How to Find the Right Turbotax for Your 2019 Taxes and Avoid Errors
This article is updated for taxes due April 15th, 2020.
Are you comfortable doing your own taxes? I've used TurboTax for over 18 years, both for my business and my personal taxes. I've come to know all their products, so I can guide you with what's required for your situation.
One of the most important things I've discovered when I first 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 things I could have been improving financially. It wasn't until my accountant retired, and I started using TurboTax, that I discovered important details about my financial situation.
A friend of mine told me to try TurboTax. Once I used it, I was hooked, and I never looked back.
What's New for Tax Year 2019 (due April 2020)?
Last year's tax law changes that Trump introduced continue this year with a shorter and simpler 1040 form. Intuit supports this new form with TurboTax.
Forms 1040EZ and 1040A were eliminated last year, and the new Form 1040 consolidates the three types of returns into a single and shorter 1040 form.
Itemized deductions will be included on Schedule A, as always, for taxpayers who include deductions such as home mortgage interest and property taxes.
The resulting more straightforward form allows more people to do their own taxes—even without the need for TurboTax. However, it will still be useful for those who have other tax situations requiring additional schedules.
Six new schedules were introduced last year for less common items that used to confuse taxpayers. Turbotax determines if you need these schedules and easily guides you through them.
TurboTax Doesn't Miss a Thing
I found that TurboTax guides me, asking for the required information so that I end up filing my taxes with the correct information in a way that's legally most beneficial to me.
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.
Real Estate: 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.
Inheritance: 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.
Deductions: 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.
Investing: 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.
Free eFile for Faster Refunds
All versions include free eFile so you get your refund faster. And no worry about getting lost in the mail.
Comparison of Online and Software TurboTax
TurboTax has an online version on their site that you can use without installing software on your computer. However, the software version that you can purchase via download allows you to eFile up to five returns. The online version only lets you do one return.
In addition, all the software versions let you do as many taxes as you want on your own computer, five of which can be eFiled. That gives you the ability to do the taxes for your other family members or close friends too.
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 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.
- You can increase your refund by taking all or part of it on an Amazon.com gift card (up to $1,000), and TurboTax will add 5% to 10% to the total.
- TurboTax properly handles the filing of data for the Affordable Care Act.
- Free TurboTax support via phone for U.S. customers.
TurboTax Has the Right Version for Each Situation
There are several different versions, each for a specific situation. Each version is available online as well as software that you install on your own computer.
The software version can be bought on CD or instantly downloaded from Amazon. I personally like having it installed on my own computer rather than keeping my data on Intuit’s online server. (Intuit is the maker of TurboTax).
The online versions cost less, but if you live in a state that also has 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. Only the basic version and the business version do not include the state return, but you can add it with an additional purchase if needed.
Compare TurboTax For Individuals
Below is a complete review of the various versions to help you choose the right one. You can also download right now and start working on your taxes when you buy from Amazon.
I used to buy directly from Intuit, the makers 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 it still ends up being higher than Amazon's prices.
TurboTax Purchase Options
When you buy from Amazon, you'll see the following options for each version:
- 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, software on CD is rare these days. Most new computers no longer have CD drives.
If you ever need to reinstall it, the purchase is saved in your Amazon account for free download at a later date.
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. 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.
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.
- 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
- Automobile Tax Credits (some cases)
- Child Care
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 these business versions.
Home & Business
Schedule C for Self-Employed and Small Businesses
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, if you use the online version, only “Home & Business” will create Schedule C.
If you have to create W-2 and 1099 forms, or you want help with finding small business deductions, then you need to use TurboTax Home & Business.
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 is not the same as a calendar year, then you may get to buy the Business TurboTax from Amazon at a huge reduced price since you can wait to purchase it later when you need to file.
My case is a good example:
Since I incorporated in June and my fiscal year went from June 1st to May 31st. Since my fiscal year ends in May, my deadline for filing by business tax report is September rather than April. Therefore, I always wait until August to buy TurboTax for Business.
Since it's considered obsolete by then for that year, I get the advantage of a considerable discount. If you have a company that files under a different fiscal year, you may also save on the purchase of Business TurboTax. Take advantage of that if you can.
People Also Ask
- Can I do eFiles for other family members? How many eFiles can I do?
You can do up to five eFiles when you buy the software version. However, the online version only lets you do one return.
- Can I share TurboTax with a friend or family member? How many tax returns can I file with one TurboTax purchase?
The software version is unlimited as long as you do the returns on a single computer where you installed your copy of TurboTax. However, keep in mind 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.
- Can you use TurboTax for all family members?
Yes, the same as the last question. You can eFile, as well, for up to five individual family member’s returns.
- Can you delete your information from TurboTax when you're done?
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 personally don't like the online version for that reason, 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 own computer gives me full 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.
- Can I use TurboTax to file for a deceased parent?
I have done this. 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.
- Can I use TurboTax for business with a fiscal year?
Yes. I do that. See my complete explanation in the section above: "Filing for a Non-Calendar Fiscal Year"
- Can I do my personal taxes with TurboTax Business?
"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 business with no other employees.
- Can I download a different TurboTax State for other family members?
You can purchase and download as many states as you need. The first you download is included free. However, TurboTax Basic and TurboTax Business do not include the state return for free and have to be purchased.
- Can I use TurboTax for more than one year?
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.
Main image courtesy Pixabay with TurboTax logo added under "fair use" permission.
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
I will be required to file Schedule C and Schedule SE. Which version of TurboTax will I need for 2019?
Form 1040 Schedule C and Schedule SE are for self employed people with a sole proprietorship. TurboTax Premier handles those forms. If your hire anyone in addition to yourself, then you will need to use TurboTax Home & Business.Helpful 1
Which TurboTax version covers the sale of a home?
TurboTax Premier, as well as TurboTax Home and Business, include the entry of all the details required for the sale of your home with your 1040 return.
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?
The Canadian version of the Premier Turbotax has a feature called “Auto-fill My Return”. This 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 and this is kept in your “CRA My Account.” 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 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.
What is the difference between the old and new versions of TurboTax including new tax laws under President Trump?
The new version of TurboTax since 2018 has been changed to handle the shorter 1040 form that President Trump pushed through Congress. Forms 1040EZ and 1040A have been eliminated and consolidated into the new simpler 1040 form.
Schedule A will still exist for taxpayers who chose to itemized deductions, although the higher personal deduction that Trump implemented will move more people into a lower tax bracket, therefore further reducing taxes and eliminating the need for some to itemize.
Since all versions of TurboTax can import 1099 financial institution data, and brokerage transactions are reported on 1099-B, why would I need the Premier version for my mutual fund investments?
Forms 1099 are used to report all types of financial transactions, such as dividends, interest, and miscellaneous. All versions of TurboTax can download all of these. However, if you have investments such as stocks or bonds, reported on 1099-B, then you need the Premier version to complete the appropriate forms and report the transactions.
© 2012 Glenn Stok