purchases or trade it in your account. I would caution you to be careful since reporting a lot of small transactions could become a nightmare.
Imagine if we need to report gains and losses based on every transaction. We have no idea how the IRS intends to handle this in the future. If you do any cryptocurrency transactions, it would be a good idea to record all your activity.
Free eFile for Faster Refunds
All software versions include free eFile, so you get your refund faster. And no worries about getting lost in the mail. You can eFile up to five returns. That gives you the ability to do the taxes for your other family members or close friends too.
Online TurboTax vs. Software Versions
TurboTax has an online version on its site that you can use without installing software on your computer. However, all the software versions for a Mac or Windows PC allow you to eFile up to five returns. The online versions only let you do one return.
In addition, all the software versions let you do as many taxes as you want on your computer, five of which can be eFiled.
All the versions create all the IRS forms for you, and they print on your computer's printer so you can save a copy for yourself. You can also save it as a PDF file on your hard drive.
Other Benefits of TurboTax
Besides correctly filling out your tax forms, TurboTax provides many additional benefits, such as these:
- It keeps track of all your finances from one year to the next.
- It guides you with self-employed and business-related travel expenses, as well as home office deductions.
- All your information is carried forward from year to year. That improves the accuracy of each year's filing. It even reminds you about things that occurred in prior years that you might have forgotten to include. My accountant never told me when I left something out.
- The Premier (and higher) TurboTax version includes a free "Ask the Tax Expert" service.
- TurboTax correctly handles the filing of data for the Affordable Care Act.
- Free TurboTax support is available via phone for U.S. customers.
- You can get live full-service tax reporting and have a tax expert review your return for an additional fee.
Find Out What Deductions You Can Claim on Your Taxes
TurboTax will help you discover all the things you can claim as deductions on your taxes. Then, based on your overall tax reporting, it will suggest other claims you may have missed. It will also guide you through all the existing possibilities that help reduce your taxes even further.
By the way, if you have a lot of deductions for a self-employed business and not much income, then TurboTax will warn you that your chance of an audit is high. Furthermore, it will give you the option of improving your situation by not taking all the deductions that could trigger an audit.
The following table shows some deductions that can reduce taxes. These are all covered with precise guidance according to IRS regulations as TurboTax walks you through your return.
TurboTax helps maximize your deductions and credits. You won't miss any opportunity to reduce your taxes that are available to you.
- Personal exemptions
- Real estate property taxes
- Alimony (some cases)
- Student loan interest
- Education-related expenses
- Self-employment expenses
- Social Security (FICA) taxes
- Medical claims
- Medicare premiums
- Health insurance
- Charitable deductions
- Energy efficiency purchases
- Renewable energy credits
- Railroad retirement benefits
- Automobile tax credits (some cases)
- Children or other dependents
- Child care
TurboTax Has the Right Version for Each Situation
There are several different versions, each for a specific situation. In addition, each version is available in two ways:
- You can use TurboTax online on their website.
- Or you can install the software on your computer.
The software version can be bought on CD or instantly downloaded from Amazon. I prefer installing it on my computer rather than keeping my data on Intuit’s online server. (Intuit is the maker of TurboTax).
The online versions sometimes cost less, but if you live in a state with local taxes, then you have to pay more to prepare the state tax return. That ends up costing more than the software version.
Most of the software versions include the state return for your home state. The basic and business versions are the only two that do not include the state return, but you can add it with an additional purchase if needed.
TurboTax Purchase Options
In the remaining sections below, I compare all the available software versions. You can buy from Amazon for safe and secure instant download. But you can also find TurboTax at local business supply stores if you have a CD drive on your computer.
I prefer Amazon because they have better prices on TurboTax, and if you ever need to reinstall it, the software is saved in your account for free download at a later date.
After you click any of the product links below, you'll see options to select the method of delivery:
- Immediate download for a PC.
- Immediate download for a Mac.
- Disc mailed to you that works on a PC or a Mac.
I prefer to download it since there is no need to wait for delivery. Besides, most newer computers no longer have CD drives.
Compare TurboTax for Individuals
Below is a complete review of the various versions to help you choose the right one. You can also safely download it right now and start working on your taxes when you buy from Amazon.
I used to buy directly from Intuit, the maker of TurboTax, but I discovered that Amazon has the lowest prices. I compare every year, and I always end up ordering from Amazon.
I even get offers from my bank every year to buy TurboTax at a discount, but that is a discount off the retail price, and Amazon ends up having the lowest prices anyway.
