TurboTax Premier (2009)
Monday, February 9, 2009; 12:19 AM
It was a squeaker this year, but Intuit's TurboTax tax-preparation site gets the nod again. Though TaxAct and TaxCut are breathing down its neck, TurboTax Premier did the best job of combining the math with the capabilities to think critically, think ahead, and think strategically.
Take, for example, the fake Medicare and Social Security taxes that I had entered in my test tax-return data: TurboTax realized that the employer had been withholding too much, and then went a step further--it told me what I should actually do about the situation (contact my employer, request a revised W-2, and seek a refund). Other sites either missed the overwithholding altogether or caught it but simply noted that the percentage seemed high.
TurboTax also did the best job of noting changes in the tax code plainly and up front. But what sealed the deal for me was the site's handling of state returns. Most of the other providers PC World reviewed had clearly spent all their time developing the federal side and then throwing together what amounted to glorified data-entry forms for the state side. TurboTax, on the other hand, offers actual guidance and advice at the state level.
TurboTax offers more import capabilities than the other sites, which can be a huge time-saver, particularly at the Form-1099 level (TurboTax can import 1099s from nearly 100 different financial institutions). TurboTax also imports data from Quicken (but only post-2006 PC versions).
Import capability aside, anyone with a lot of Schedule D investment activity should lean toward TurboTax: It was the most sensitive to the intricacies of these transactions without going overboard on the jargon. However, I couldn't see how the actual Schedule D (or any IRS form, for that matter) looked until I had paid.
The ItsDeductible module gave good guidance on what I could deduct for donated items, though its categories and values differed from TaxAct's similar offering (note that according to IRS Publication 526, there are no fixed formulas or methods for finding the fair market value of donated clothing or household items). The sales-tax deduction process was the most intuitive of all the sites, and paranoid types and cheaters will appreciate the Audit Risk Meter, which graphically illustrates how likely you are to be audited.
The thing about TurboTax, though, is that the options and quantity of information offered can be overwhelming and unnecessary for those with simpler returns. Even the help options are a little too numerous: TurboTax presents as the primary source for answers its "Live Community" (basically a Q&A chat board with other users--a potentially dangerous option for tax advice, though TurboTax says its experts monitor the busiest sections for bad information). Other help options include the On Demand Tax Guidance feature, the "TurboTax Help" link at the top of the screen (which links to an online database of articles), the "Ask a Real Live Tax Pro" function (only open during certain hours), an interactive knowledge-base guide called "Ask Tina," and of course the tech support section.
Price is also a growing issue--$49.95 for federal and $34.95 for state. After a grassroots revolt a few months ago that forced Intuit to reverse new printing fees for its desktop products, it's clear that some users think the tax-prep giant has gotten too big for its britches. That said, if you have a relatively elaborate situation or you're a closet tax strategist, TurboTax is about as good as it's going to get.