Five TurboTax Versions: How to Choose for Tax Year 2017 and Avoid Errors
This article is updated for taxes due April 17th, 2018.
Are you comfortable doing your own taxes? I've used TurboTax for over 15 years, both for my business and my personal taxes. I've come to know all their products, so I can guide you with what you need. I discuss detailed comparisons below.
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 the 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.
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. And it’s done in a way that is 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 and you don't even need to keep track of past years information. And while you're preparing your taxes, it will remind you if you forget 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. And it will remember to ask for this each year, so it gets easier as time goes on.
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 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. It even 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.
Up to five returns can be eFiled for the cost of your TurboTax. That's another reason to buy the software version and not use the online version. You may end up doing the taxes for your other family member too.
One other thing about comparing the online preparation to using the installed software...
The online version only lets you do one return for the cost of using it. But the software versions let you do as many taxes as you want on your own computer. And if you like to file online too, remember that you can do up to five eFiles. So you can help other members of your family or close friends.
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. But you can also save it as a PDF file on your hard drive.
Other Benefits of TurboTax
Besides just properly filling out your tax forms, TurboTax provides many additional benefits, such as these:
- TurboTax is an accounting software package that keeps track of all your finances from one year to the next.
- 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.
- All your information is carried forward year to year. This 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 reminded me when I left something out.
- TurboTax properly handles the filing of data for the Affordable Care Act.
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 taxes, then you have to pay more to prepare the State tax return. And it ends up costing more than the software version.
All software versions except the basic version and the business version include the State return for your home State. The state return can be added onto the latter with an additional purchase.
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 doing your own taxes when you buy from Amazon.
I used to buy directly from Intuit, the makers of TurboTax, but I discovered that Amazon has 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.
The Basic version is for individuals who just have a salary and interest income from savings. If you have any investments, then you need one of the others that I discuss below.
TurboTax Basic does not include State preparation, so if you live in a State that has income tax you need to buy the State addition. Another option is to use TurboTax Deluxe instead.
TurboTax Basic can be downloaded or purchased on a CD for both PC and Mac computers. Select your preference when purchasing.
When you go to Amazon, you'll see the option to select Turbotax for immediate download for either a PC or a Mac. If you prefer getting it on a CD, you can select the option to have that mailed to you. I personally prefer to download it, no need to wait for delivery.
If you ever need to reinstall it, the purchase is saved in your Amazon account for free download at a later date.
The Deluxe version does both Federal and State. It helps find deductions for you so you can legally reduce your taxes.
This is all you need if you don't have investments such as stocks or bonds. If you do have investments then you need the Premier version that I discuss below.
TurboTax Deluxe can be downloaded or purchased on a CD for both PC and Mac computers. Select your preference when purchasing.
The Premier is the same as the Deluxe, but in addition it 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 may trades.
TurboTax Premier can be downloaded or purchased on a CD for both PC and Mac computers. Select your preference when purchasing.
Find Out What 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, Turbotax 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
The Home & Business version is what you need if you are self-employed. This version also does taxes for single-owner LLC’s and it includes State Tax preparation.
However, if you have an LLC with more than one person, or if you have a Corporation, then you need TurboTax Business Federal shown below.
TurboTax Home & Business can be downloaded or purchased on a CD for both PC and Mac computers. Select your preference when purchasing.
This is different than the Home & Business. The Business Turbotax is for Corporations and LLC's 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 had used this one for my corporate taxes.
TurboTax Business can be downloaded or purchased on a CD for both PC and Mac computers. Select your preference when purchasing.
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 (CD or Download).
Filing for a Non-Calendar Fiscal Year
You may even save on the purchase of Business TurboTax.
This section only applies to you if you have a corporation and you file for a Fiscal Year that is not January thru 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. Amazon has it at a huge discount by then, since they consider it obsolete for that year.
Take advantage of that if you can.
Common Questions About Tax Preparation with TurboTax
- 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 CD software version or download it from Amazon. However, the online version only lets you do one return.
- Can I share TurboTax with a friend or family members? How many tax returns can I file with one TurboTax purchase?
The software version on CD and the download 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, same as 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 data 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 relative.
- 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. The State return needs to be added with an additional fee for Corporate businesses. The "Home & Business Federal" can be used for personal 1040 forms, and it even includes your State return as well.
- Can I download a different TurboTax State for different 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 does not include the State return for free and has to be purchased.
- Can you use TurboTax for more than one year?
No. Tax laws change every year and TurboTax constantly keeps up with the changes. That's why you need to purchase a new one every year. Your personal information and tax data is 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.
Questions & Answers
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 version of TurboTax Premier 2017?
The new version of all TurboTax for 2018 will be changed to handle the shorter 1040 form that President Trump pushed through Congress. Full details won’t be known until the actual release of the new version of TurboTax. However, it is known that forms 1040EZ and 1040A will be eliminated and consolidated into the new form that will be close to being a postcard-sized 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.
Other implications will be included, and I will update the related article once the new version for 2018 is released.
© 2012 Glenn Stok