The Basic version is for individuals with only a salary and interest income from savings. If you have any investments, then you need one of the other versions I discuss below.
TurboTax Basic does not include state preparation. If you live in a state with an income tax, you should buy TurboTax Deluxe with state preparation. See below.
TurboTax Basic can be downloaded for either PC or Mac computers. Select your preference when purchasing.
The Deluxe version does both Federal and State. It helps find deductions for you so you can legally reduce your taxes.
This version is all you need if you don't have investments such as stocks or bonds. However, if you do have investments, you'll need the Premier version that I discuss below.
TurboTax Deluxe can be downloaded for either PC or Mac computers. Select your preference when purchasing.
The Premier is the same as the Deluxe but also handles investments and rental property. This is the one I use every year since I trade stocks.
I also like the fact that TurboTax Premier can log into my brokerage account and capture all the Form 1099 data, including stock purchases and sales. It saves the time I would otherwise be spending typing in all my trades.
TurboTax Premier can be downloaded for either PC or Mac computers. Select your preference when purchasing.
Compare TurboTax for Business
If you have your own business and are self-employed as a sole proprietor or you are incorporated, then you need one of the business versions I discuss below.
If you have to create W-2 and 1099 forms or want help finding business deductions, then you need to use TurboTax Home & Business for a small business or Business Federal for corporations and LLCs.
TurboTax Home & Business
The "Home & Business" version is what you need if you are self-employed. This version also does taxes for single-owner LLCs and includes State Tax preparation.
However, if you have an LLC with more than one person or a Corporation, then you need "Business Federal," shown below.
TurboTax Home & Business can be downloaded for either PC or Mac computers. Select your preference when purchasing.
TurboTax Business Federal
This is different than the Home & Business version. The Business Federal TurboTax is for Corporations and LLCs with more than one person.
State tax preparation is not included but can be added for an additional fee. You will be given the option to download your state software when you run TurboTax Business Federal.
I was incorporated until I retired, so I used this one for my corporate taxes.
TurboTax Business can be downloaded for either PC or Mac computers. Select your preference when purchasing.
Schedule C for Self-Employed and Small Businesses
If you are self-employed with a sole proprietorship, you must include Schedule C and Schedule SE with your 1040 form. "TurboTax Premier" handles those forms. However, if you hire anyone besides yourself, you will need to use the "Home & Business version."
You can file Schedule C for business income and expenses with all the CD and Downloaded TurboTax products (Basic, Deluxe, Premier, and Home & Business). However, only "Home & Business" will create Schedule C if you use the online version.
Filing for a Non-Calendar Fiscal Year
This section only applies to you if you have a corporation and you file for a fiscal year that is not January through December.
If your fiscal year differs from a calendar year, you might find the Business TurboTax at a significantly reduced price on Amazon since you can wait to purchase it later when you need to file.
My case is a good example:
I incorporated in June, and my fiscal year went from June 1st to May 31st. Since my fiscal year ended in May, my deadline for filing my business tax report was September rather than April. Therefore, I always waited until August to buy TurboTax for Business.
Since it was considered obsolete by then for that year, I had the advantage of a considerable discount from Amazon. If you have a company that files under a different fiscal year, you may also save on purchasing Business TurboTax later in the year. Take advantage of that if you can.
People Also Ask
Question: Can I do eFiles for other family members? How many eFiles can I do?
Answer: You can do up to five eFiles when you buy the software version. However, the online version only lets you do one return.
Question: Can I share TurboTax with a friend or family member? How many tax returns can I file with one purchase?
Answer: The software version is unlimited as long as you do the returns on a single computer where you installed your copy of TurboTax. However, remember that you can only eFile up to five returns. Beyond that, you need to print the forms for your family members or friends to mail in.
Question: Can I use TurboTax for all family members?
Answer: Yes, the same as the last question. You can eFile, as well, for up to five individual family members' returns.
Question: Can I delete my information from TurboTax when I'm done?
Answer: Yes, but you really wouldn't want to because TurboTax makes it easier to do your taxes each of the following years by carrying forward all pertinent information.
I don't like the online version since your data is saved on their servers. I am sure your information is safe, but I feel more comfortable having it on my own computer. Therefore, I always use the downloaded software version rather than the online version on their site.
Using it on my computer gives me complete control for safekeeping since none of my data resides on their server. Just remember to back up your files if you do the same thing. You can also password-protect the data file.
Question: Can I use TurboTax to file for a deceased parent?
Answer: Yes, I had done this for my aunt's estate. It works very well. If you are the executor, TurboTax will guide you with properly filing the final return for a deceased parent or other relatives.
Question: Can I use TurboTax for business with a fiscal year?
Answer: Yes. I do that. See my complete explanation in the section above: "Filing for a Non-Calendar Fiscal Year."
Question: Can I do my personal taxes with TurboTax Business?
Answer: "TurboTax Business Federal" is for Corporations and not for personal 1040. However, "TurboTax Home & Business" is the one you'll want to use if you own a small business with no other employees.
Question: Can I download it for a different "state" for other family members?
Answer: You can purchase and download as many states as you need. The first one you download is included for free. However, TurboTax Basic and TurboTax Business do not include the state return, so it has to be purchased.
Question: Can I use TurboTax for more than one year?
Answer: No. Tax laws change every year, and TurboTax continually keeps up with the changes. That's why you need to purchase a new one every year. Your personal information and tax data are automatically carried forward, so doing your taxes becomes easier with each additional year.
Question: Will TurboTax suggest if it’s better to itemize or take the standard deduction?
Answer: Yes, it will walk you through the details and help you decide which way to go. All versions will automatically figure out the result with the standard deduction and with itemizing. Then it will recommend the best method. You can still override that and choose the other strategy, but why would you?
Question: I have not used TurboTax before. Do I need the earlier versions to produce the reference files for prior years?
Answer: You don’t need earlier versions. You can start anytime simply by beginning with the current year. However, the first time you use TurboTax, it will ask you many questions about your finances and history that you should try to answer.
For example, if you had been putting money into an IRA, it would be helpful to know the details of your individual donations. Also, if you own a home, it may ask you when you bought it.
It will be much easier when you continue using TurboTax in future years because it will carry forward all that data.
Question: Which TurboTax version covers the sale of a home?
Answer: TurboTax Premier and “Home & Business” include the entry of all the details required for the sale of your home.
Question: I had a loss due to flooding. Does TurboTax help with the appropriate forms to file for a casualty loss?
Answer: You need to use IRS Form 4684 to report a casualty deduction for property losses. You can do that with “TurboTax Premier” or higher.
Question: I need to use Premier this year due to additional tax situations, but I was using the Basic version before. Do I need to reenter all my history?
Answer: If you were using TurboTax Basic and you upgrade to Premier this year, it will read its data file saved from last year so you won’t have to start from scratch.
Question: Which version of TurboTax do I need for income from railroad retirement?
Answer: Railroad workers contribute to the retirement program administered by the Railroad Retirement Board (RRB) instead of contributing to Social Security.
Railroad retirement benefits paid are reported on forms RRB-1099 (Payments by the RRB) and RRB-1099-R (Annuities and Pensions by the RRB).
All versions handle both of these forms. See here for details.
Question: I sold stock; what version do I need?
Answer: The Premier version of TurboTax handles stock trades. It can even download the information of your stock sales from your broker if you choose to let it have access to your account. You may need to enable that option with your broker account and then disable it again after the download for safety.
Of course, you can always enter the data yourself. TurboTax makes that easy too. It asks you for everything it needs for proper reporting: Date of purchase, date of sale, cost of the investment, and the amount received on the sale. It then figures if it’s a long-term or short-term investment to calculate the correct tax due.
Question: Can I import 1099 tax form data from participating financial institutions with any version?
Answer: Yes, all versions of TurboTax can import 1099 data from your financial institution. Note, however, that investments such as stocks or bonds are reported on 1099-B. You need TurboTax Premier or higher to complete the forms related to investments.
Contact your bank or broker to find out if they participate in the download feature. You may need to enable it before TurboTax can access your account since it might be blocked by default, so hackers can't download your personal financial information. However, after you download the data to TurboTax, you should disable the feature again, with your bank or broker, for your protection.
Question: I have a K-1 from an S corporation. Which version do I need?
Answer: You need the Premier version to walk you through the entry of the many fields on a K-1. I've done it, and the Premier version made it easy. I just entered the data values for each field as TurboTax walked me through it.
You need to tell it to go to the schedule to file the K-1. You do that by searching for K-1 in Premier's search box, then selecting the "Jump to" link it gives you in the search results. That will take you to the section where it guides you with entering the data from your K1.
Question: Can I ask a tax expert questions if I purchase TurboTax?
Answer: That service is available at an additional fee, with an option to include that at the end of entering your data. Then you can have a CPA review your return for accuracy.
Question: I have a 401K pension plan and a cash balance plan. Where do I input the cash balance plan in TurboTax?
Answer: A Cash Balance Plan is another type of pension plan, and it used to be under “less common business deductions" in TurboTax in prior years. But now, you need to get to the proper location by manually searching for the correct term. You need either “Home and Business" or the “Business Federal” for this.
It's different in that an employee can expect a predetermined benefit, unlike a standard 401(k), which is dependent on the fund’s performance. That makes a cash balance plan a “Defined Benefit Plan.” So that’s where you need to enter the data.
To get to the location manually, select the "Income & Expenses" tab and check the option for more tax breaks. Then scroll down to the “Other Business Situations” section and click the link given there. That will put you in the proper place. Click “Start/Revisit” next to “Self-Employed Retirement Plans” and answer all the questions to enter your data.
Question: Does the Canadian Version of TurboTax Premier log into my brokerage account and capture all my stock purchases and sales for CRA Schedule 3 just as the US version does for Form 1099 data?
Answer: The Canadian version of the Premier Turbotax has a feature called “Auto-fill My Return.” It does not download stock transactions from your broker, but it downloads this information from your CRA Account portal.
Your stockbroker sends all the T5008 slips, with trading information, to the CRA. That information is kept in your "CRA My Account," and TurboTax can import all that data from there.
Besides importing automatically, TurboTax provides interview questions to help you complete CRA Schedule 3 (Capital Gains or Losses) and Schedule 4 (Statement of Investment Income).
Values from buying and selling securities are reported on the T5008 slip (Statement of Securities). You can manually enter these stock transactions if you don’t import them from your CRA account. You can enter the data from the T5008 slips or fill in the Schedule 3 form directly by going to the forms entry option on TurboTax.
Back in the days when I used an accountant, I had to remind her about the information she missed. It wasn't her fault since I didn't know everything I needed to give her. However, TurboTax is better at suggesting what I might have missed because it asks for the required information.
Since I began using TurboTax over 20 years ago, I found that I had more control over my finances.
In addition, it carries all the data forward to the following year, such as stock losses that can be deducted in future years. That makes it easy to do my taxes year after year.
I also like how TurboTax suggests ways to save money, such as what can be added to my IRA, etc.
All these features help improve my financial situation, and I'm sure it will be a game-changer for you too.
The main image above is courtesy Pixabay with TurboTax logo added by author. Logo and package images displayed under "fair use" for this transformative review.
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.
© 2012 Glenn Stok
Glenn Stok (author) from Long Island, NY on March 28, 2020:
Julie – Schedule A is for Itemized Deductions. TurboTax will ask you questions and complete that form for you. It will also determine if Itemized Deductions work better for you than the standard detection.
Although the Basic version helps complete Schedule A, the Deluxe version of TurboTax will help you maximize tax deductions, and it will walk you through all the steps to complete your 1040, including deductions.
However, if you already went through all that and forgot to include those deductions you mentioned, you can go back to the deduction entry to add the extra data. To do that, select the tax deductions section.
It will ask you if you want it to walk you through all deductions, or if you want to select specific deductions and enter them on your own. Select whichever method with which you feel more comfortable.
The walk-through method will cover all deductions you already had entered, but the data will show up, and you can easily skip over each entry, leaving the previously entered data as is.
Julie on March 28, 2020:
Hi Glenn, where can I find Schedule A in the basic version? I need to enter a CPR training course that I was advised would be tax deductible.
Glenn Stok (author) from Long Island, NY on February 12, 2014:
Mimi - You do get five efiles for each TurboTax you buy. Every year I install both the Premier and the Business version myself. They don't interfere with one another. I would think the same is so for the two versions you use. So you can keep them both installed and do what you need to do with each. Just make sure you don't ever open the wrong tax file in the wrong version. That may mess things up.
Mimi on February 12, 2014:
I had bougth 2 versions of Turbo Tax, Deluxe and Home and Business, do I have to uninstall one and install the other one to get 10 free federal e-files?
Michelle Dee from Charlotte, NC on May 31, 2012:
I have been using Turbo Tax since 2005. Prior to that I had an accountant who was charging me $125 every year, and an extra $5 for each question I had. I dumped the accountant for TurboTax and never looked back. Very informative article, voted up, useful, awesome.
savanahl on February 26, 2012:
Great information. I just purchased Turbo Tax and am using it now. I have to say I absolutely love it. It's so simple.